The following Information relates to a company with a relevant range of activity from 10,000 units to 15,000 units. They are currently producing and selling 12,000 units. The average cost per unit is $7.40 for direct materials; $4.00 for direct labor, and $4.00 for variable manufacturing overhead. The average fixed cost per unit is $14.20 for fixed manufacturing overhead; $2.70 for fixed selling expenses and $1.80 for fixed administrative expenses. Variable selling expenses are $.60 per unit and variable administrative expenses are $.50 per unit. Required: (For questlons a. - d. assume that 14,000 units are produced and sold.) a. Calculate the total amount of varlable cost for the units sold. b. Calculate the varlable cost per unit sold. (Round "Per unit" answer to 2 decimal places.) c. Calculate the total amount of fixed manufacturing costs. d. Calculate the average fixed manufacturing cost per unit produced. (Round "Per unit" answer to 2 decimal places.) e. Calculate the Incremental manufacturing cost the company will Incur If production Increases from 12,000 to 12,001 units. (Round " unit" answer to 2 decimal places.) a Total variable costs for 14,000 units b. Variable cost per unit for 14,000 units Total fixed manufacturing overhead cost for C 14.000 units Average fixed manufacturing cost for 14,000 units d. |Incremental manufacturing cost
The following Information relates to a company with a relevant range of activity from 10,000 units to 15,000 units. They are currently producing and selling 12,000 units. The average cost per unit is $7.40 for direct materials; $4.00 for direct labor, and $4.00 for variable manufacturing overhead. The average fixed cost per unit is $14.20 for fixed manufacturing overhead; $2.70 for fixed selling expenses and $1.80 for fixed administrative expenses. Variable selling expenses are $.60 per unit and variable administrative expenses are $.50 per unit. Required: (For questlons a. - d. assume that 14,000 units are produced and sold.) a. Calculate the total amount of varlable cost for the units sold. b. Calculate the varlable cost per unit sold. (Round "Per unit" answer to 2 decimal places.) c. Calculate the total amount of fixed manufacturing costs. d. Calculate the average fixed manufacturing cost per unit produced. (Round "Per unit" answer to 2 decimal places.) e. Calculate the Incremental manufacturing cost the company will Incur If production Increases from 12,000 to 12,001 units. (Round " unit" answer to 2 decimal places.) a Total variable costs for 14,000 units b. Variable cost per unit for 14,000 units Total fixed manufacturing overhead cost for C 14.000 units Average fixed manufacturing cost for 14,000 units d. |Incremental manufacturing cost
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Question
Transcribed Image Text:The following Informetlon relates to a company with a relevant range of activity from 10,000 units to 15,000 unlts. They are
currently producing and selling 12,000 units.
The average cost per unit is $7.40 for direct materlals; $4.00 for direct labor, and $4.00 for varlable manufacturing overhead.
The average fixed cost per unit is $14.20 for fixed manufacturing overhead; $2.70 for fixed selling expenses and $1.80 for fixed
administrative expenses.
Variable selling expenses are $.60 per unit and varlable administrative expenses are $.50 per unit.
Required: (For questlons a. - d. assume that 14,000 units are produced and sold.)
a. Calculate the total amount of varlable cost for the units sold.
b. Calculate the varlable cost per unit sold. (Round "Per unit" answer to 2 decimal places.)
c. Calculate the total amount of fixed manufacturing costs.
d. Calculate the average fixed manufacturing cost per unit produced. (Round "Per unit" answer to 2 decimal places.)
e. Calculate the Incremental manufacturing cost the company will incur If production Increases from 12,000 to 12,001 units. (Round "Per
unit" answer to 2 decimal places.)
a.
Total variable costs for 14,000 units
b. Variable cost per unit for 14,000 units
Total fixed manufacturing overhead cost for
C.
14,000 units
Average fixed manufacturing cost for 14,000
d.
units
e.
Incremental manufacturing cost
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