Namco Inc. is a large company that segments its business into cost and profit centers. The Cost center for the manufacture of Product M2T incurred the following costs in October: Direct Labor: $25/unit Direct Materials: $80/unit Variable Overhead: $15/unit Traceable Fixed Costs: $62,000 Common Fixed Costs: $100,000 Sales were 2,000 units in October. Each unit sells for $210. The M2T Department is being evaluated on overall profitability. In September, the department margin was $100,000. By how much did the department margin increase or decrease in October? Select one: a. $100,000 decrease b. $18,000 increase c. $82,000 decrease d. $118,000 increase e. $80,000 increase
Namco Inc. is a large company that segments its business into cost and profit centers. The Cost center for the manufacture of Product M2T incurred the following costs in October: Direct Labor: $25/unit Direct Materials: $80/unit Variable Overhead: $15/unit Traceable Fixed Costs: $62,000 Common Fixed Costs: $100,000 Sales were 2,000 units in October. Each unit sells for $210. The M2T Department is being evaluated on overall profitability. In September, the department margin was $100,000. By how much did the department margin increase or decrease in October? Select one: a. $100,000 decrease b. $18,000 increase c. $82,000 decrease d. $118,000 increase e. $80,000 increase
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Namco Inc. is a large company that segments its business into cost and profit centers. The Cost center for the manufacture of Product M2T incurred the following costs in October:
Direct Labor: $25/unit
Direct Materials: $80/unit
Variable
Traceable Fixed Costs: $62,000
Common Fixed Costs: $100,000
Sales were 2,000 units in October. Each unit sells for $210. The M2T Department is being evaluated on overall profitability. In September, the department margin was $100,000.
By how much did the department margin increase or decrease in October?
Select one:
a. $100,000 decrease
b. $18,000 increase
c. $82,000 decrease
d. $118,000 increase
e. $80,000 increase
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