Walton Company makes fine jewelry that it sells to department stores throughout the United States. Walton is trying to decide which of the two bracelets to manufacture. Cost data pertaining to the two choices follow. Bracelet A Bracelet B Cost of materials per unit $ 32 $ 45 Cost of labor per unit 48 48 Advertising cost per year 9,800 6,600 Annual depreciation on existing equipment 7,000 5,400 Required Identify the fixed costs and determine the amount of fixed cost for each product. Fixed Costs Bracelet A Bracelet B Total fixed costs b. Identify the variable costs and determine the amount of variable cost per unit for each product. Variable Costs Bracelet A Bracelet B Total variable costs per unit c. Identify the avoidable costs and determine the amount of avoidable cost for each product. Avoidable Costs Bracelet A Bracelet
Walton Company makes fine jewelry that it sells to department stores throughout the United States. Walton is trying to decide which of the two bracelets to manufacture. Cost data pertaining to the two choices follow. Bracelet A Bracelet B Cost of materials per unit $ 32 $ 45 Cost of labor per unit 48 48 Advertising cost per year 9,800 6,600 Annual depreciation on existing equipment 7,000 5,400 Required Identify the fixed costs and determine the amount of fixed cost for each product. Fixed Costs Bracelet A Bracelet B Total fixed costs b. Identify the variable costs and determine the amount of variable cost per unit for each product. Variable Costs Bracelet A Bracelet B Total variable costs per unit c. Identify the avoidable costs and determine the amount of avoidable cost for each product. Avoidable Costs Bracelet A Bracelet
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter11: Differential Analysis And Product Pricing
Section: Chapter Questions
Problem 16E
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Walton Company makes fine jewelry that it sells to department stores throughout the United States. Walton is trying to decide which of the two bracelets to manufacture. Cost data pertaining to the two choices follow.
| Bracelet A | Bracelet B | |||||
| Cost of materials per unit | $ | 32 | $ | 45 | ||
| Cost of labor per unit | 48 | 48 | ||||
| Advertising cost per year | 9,800 | 6,600 | ||||
| Annual |
7,000 | 5,400 | ||||
Required
- Identify the fixed costs and determine the amount of fixed cost for each product.
|
b. Identify the variable costs and determine the amount of variable cost per unit for each product.
|
c. Identify the avoidable costs and determine the amount of avoidable cost for each product.
|
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