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|
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Answer a :
Fixed cost | Variable cost | |
---|---|---|
Production costs | $11,711 | $737 per unit |
Selling and administrative costs | $9,702 | $134 per unit |
Explanation :
Highest activity level = September : 138 units
Lowest activity level = March : 97 units
Variable cost per unit :
($113,417 - $83,200) / (138 units - 97 units)
= $30,217 / 41 units
= $737 per unit
Fixed cost : Substituting variable cost per unit in highest level of activity.
(138 units * $737) + Fixed cost = $113,417
Fixed cost = $113,417 - 101,706
= $11,711
Variable cost per unit :
($28,194 - $22,700) / (138 units - 97 units)
= $5,494 / 41 units
= $134 per unit
Fixed cost : Substituting variable cost per unit in highest level of activity.
(138 units * $134) + Fixed cost = $28,194
Fixed cost = $28,194 - $18,492
= $9,702
Answer (b)
Sales (1,640 units * $900) | $1,476,000 | |
Less: Production costs [(1,640 units * $737) + $11,711] | 1,220,391 | |
Less : Selling and admin. costs [(1,640 units * $134) + $9,702] | 229,462 | 1,449,853 |
Income (loss) | $26,147 |
Blue, Inc., produces amplifiers. Each unit sells for $900. Below is information on production/sales and costs...
Splish, Inc., produces amplifiers. Each unit sells for $1,000. Below is information on production/sales and costs for 2016: Production and Sales in Units Production Costs Selling and Admin. Costs January 104 $88,000 $23,400 February 116 97,700 25,200 March 97 82,800 22,300 April 105 89,900 23,800 May 116 96,900 25,000 June 126 103,100 26,500 July 127 105,300 26,800 August 133 107,600 27,300 September 137 111,800 27,700 October 125 103,400 26,300 November 125 101,700 26,000 December 108 90,200 24,000 Total 1,419 $1,178,400...
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