91) Radke, Inc. gathered the following information regarding its one and only product:

Direct materials used$14,000

Direct labour24,000

Variable factory overhead28,000

Fixed factory overhead18,000

Variable selling and administrative expenses30,000

Fixed selling and administrative expenses16,000

Units produced and sold5,000

Selling price per unit$30

Required:

a.Compute the unit manufacturing cost of the product under the   absorption approach.

b.Compute the unit manufacturing cost of the product under the contribution approach.

c.Compute the effect on net income of accepting a special order for 1,000 units at $20 per unit assuming excess capacity.

92) A method of determining the cost of a product or service based on the price that customers are willing to pay.

93) Irwin Company produces one and only one product called Faxman.  The following information is available:

Direct materials used$360,000

Direct labour480,000

Variable factory overhead330,000

Fixed factory overhead470,000

Variable selling and administrative expenses220,000

Fixed selling and administrative expenses380,000

Units produced and sold10,000

Selling price per unit$240

Required:

a.Compute the unit manufacturing cost of a Faxman under the absorption approach.

b.Compute the unit manufacturing cost of a Faxman under the contribution approach.

c.Compute the effect on net income of accepting a special order for 1,000 at $160 per unit.

94) Moreland, Inc. has been producing and selling 50,000 units per year.  They have excess capacity.  The following budget was prepared for next year:

Selling price per unit$50

Variable costs per unit:Manufacturing$32

Selling and administrative10

Fixed costs in total:Manufacturing$160,000

Selling and administrative70,000

Required:

a.Compute the contribution approach cost of manufacturing one unit.

b.Compute the absorption approach cost of manufacturing one unit.

c.



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *