Homework Help is Here – Start Your Trial Now!
Business
Accounting
Andretti Company has a single product called Dak. The company normally produces and sells 86,000 Daks each year at a selling price of $58 per unit. The company's unit costs at this level of activity are given below:Direct materials - $7.50 Direct labor - $9.00 ariable manufacturing overhead - $2.50Fixed manufacturing overhead - $6.00 ($516,000 total) Variable selling expenses - $1.70 Fixed selling expenses - $4.00 ($344,000 total) Total cost per unit - $30.70Assume that Andretti Company has sufficient capacity to produce 107,500 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 25% above the present 86,000 units each year if it were willing to increase the fixed selling expenses by $140,000. What is the financial advantage (disadvantage) of investing an additional $140,000 in fixed selling expenses? Would the additional investment be justified? Agnew Corporation uses a standard cost system. The following information was provided for the period that just ended: Actual price per kilogram Actual kilograms of material used $ 1.76 61,500 $ 20.60 8,850 Actual hourly labor rate Actual hours of production Standard price per kilogram $ 1.80 Standard kilograms per completed unit 5 kilograms Standard hourly labor rate $ 20 Standard time per completed unit 3/4 hr. Actual total factory overhead $ 64,500 Fixed factory overhead $ 30,000 Standard fixed factory overhead rate Standard variable factory overhead rate Maximum plant capacity Plant operated during the period Units completed during the period $3 per labor hour $5 per labor hour 10,000 hours 9,000 hours The variable factory overhead controllable variance is: 12,000 a. $10,500 favorable b. $7,500 favorable c. $7,500 unfavorable b. d. $10,500 unfavorable

Andretti Company has a single product called Dak. The company normally produces and sells 86,000 Daks each year at a selling price of $58 per unit. The company's unit costs at this level of activity are given below:Direct materials - $7.50 Direct labor - $9.00 ariable manufacturing overhead - $2.50Fixed manufacturing overhead - $6.00 ($516,000 total) Variable selling expenses - $1.70 Fixed selling expenses - $4.00 ($344,000 total) Total cost per unit - $30.70Assume that Andretti Company has sufficient capacity to produce 107,500 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 25% above the present 86,000 units each year if it were willing to increase the fixed selling expenses by $140,000. What is the financial advantage (disadvantage) of investing an additional $140,000 in fixed selling expenses? Would the additional investment be justified? Agnew Corporation uses a standard cost system. The following information was provided for the period that just ended: Actual price per kilogram Actual kilograms of material used $ 1.76 61,500 $ 20.60 8,850 Actual hourly labor rate Actual hours of production Standard price per kilogram $ 1.80 Standard kilograms per completed unit 5 kilograms Standard hourly labor rate $ 20 Standard time per completed unit 3/4 hr. Actual total factory overhead $ 64,500 Fixed factory overhead $ 30,000 Standard fixed factory overhead rate Standard variable factory overhead rate Maximum plant capacity Plant operated during the period Units completed during the period $3 per labor hour $5 per labor hour 10,000 hours 9,000 hours The variable factory overhead controllable variance is: 12,000 a. $10,500 favorable b. $7,500 favorable c. $7,500 unfavorable b. d. $10,500 unfavorable

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

need proper answer to this all questions

Andretti Company has a single product called Dak. The company normally produces and sells 86,000 Daks each year at a selling price of $58 per unit. The company's unit costs at this level of activity are given below:Direct materials - $7.50 Direct labor - $9.00 ariable manufacturing overhead - $2.50Fixed manufacturing overhead - $6.00 ($516,000 total) Variable selling expenses - $1.70 Fixed selling expenses - $4.00 ($344,000 total) Total cost per unit - $30.70Assume that Andretti Company has sufficient capacity to produce 107,500 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 25% above the present 86,000 units each year if it were willing to increase the fixed selling expenses by $140,000. What is the financial advantage (disadvantage) of investing an additional $140,000 in fixed selling expenses? Would the additional investment be justified? Agnew Corporation uses a standard cost system. The following information was provided for the period that just ended: Actual price per kilogram Actual kilograms of material used $ 1.76 61,500 $ 20.60 8,850 Actual hourly labor rate Actual hours of production Standard price per kilogram $ 1.80 Standard kilograms per completed unit 5 kilograms Standard hourly labor rate $ 20 Standard time per completed unit 3/4 hr. Actual total factory overhead $ 64,500 Fixed factory overhead $ 30,000 Standard fixed factory overhead rate Standard variable factory overhead rate Maximum plant capacity Plant operated during the period Units completed during the period $3 per labor hour $5 per labor hour 10,000 hours 9,000 hours The variable factory overhead controllable variance is: 12,000 a. $10,500 favorable b. $7,500 favorable c. $7,500 unfavorable b. d. $10,500 unfavorable
Transcribed Image Text:Andretti Company has a single product called Dak. The company normally produces and sells 86,000 Daks each year at a selling price of $58 per unit. The company's unit costs at this level of activity are given below:Direct materials - $7.50 Direct labor - $9.00 ariable manufacturing overhead - $2.50Fixed manufacturing overhead - $6.00 ($516,000 total) Variable selling expenses - $1.70 Fixed selling expenses - $4.00 ($344,000 total) Total cost per unit - $30.70Assume that Andretti Company has sufficient capacity to produce 107,500 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 25% above the present 86,000 units each year if it were willing to increase the fixed selling expenses by $140,000. What is the financial advantage (disadvantage) of investing an additional $140,000 in fixed selling expenses? Would the additional investment be justified? Agnew Corporation uses a standard cost system. The following information was provided for the period that just ended: Actual price per kilogram Actual kilograms of material used $ 1.76 61,500 $ 20.60 8,850 Actual hourly labor rate Actual hours of production Standard price per kilogram $ 1.80 Standard kilograms per completed unit 5 kilograms Standard hourly labor rate $ 20 Standard time per completed unit 3/4 hr. Actual total factory overhead $ 64,500 Fixed factory overhead $ 30,000 Standard fixed factory overhead rate Standard variable factory overhead rate Maximum plant capacity Plant operated during the period Units completed during the period $3 per labor hour $5 per labor hour 10,000 hours 9,000 hours The variable factory overhead controllable variance is: 12,000 a. $10,500 favorable b. $7,500 favorable c. $7,500 unfavorable b. d. $10,500 unfavorable
Expert Solution
steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS