Question

At a volume of 8,000 units, Pearson Company incurred $32,000 in factory overhead costs, including $12,000 in fixed costs. If volume increases to 9,000 units and both 8,000 units and 9,000 units are within the relevant range, then:
What is the factory overhead costs at 9000 units? 34500 or 32500 or 30000.

At a volume of 8,000 units, Pearson Company incurred $32,000 in factory overhead costs, including $12,000 in fixed costs. If volume increases to 9,000 units and both 8,000 units and 9,000 units are within the relevant range, then:
What is the variable cost per unit? 2.0 or 2.5 or None of the Above.

At a volume of 20,000 units, Reynolds Company incurred $175,000 in factory overhead costs, including $12,000 in fixed costs. If volume increases to 22,000 units and both 20,000 units and 22000 units are within the relevant range, then:
What is the variable cost per unit? 8.0 or 8.15 or None of the Above.

Answer 1

answer: 34500 explanation total factory overhead 32000 less fixed cost incurred 12000 variable cost 20000 variable cost per unit-20000/8000 units 2.50 if volume increased to 9000 units total cost = fixed cost +(9000*2.50) 34500 since the fixed cost is constant within the relavent range of volume answer: $2.5 answer : 2 explanation at 8000 units factory over head less fixed cost variable cost variable cost per unit =20000/8000 units since the variable cost per unit is constant with the volume changes 32000 12000 20000 2.50 answer: 8.15 explanation at volume 20000 units factory overhead cost 175000 less fixed cost incurred 12000 variable cost 163000 variable cost per unit =175000/8000 8.15 since the variable cost per unit do not change along with the output or volume changes