Determine the cost of the December 31 finished-goods inventory. 2. Compute Mason’s net income for the current year ended December 31. 3. If next year’s production decreases to 23,000 units and general cost behavior patterns do not change, what is the likely effect on a. The direct-labor cost of $36 per unit? No change Increase Decrease b. The fixed manufacturing overhead cost of $600,000? No change Increase Decrease
Determine the cost of the December 31 finished-goods inventory. 2. Compute Mason’s net income for the current year ended December 31. 3. If next year’s production decreases to 23,000 units and general cost behavior patterns do not change, what is the likely effect on a. The direct-labor cost of $36 per unit? No change Increase Decrease b. The fixed manufacturing overhead cost of $600,000? No change Increase Decrease
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
1. Determine the cost of the December 31 finished-goods inventory.
2. Compute Mason’s net income for the current year ended December 31.
3. If next year’s production decreases to 23,000 units and general cost behavior patterns do not change, what is the likely effect on
a. The direct-labor cost of $36 per unit?
-
No change
-
Increase
-
Decrease
b. The fixed
-
No change
-
Increase
-
Decrease
c. The fixed selling and administrative cost of $860,000?
-
No change
-
Increase
-
Decrease
d. The average unit cost of production?
-
No change
-
Increase
-
Decrease
![Required information
[The following information applies to the questions displayed below.]
Mason Corporation began operations at the beginning of the current year. One of the company's products, a refrigeration
element, sells for $195 per unit. Information related to the current year's activities follows.
Variable costs per unit:
Direct material
$
15
Direct labor
36
Manufacturing overhead
Annual fixed costs:
46
Manufacturing overhead
Selling and administrative
Production and sales activity:
Production (units)
Sales (units)
$600,000
860,000
24,000
20,000
Mason carries its finished-goods inventory at the average unit cost of production and is subject to a 30 percent income tax
rate. There was no work in process at year-end.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4b99ac81-bb2a-468c-9eb7-1d354d09e9d5%2F198f1b97-b15a-4d8a-b876-b7d4855a1e7b%2Fumqdvi9_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Mason Corporation began operations at the beginning of the current year. One of the company's products, a refrigeration
element, sells for $195 per unit. Information related to the current year's activities follows.
Variable costs per unit:
Direct material
$
15
Direct labor
36
Manufacturing overhead
Annual fixed costs:
46
Manufacturing overhead
Selling and administrative
Production and sales activity:
Production (units)
Sales (units)
$600,000
860,000
24,000
20,000
Mason carries its finished-goods inventory at the average unit cost of production and is subject to a 30 percent income tax
rate. There was no work in process at year-end.
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