Homework Answers
1.
Cost of Goods Sold
Variable cost per unit = ($496128-366336)/(7600-5300) = $56.43 per
unit
Fixed Cost per unit = $496128 - 7600 x 56.43 = $67260
Equation = $67260 + $56.43 per unit
Shipping
Variable cost per unit = ($67000-54400)/(7600-5300) = $5.48 per
unit
Fixed Cost per unit = $67000 - 7600 x 5.48 = $25352
Equation = $25352 + $5.48 per unit
Salaries and Commission
Variable cost per unit = ($176500-139000)/(7600-5300) = $16.30 per
unit
Fixed Cost per unit = $176500 - 7600 x 16.30 = $52620
Equation = $52620 + $16.30 per unit
2.
Fixed Costs per month = $67260+25352+52620+82000+13000+46000 =
$286232
Fixed Costs for year = $286232 x 12 = $3434784
Contribution Margin per unit = $128 - 56.43-5.48-16.3 = $49.79 per
unit
Break Even = Fixed Cost / Contribution Margin per unit
= $3434784/49.79 = 68986 units
Annual profit (74000 units) = 74000 x 49.79 - 3434784 = $249676
3.
New Contribution Margin per unit = $49.79 - 8 = $41.79
Annual Profit = 80600 x 41.79 - 3434784 = ($66510)
Change in profit = Decreased by $316186
4.
Fixed Cost = 3434784+108000 = $3542784
Annual profit = 80600 x 49.79 - 3542784 = $470290
Change in Profit = Increased by $220614
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Andretti Company has a single product called a Dak. The company normally produces and sells 60,000...
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normally produces and sells 60,000 Daks each year at a selling
price of $32 per unit. The company’s unit costs at this level of
activity are given below:
Direct
materials
$
10.00
Direct
labor
4.50
Variable
manufacturing overhead
2.30
Fixed
manufacturing overhead
5.00
($300,000
total)
Variable selling
expenses
1.20
Fixed selling
expenses
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($210,000
total)
Total cost per
unit
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Andretti Company has a single product called a Dak. The company
normally produces and sells 60,000 Daks each year at a selling
price of $32 per unit. The company’s unit costs at this level of
activity are given below:
Direct
materials
$
10.00
Direct
labor
4.50
Variable
manufacturing overhead
2.30
Fixed
manufacturing overhead
5.00
($300,000
total)
Variable selling
expenses
1.20
Fixed selling
expenses
3.50
($210,000
total)
Total cost per
unit
$
26.50
A number of questions relating to the production...
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