Estrada Corporation produced 205,000 watches that it sold for $16 each. The company determined that fixed manufacturing cost perunit was $8 per watch. The company reported a $410,000 gross margin on its financial statements.RequiredDetermine the variable cost per unit, the total variable product cost, and the total contribution margin.Variable cost per unitTotal variable product costTotal contribution margin

The gross margin is calculated as the difference between the sales and cost of goods sold. The…

Answered: Estrada Corporation produced 205,000…

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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ABC Inc. manufactures a single product. Assume the following data for 2015: VC Per Unit: S&A $14; Production, $38. Total FC: Production, $140,000; S&A, $ 84,000. During the year, 7,000 units were produced and 6,800 units were sold. Under variable costing, the cost of one unit of product would be: O a. $38 O b. $70 O c. $52 O d. $58
The total prime cost of a product was OMR3,900. The variable manufacturing overhead is calculated based on the number of direct labor hours. The variable manufacturing overhead cost per hour is five times the direct labor cost per hour. The fixed manufacturing overhead was OMR2,500. Assuming that direct labor hours were 400 and that the direct labor cost was 30% of direct materials cost, how much is the total manufacturing cost? Select one: O a. OMR25,900 O b. OMR6,400 O c. OMR25,000 O d. OMR23,400 O e. OMR10,900
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Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and its standard cost card per unit is as follows: Direct material: 5 pounds at $8.00 per pound Direct labor: 2 hours at $14 per hour Variable overhead: 2 hours at $5 per hour Total standard variable cost per unit The company also established the following cost formulas for its selling expenses: Variable Cost per Unit Sold Advertising Sales salaries and commissions Shipping expenses $ 40.00 28.00 10.00 $78.00 Fixed Cost per Month $ 200,000 $ 100,000 $12.00 $ 3.00 The planning budget for March was based on producing and selling 25,000 units. However, during March the company actually produced and sold 30,000 units and incurred the following costs: a. Purchased 160,000 pounds of raw materials at a cost of $7.50 per pound. All of this material was used in production. b. Direct-laborers worked 55,000 hours at a rate of $15.00 per hour. Materials quantity…

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