Give general account answer Alvin Inc. planned and actually manufactured 200,000 units ofits single product in 2008, its first year of operations. Variablemanufacturing costs were $30 per unit of product. Planned andactual fixed manufacturing costs were $600,000, andmarketing and administrative costs totaled $400,000 in 2004.Alvin sold 120,000 units of product in 2008 at a selling price of$40 per unit. What is Alvin's 2008 operating income usingvariable costing?a. $800,000b. $600,000c. $440,000d. $200,000

Step 1: Key ConceptsUnder variable costing, only variable manufacturing costs are included in the…

Answered: Alvin Inc. planned and actually…

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter3: Cost Behavior And Cost Forecasting

Section: Chapter Questions

Problem 16DQ

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The sales price per unit is 13 for the Voyageur Companys only product. The variable cost per unit is 5. In 2016, the company sold 80,000 units, which was 10,000 units above the break-even point. Compute the following: 1. Total fixed expenses. (Hint: First compute the contribution margin per unit.) 2. Total variable expense at the break-even volume.
Suppose that a company is spending 60,000 per year for inspecting, 30,000 for purchasing, and 40,000 for reworking products. A good estimate of nonvalue-added costs would be a. 70,000. b. 130,000. c. 40,000. d. 90,000. e. 100,000.
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CVP computations. Garrett Manufacturing sold 410,000 units of its product for $68 per unit in 2017.Variable cost per unit is $60, and total fixed costs are $1,640,000.1. Calculate (a) contribution margin and (b) operating income.2. Garrett’s current manufacturing process is labor intensive. Kate Schoenen, Garrett’s production manager,has proposed investing in state-of-the-art manufacturing equipment, which will increase the annualfixed costs to $5,330,000. The variable costs are expected to decrease to $54 per unit. Garrett expectsto maintain the same sales volume and selling price next year. How would acceptance of Schoenen’sproposal affect your answers to (a) and (b) in requirement 1?3. Should Garrett accept Schoenen’s proposal? Explain.
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