A factory can product 240,000 units per year at its 100% capacity. The estimated production costs are given below: Direct material $400 per unit Direct labor $200 per unit Indirect expenses: Fixed $4,000,000 per year Variable $100 per unit Semi-variable $100,000 per year up to 60% capacity and $20,000 for every 20% increase in the capacity or part thereof. If the production program of the factory is as indicated below and the required profit is $2,000,000 for the year, determine the average selling price. First three months of the year - 60% of capacity Remaining nine months of the year - 80% of capacity

A factory can product 240,000 units per year at its 100% capacity. The estimated production costs are given below: Direct material $400 per unit Direct labor $200 per unit Indirect expenses: Fixed $4,000,000 per year Variable $100 per unit Semi-variable $100,000 per year up to 60% capacity and $20,000 for every 20% increase in the capacity or part thereof. If the production program of the factory is as indicated below and the required profit is $2,000,000 for the year, determine the average selling price. First three months of the year - 60% of capacity Remaining nine months of the year - 80% of capacity

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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