Cost of the December 31 finished goods inventory Net income for the current year Dec 31 If next year production decrease to 22,500 units and general cost behavior patterns do not change what is the likely effect on The direct labor cost of 74 per units? why? The fixed manufacturing overhead of 1,200,000? why? The fixed selling and administrative cost of1,7200,000? why? Per unit cost production why?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Q. HASF Corporation began operations at the beginning of the current year. one of the year company product a compressor sells for 370 per unit’s information related to the current year activities follows

Variable cost per unit

Direct material                                                40

Direct labor                                                     74

Manufacturing overhead                                 96

Annual fixed cost

Manufacturing cost                                         1,200,000

Selling and administrative                              1,720,000

Sales and production

Sales in units                                                   20,000

Production                                                      24,000

Required -

Cost of the December 31 finished goods inventory

Net income for the current year Dec 31

If next year production decrease to 22,500 units and general cost behavior patterns do not change what is the likely effect on

  • The direct labor cost of 74 per units? why?
  • The fixed manufacturing overhead of 1,200,000? why?
  • The fixed selling and administrative cost of1,7200,000? why?

Per unit cost production why?

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