Accounting Chapter 1 Menk Corporation Has Provided The Following

202

275) Saxbury Corporation’s relevant range of activity is 3,000 units to 7,000 units. When it

produces and sells 5,000 units, its average costs per unit are as follows:

Average Cost

per Unit

Direct materials

$5.30

Direct labor

$3.65

Variable manufacturing overhead

$1.50

Fixed manufacturing overhead

$3.90

Fixed selling expense

$0.75

Fixed administrative expense

$0.60

Sales commissions

$0.50

Variable administrative expense

$0.50

Required:

a. For financial reporting purposes, what is the total amount of product costs incurred to make

5,000 units?

b. For financial reporting purposes, what is the total amount of period costs incurred to sell 5,000

units?

c. If 6,000 units are sold, what is the variable cost per unit sold?

d. If 6,000 units are sold, what is the total amount of variable costs related to the units sold?

e. If 6,000 units are produced, what is the average fixed manufacturing cost per unit produced?

f. If 6,000 units are produced, what is the total amount of fixed manufacturing cost incurred?

g. If 6,000 units are produced, what is the total amount of manufacturing overhead cost incurred?

What is this total amount expressed on a per unit basis?

h. If the selling price is $22.90 per unit, what is the contribution margin per unit sold?

i. If 4,000 units are produced, what is the total amount of direct manufacturing cost incurred?

j. If 4,000 units are produced, what is the total amount of indirect manufacturing cost incurred?

k. What incremental manufacturing cost will the company incur if it increases production from

5,000 to 5,001 units?

204

205

206

276) Myklebust Corporation’s relevant range of activity is 4,000 units to 8,000 units. When it

produces and sells 6,000 units, its average costs per unit are as follows:

Average Cost

per Unit

Direct materials

$6.40

Direct labor

$3.80

Variable manufacturing overhead

$1.60

Fixed manufacturing overhead

$3.00

Fixed selling expense

$0.75

Fixed administrative expense

$0.60

Sales commissions

$1.50

Variable administrative expense

$0.45

Required:

a. For financial reporting purposes, what is the total amount of product costs incurred to make

6,000 units?

b. For financial reporting purposes, what is the total amount of period costs incurred to sell 6,000

units?

c. If the selling price is $20.20 per unit, what is the contribution margin per unit sold?

d. If 7,000 units are produced, what is the total amount of direct manufacturing cost incurred?

e. If 7,000 units are produced, what is the total amount of indirect manufacturing cost incurred?

f. What incremental manufacturing cost will the company incur if it increases production from

6,000 to 6,001 units?

209

277) Learned Corporation has provided the following information:

Cost per Unit

Cost per Period

Direct materials

$5.20

Direct labor

$3.85

Variable manufacturing overhead

$1.35

Fixed manufacturing overhead

$27,000

Sales commissions

$0.50

Variable administrative expense

$0.40

Fixed selling and administrative expense

$9,000

Required:

a. For financial reporting purposes, what is the total amount of product costs incurred to make

6,000 units?

b. For financial reporting purposes, what is the total amount of period costs incurred to sell 6,000

units?

c. If the selling price is $22.40 per unit, what is the contribution margin per unit sold?

d. If 7,000 units are produced, what is the total amount of direct manufacturing cost incurred?

e. If 7,000 units are produced, what is the total amount of indirect manufacturing costs incurred?

212

278) Arman Corporation’s relevant range of activity is 3,000 units to 7,000 units. When it produces

and sells 5,000 units, its average costs per unit are as follows:

Average Cost

per Unit

Direct materials

$6.10

Direct labor

$2.90

Variable manufacturing overhead

$1.25

Fixed manufacturing overhead

$3.00

Fixed selling expense

$1.05

Fixed administrative expense

$0.60

Sales commissions

$1.50

Variable administrative expense

$0.55

Required:

a. If 6,000 units are produced, what is the total amount of fixed manufacturing cost incurred?

b. If 6,000 units are produced, what is the total amount of manufacturing overhead cost incurred?

What is this total amount expressed on a per unit basis?

c. If 4,000 units are produced, what is the total amount of direct manufacturing cost incurred?

d. If 4,000 units are produced, what is the total amount of indirect manufacturing cost incurred?

279) Skolnick Corporation has provided the following information:

Cost per Unit

Cost per Period

Direct materials

$5.70

Direct labor

$3.60

Variable manufacturing overhead

$1.50

Fixed manufacturing overhead

$121,500

Sales commissions

$1.00

Variable administrative expense

$0.45

Fixed selling and administrative expense

$36,450

Required:

a. If 8,000 units are produced, what is the total amount of direct manufacturing cost incurred?

b. If 8,000 units are produced, what is the total amount of indirect manufacturing costs incurred?

Direct materials

Direct labor

3.60

Direct manufacturing cost per unit (a)

Number of units produced (b)

Total direct manufacturing cost (a) × (b)

($1.50 per unit x 8,000 units)

Total fixed manufacturing overhead cost

Total indirect manufacturing cost

215

280) Karpowicz Corporation’s relevant range of activity is 7,000 units to 11,000 units. When it

produces and sells 9,000 units, its average costs per unit are as follows:

Average Cost

per Unit

Direct materials

$6.25

Direct labor

$4.15

Variable manufacturing overhead

$1.60

Fixed manufacturing overhead

$12.60

Fixed selling expense

$3.15

Fixed administrative expense

$1.80

Sales commissions

$1.50

Variable administrative expense

$0.45

Required:

a. If the selling price is $21.40 per unit, what is the contribution margin per unit sold?

b. If 8,000 units are produced, what is the total amount of direct manufacturing cost incurred?

c. If 8,000 units are produced, what is the total amount of indirect manufacturing cost incurred?

d. What incremental manufacturing cost will the company incur if it increases production from

9,000 to 9,001 units?

217

281) Parlavecchio Corporation’s relevant range of activity is 2,000 units to 6,000 units. When it

produces and sells 4,000 units, its average costs per unit are as follows:

Average Cost

per Unit

Direct materials

$5.20

Direct labor

$3.40

Variable manufacturing overhead

$1.35

Fixed manufacturing overhead

$3.00

Fixed selling expense

$0.70

Fixed administrative expense

$0.40

Sales commissions

$1.50

Variable administrative expense

$0.45

Required:

a. For financial reporting purposes, what is the total amount of product costs incurred to make

4,000 units?

b. For financial reporting purposes, what is the total amount of period costs incurred to sell 4,000

units?

c. If 5,000 units are sold, what is the variable cost per unit sold?

d. If 5,000 units are sold, what is the total amount of variable costs related to the units sold?

e. If 5,000 units are produced, what is the average fixed manufacturing cost per unit produced?

f. If 5,000 units are produced, what is the total amount of fixed manufacturing cost incurred?

g. If 5,000 units are produced, what is the total amount of manufacturing overhead cost incurred?

What is this total amount expressed on a per unit basis?

f.

220

282) Menk Corporation has provided the following information:

Cost per Unit

Cost per Period

Direct materials

$6.25

Direct labor

$3.25

Variable manufacturing overhead

$1.45

Fixed manufacturing overhead

$18,000

Sales commissions

$0.50

Variable administrative expense

$0.40

Fixed selling and administrative expense

$9,000

Required:

a. If 5,000 units are sold, what is the variable cost per unit sold?

b. If 5,000 units are sold, what is the total amount of variable costs related to the units sold?

c. If 5,000 units are produced, what is the total amount of manufacturing overhead cost incurred?