Amal (the cost accountant) in Dream Company askedthe financial accounting department to provide costinformation for the production department for themonth of May (June information is not yet available).Because the financial accounting department tracksinformation by department, it is able to produce thisinformation. The production department informationfor May is as follows:Unit produced and soldMaterial used in production $240,000Labor (assembly and $180,000supervisors)Facilities costs (rent, utilities, S60,000insurance....etc)Total production cost$480,0006000Amal reviewed this cost information with theproduction manager, Ali Khalid, who has worked asproduction manager at Dream company for severalyears. After careful review, Ali and Amal came up withthe following breakdown of variable and fixed costs forMay:Total Cost Variable Costs Fixed CostsMaterial used in $240,000 $240,000 0productionlabor(assembly and 180,000 120,000supervisors)Facilities costs (rent, 60,000 30,000utilities,insurance....etc)Total$ 40,00030,000$480,000 $390,000 $70,000Required:1- Based on May's information, describe the mix-cost function for Dream Company using theAccounting Analysis approach.2- Assume that Dream Company intends toproduce 6500 and 7,000 units on June and Julyrespectively. What will be the Total productioncosts for June and July?

The total cost can be fixed or variable. Fixed costs are those that do not vary with production…

Required: 1- Based on May's information, describe the mix- cost function for Dream Company using the Accounting Analysis approach. 2- Assume that Dream Company intends to produce 6500 and 7,000 units on June and July respectively. What will be the Total production costs for June and July?

Required: 1- Based on May's information, describe the mix- cost function for Dream Company using the Accounting Analysis approach. 2- Assume that Dream Company intends to produce 6500 and 7,000 units on June and July respectively. What will be the Total production costs for June and July?

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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