0 39

Question

Question

Answer 1

Answer #1

Given:

Average cost per unit

Direct materials: $8

Direct labor: $5

Variable manufacturing overhead: $2.5

Fixed manufacturing overhead: $4

Fixed selling expense: $4.50

Fixed administrative expense: $3.50

Sales commissions: $2

Variable administrative expense: $1.50

1. Variable cost per unit if 20,000 units produced and sold = ${(8+5+2.5+1.5) x 20,000 units}/(20,000+23,000) = $17 x 20,000/43,000 = $ 7.91

2. Variable cost per unit if 23,000 units produced and sold = ${(8+5+2.5+1.5) x 23,000 units}/(20,000+23,000) = $17 x 23,000/43,000 = $ 9.09

3. Total Variable Cost if 20,000 units produced and sold = $7.91 x 20000 units = $158,200

4. Total Variable Cost if 23,000 units produced and sold = $9.09 x 23000 units = $209,070

Answer 2

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