Deluxe Homes is a residential Home Builder. Based on their current production of 300 homes per year, they currently make a profit of $20,000 per unit, based on the following costs per unit: Direct labor $ 20,000 Direct materials 200,000 Variable overhead 30,000 Fixed overhead 40,000 Variable selling costs 10,000 Fixed selling costs 10,000 Total costs per unit $310,000 Required Each of these are separate situations: A. Prepare an income statement based on the information provided. B. What is the profit and cost per unit if production is increased to 400 homes per year, and there is an increase of $1.50 million in total fixed overhead costs
Deluxe Homes is a residential Home Builder. Based on their current production of 300 homes per year, they currently make a profit of $20,000 per unit, based on the following costs per unit: Direct labor $ 20,000 Direct materials 200,000 Variable overhead 30,000 Fixed overhead 40,000 Variable selling costs 10,000 Fixed selling costs 10,000 Total costs per unit $310,000 Required Each of these are separate situations: A. Prepare an income statement based on the information provided. B. What is the profit and cost per unit if production is increased to 400 homes per year, and there is an increase of $1.50 million in total fixed overhead costs
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Deluxe Homes is a residential Home Builder. Based on their current production of 300 homes per year, they currently make a profit of $20,000 per unit, based on the following costs per unit:
Direct labor $ 20,000
Direct materials 200,000
Variable overhead 30,000
Fixed overhead 40,000
Variable selling costs 10,000
Fixed selling costs 10,000
Total costs per unit $310,000
Required Each of these are separate situations:
A. Prepare an income statement based on the information provided.
B. What is the profit and cost per unit if production is increased to 400 homes per year, and there is an increase of $1.50 million in total fixed overhead costs?
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