Greek Manufacturing Company produces and sells a line of product that are sold usually all year round. The company has a maximum production capacity of 100,000 units per year. Operating at normal capacity, the business earned Operating Income of $600,000 in 2020. The following cost data has been prepared for the year ended December 31, 2020. Selling price per unit... $50.00 Production Costs: Direct Materials $10.00 Direct Labour $8.00 Variable Manufacturing Overhead $7.00 Fixed Manufacturing Overhead.. $450,000 Fixed Selling & Administrative Expenses. $300,000 Variable selling expense per unit $10.00 Required: a) Using the equation method, calculate the normal capacity of the business. b) Calculate: i) the variable production cost per unit ii) the total production cost per unit iii) The total variable cost per unit iv) Total Fixed Costs c) Calculate Greek's break-even point in units and in sales dollars.
Greek Manufacturing Company produces and sells a line of product that are sold usually all year round. The company has a maximum production capacity of 100,000 units per year. Operating at normal capacity, the business earned Operating Income of $600,000 in 2020. The following cost data has been prepared for the year ended December 31, 2020. Selling price per unit... $50.00 Production Costs: Direct Materials $10.00 Direct Labour $8.00 Variable Manufacturing Overhead $7.00 Fixed Manufacturing Overhead.. $450,000 Fixed Selling & Administrative Expenses. $300,000 Variable selling expense per unit $10.00 Required: a) Using the equation method, calculate the normal capacity of the business. b) Calculate: i) the variable production cost per unit ii) the total production cost per unit iii) The total variable cost per unit iv) Total Fixed Costs c) Calculate Greek's break-even point in units and in sales dollars.
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter3: Cost Behavior And Cost Forecasting
Section: Chapter Questions
Problem 54E: Income Statements under Absorption and Variable Costing In the coming year, Kalling Company expects...
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