XYZ Corporation's relevant range of activity is 3,000 units to 7,000 units. When it produces and sells 5,000 units, its average costs per unit are as follows: Average Cost per Unit Direct materials.............................. $5.30 Direct labor.................................... $3.65 Variable manufacturing overhead... $1.50 Fixed manufacturing overhead........ $3.90 Fixed selling expense..................... $0.75 Fixed administrative expense.......... $0.60 Sales commissions........................ $0.50 Variable administrative expense...... $0.50 Required: For financial reporting purposes, what is the total amount of product costs incurred to make 5,000 units? For financial reporting purposes, what is the total amount of period costs incurred to sell 5,000 units? If 6,000 units are sold, what is the variable cost per unit sold?
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.
XYZ Corporation's relevant range of activity is 3,000 units to 7,000 units. When it produces and sells 5,000 units, its average costs per unit are as follows:
|
|
|
Average Cost per Unit |
|
|
Direct materials.............................. |
$5.30 |
|
|
Direct labor.................................... |
$3.65 |
|
|
Variable manufacturing overhead... |
$1.50 |
|
|
Fixed manufacturing overhead........ |
$3.90 |
|
|
Fixed selling expense..................... |
$0.75 |
|
|
Fixed administrative expense.......... |
$0.60 |
|
|
Sales commissions........................ |
$0.50 |
|
|
Variable administrative expense...... |
$0.50 |
Required:
- For financial reporting purposes, what is the total amount of product costs incurred to make 5,000 units?
- For financial reporting purposes, what is the total amount of period costs incurred to sell 5,000 units?
- If 6,000 units are sold, what is the variable cost per unit sold?
- If 6,000 units are sold, what is the total amount of variable costs related to the units sold?
- If 6,000 units are produced, what is the average fixed
manufacturing cost per unit produced? - If 6,000 units are produced, what is the total amount of fixed manufacturing cost incurred?
- If 6,000 units are produced, what is the total amount of manufacturing overhead cost incurred? What is this total amount expressed on a per-unit basis?
- If the selling price is $22.90 per unit, what is the contribution margin per unit sold?
- If 4,000 units are produced, what is the total amount of direct manufacturing cost incurred?
- If 4,000 units are produced, what is the total amount of indirect manufacturing cost incurred?
- What incremental manufacturing cost will the company incur if it increases production from 5,000 to 5,001 units?
Please show me the explanation of the computational answer.
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 3 images
