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Balerio Corporation's relevant range of activity is 12,000 units to 15,000 units it produces and sells 14,000 units, its average costs per unit are as follows:

Balerio Corporation's relevant range of activity is 12,000 units to 15,000 units it produces and sells 14,000 units, its average costs per unit are as follows:

FINANCIAL ACCOUNTING
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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Balerio Corporation's relevant range of activity is 12,000 units to 15,000 units. When it produces and sells 14,000 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 $ 6.80 $ 3.60 $ 1.90 $ 13.80 $ 3.00 $ 1.70 $0.80 $ 0.70 Required: a. For financial reporting purposes, what is the total amount of product costs incurred to make 14,000 units? Note: Do not round intermediate calculations. b. If 13,000 units are sold, what is the variable cost per unit sold? Note: 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? Note: Do not round intermediate calculations. Round "Per unit" answer to 2 decimal places. d. If the selling price is $19.60 per unit, what is the contribution margin per unit sold? Note: Round "Per unit" answer to 2 decimal places. e. What incremental manufacturing cost will the company incur if it increases production from 14,000 to 14,001 units? Note: 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
Transcribed Image Text:Balerio Corporation's relevant range of activity is 12,000 units to 15,000 units. When it produces and sells 14,000 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 $ 6.80 $ 3.60 $ 1.90 $ 13.80 $ 3.00 $ 1.70 $0.80 $ 0.70 Required: a. For financial reporting purposes, what is the total amount of product costs incurred to make 14,000 units? Note: Do not round intermediate calculations. b. If 13,000 units are sold, what is the variable cost per unit sold? Note: 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? Note: Do not round intermediate calculations. Round "Per unit" answer to 2 decimal places. d. If the selling price is $19.60 per unit, what is the contribution margin per unit sold? Note: Round "Per unit" answer to 2 decimal places. e. What incremental manufacturing cost will the company incur if it increases production from 14,000 to 14,001 units? Note: 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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