Balerio Corporation's relevant range of activity is 10,000 units to 14,000 units. When it produces and sells 12,000 units, its average costs per unit are as follows: Direct materials. Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense Average Cost per Unit Required: a. For financial reporting purposes, what is the total amount of product costs incurred to make 12,000 units? (Do not round intermediate calculations.) a. Total product cost b. Variable cost per unit sold $6.00 $3.40 $ 1.70 $13.60 $2.40 $ 2.00 $0.50 $0.40 b. If 13,000 units are sold, what is the variable cost per unit sold? (Round "Per unit" answer to 2 decimal places.) c. If 13,000 units are sold, what is the total amount of variable costs related to the units sold? (Do not round intermediate calculations. Round "Per unit" answer to 2 decimal places.) d. If the selling price is $18.40 per unit, what is the contribution margin per unit sold? (Round "Per unit" answer to 2 decimal places.) e. What incremental manufacturing cost will the company incur if it increases production from 12,000 to 12,001 units? (Round "Per unit" answer to 2 decimal places.) c. Total variable costs d. Contribution margin per unit e. Incremental manufacturing cost
Balerio Corporation's relevant range of activity is 10,000 units to 14,000 units. When it produces and sells 12,000 units, its average costs per unit are as follows: Direct materials. Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense Average Cost per Unit Required: a. For financial reporting purposes, what is the total amount of product costs incurred to make 12,000 units? (Do not round intermediate calculations.) a. Total product cost b. Variable cost per unit sold $6.00 $3.40 $ 1.70 $13.60 $2.40 $ 2.00 $0.50 $0.40 b. If 13,000 units are sold, what is the variable cost per unit sold? (Round "Per unit" answer to 2 decimal places.) c. If 13,000 units are sold, what is the total amount of variable costs related to the units sold? (Do not round intermediate calculations. Round "Per unit" answer to 2 decimal places.) d. If the selling price is $18.40 per unit, what is the contribution margin per unit sold? (Round "Per unit" answer to 2 decimal places.) e. What incremental manufacturing cost will the company incur if it increases production from 12,000 to 12,001 units? (Round "Per unit" answer to 2 decimal places.) c. Total variable costs d. Contribution margin per unit e. Incremental manufacturing cost
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Balerio Corporation's relevant range of activity is 10,000 units to 14,000 units. When it produces and sells 12,000 units, its average
costs per unit are as follows:
Direct materials
Direct labor
Variable manufacturing overhead
Pixed manufacturing overhead
Fixed, selling expense
Fixed administrative expense
Sales commissions
Variable administrative expense
Average Cost per
Unit
$6.80
$3.40
$ 1.70
$13.60
$2.40
$ 2.00
$ 0.50
$0.40
Required:
a. For financial reporting purposes, what is the total amount of product costs incurred to make 12,000 units? (Do not round
intermediate calculations.)
b. if 13,000 units are sold, what is the variable cost per unit sold? (Round "Per unit" answer to 2 decimal places.)
c. If 13,000 units are sold, what is the total amount of variable costs related to the units sold? (Do not round intermediate calculations.
Round "Per unit" answer to 2 decimal places.)
d. If the selling price is $18.40 per unit, what is the contribution margin per unit sold? (Round "Per unit" answer to 2 decimal places.)
e. What incremental manufacturing cost will the company incur if it increases production from 12,000 to 12,001 units? (Round "Per unit"
answer to 2 decimal places.)
a. Total product cost
b. Variable cost per unit sold
c. Total variable costs
d. Contribution margin per unit
e. Incremental manufacturing cost
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