Elmo Security Consultants (ESC) offer a standardized review of data security for small business owners. The following data apply to the provision of these reviews: Sales price per unit (1 unit = 1 review with recommendations) Fixed costs (per month): Selling and administration Production overhead (e.g., rent of facilities) Variable costs (per review): Labor for oversight and feedback. Outsourced security analysis Materials used in reviews Review overhead Selling and administration (e.g., scheduling and billing) Number of reviews per month. a. Variable review (production) cost per unit b. Variable total cost per unit c. Full cost per unit Required: Calculate the amount for each of the following (one unit = one review) if the number of reviews is 2,500 per month. Also calculate if the number of reviews decreases to 2,000 per month. Note: Do not round intermediate calculations. Round your final answers to the nearest whole dollar. d. Full absorption cost per unit e. Prime cost per unit f. Conversion cost per unit g. Contribution margin per unit h. Gross margin per unit 2,500 Reviews $ $ $ $ $ $ $ $ 2,000 Reviews 800 $ 800 $ 57 $ $ 857 440 $ 360 $ 600 $ 960 $ 800 800 72 871 440 360 600 960 $ 1,400 59,000 83,500 A 340 130 100 110 120 2,500 reviews
Elmo Security Consultants (ESC) offer a standardized review of data security for small business owners. The following data apply to the provision of these reviews: Sales price per unit (1 unit = 1 review with recommendations) Fixed costs (per month): Selling and administration Production overhead (e.g., rent of facilities) Variable costs (per review): Labor for oversight and feedback. Outsourced security analysis Materials used in reviews Review overhead Selling and administration (e.g., scheduling and billing) Number of reviews per month. a. Variable review (production) cost per unit b. Variable total cost per unit c. Full cost per unit Required: Calculate the amount for each of the following (one unit = one review) if the number of reviews is 2,500 per month. Also calculate if the number of reviews decreases to 2,000 per month. Note: Do not round intermediate calculations. Round your final answers to the nearest whole dollar. d. Full absorption cost per unit e. Prime cost per unit f. Conversion cost per unit g. Contribution margin per unit h. Gross margin per unit 2,500 Reviews $ $ $ $ $ $ $ $ 2,000 Reviews 800 $ 800 $ 57 $ $ 857 440 $ 360 $ 600 $ 960 $ 800 800 72 871 440 360 600 960 $ 1,400 59,000 83,500 A 340 130 100 110 120 2,500 reviews
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Elmo Security Consultants (ESC) offer a standardized review of data security for small business owners. The following data apply to the
provision of these reviews:
Sales price per unit (1 unit = 1 review with recommendations)
Fixed costs (per month):
Selling and administration
Production overhead (e.g., rent of facilities)
Variable costs (per review):
Labor for oversight and feedback.
Outsourced security analysis
Materials used in reviews
Review overhead
Selling and administration (e.g., scheduling and billing)
Number of reviews per month
a. Variable review (production) cost per unit
b. Variable total cost per unit
c. Full cost per unit
d. Full absorption cost per unit
e. Prime cost per unit
Required:
Calculate the amount for each of the following (one unit = one review) if the number of reviews is 2,500 per month. Also calculate if the
number of reviews decreases to 2,000 per month.
Note: Do not round intermediate calculations. Round your final answers to the nearest whole dollar.
f. Conversion cost per unit
g. Contribution margin per unit
h. Gross margin per unit
2,500
Reviews
$
$
$
S
$
$
$
$
2,000
Reviews
800 $
800 $
57 $
857 $
440 $
360 $
600 $
960 $
$ 1,400
59,000
83,500
800
800
72
871
440
360
600
960
340
130
100
110
120
2,500 reviews
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