The following are Silver Corporation's unit costs of making andselling an item at a volume of 8,000 units per month (whichrepresents the company's capacity):
Manufacturing: Direct materials $ 4 Direct labor $ 5 Variable overhead $ 2 Fixed overhead $ 8 Selling and administrative: Variable $ 1 Fixed $ 6
Present sales amount to 7,000 units per month. An order has beenreceived from a customer in a foreign market for 1,000 units. Theorder would not affect regular sales. Total fixed costs, bothmanufacturing and selling and administrative, would not be affectedby this order. The variable selling and administrative costs wouldhave to be incurred for this special order as well as all othersales. Assume that direct labor is a variable cost.
Assume the company has 50 units left over from last year whichhave small defects and which will have to be sold at a reducedprice for scrap. The sale of these defective units will have noeffect on the company's other sales. Which of the following costsis relevant in this decision?
Multiple Choice
$19 unit product cost
$11 variable manufacturing cost
$26 full cost
$1 variable selling and administrative cost
The following are Silver Corporation's unit costs of making andselling an item at a volume of 8,000 units per month (whichrepresents the company's capacity):
| Manufacturing: | |||
| Direct materials | $ | 4 | |
| Direct labor | $ | 5 | |
| Variable overhead | $ | 2 | |
| Fixed overhead | $ | 8 | |
| Selling and administrative: | |||
| Variable | $ | 1 | |
| Fixed | $ | 6 | |
Present sales amount to 7,000 units per month. An order has beenreceived from a customer in a foreign market for 1,000 units. Theorder would not affect regular sales. Total fixed costs, bothmanufacturing and selling and administrative, would not be affectedby this order. The variable selling and administrative costs wouldhave to be incurred for this special order as well as all othersales. Assume that direct labor is a variable cost.
Assume the company has 50 units left over from last year whichhave small defects and which will have to be sold at a reducedprice for scrap. The sale of these defective units will have noeffect on the company's other sales. Which of the following costsis relevant in this decision?
Multiple Choice
$19 unit product cost
$11 variable manufacturing cost
$26 full cost
$1 variable selling and administrative cost
Related questions
13 A manufacturing company that produces a single product hasprovided the following data concerning its most recent month ofoperations: |
Selling price | $149 |
Units in beginning inventory | 0 |
Units produced | 2,770 |
Units sold | 2,520 |
Units in ending inventory | 250 |
Variable costs per unit: | |
Direct materials | $51 |
Direct labor | $20 |
Variable manufacturing overhead | $10 |
Variable selling and administrative | $12 |
Fixed costs: | |
Fixed manufacturing overhead | $96,950 |
Fixed selling and administrative expenses | $35,280 |
The total gross margin for the month under absorption costingis: |
$83,160
$17,640
$130,320
$141,120
14 A manufacturing company that produces a single product hasprovided the following data concerning its most recent month ofoperations: |
Units in beginning inventory | 0 |
Units produced | 4,750 |
Units sold | 4,650 |
Units in ending inventory | 100 |
Variable costs per unit:
Direct materials | $ | 56 |
Direct labor | $ | 58 |
Variable manufacturing overhead | $ | 21 |
Variable selling and administrative | $ | 19 |
Fixed costs:
Fixed manufacturing overhead | $ | 99,750 |
Fixed selling and administrative | $ | 46,500 |
What is the variable costing unit product cost for the month?
$154 per unit
$175 per unit
$135 per unit
$141 per unit
Top of Form
15 Bartelt Inc., which produces a single product, has providedthe following data for its most recent month of operations: |
Number of units produced | 4,600 |
Variable costs per unit: | |
Direct materials | $108 |
Direct labor | $105 |
Variable manufacturing overhead | $5 |
Variable selling and administrative expense | $12 |
Fixed costs: | |
Fixed manufacturing overhead | $184,000 |
Fixed selling and administrative expense | $322,000 |
There were no beginning or ending inventories. The absorptioncosting unit product cost was: |
$213 per unit
$258 per unit
$218 per unit
$340 per unit
16 Rehmer Corporation is working on its direct labor budget forthe next two months. Each unit of output requires 0.09 directlabor-hours. The direct labor rate is $8.50 per direct labor-hour.The production budget calls for producing 5,600 units in June and6,100 units in July. |
Required: | ||||||||||||||||||
| Construct the direct labor budget for the next two months,assuming that the direct labor work force is fully adjusted to thetotal direct labor-hours needed each month. (Round youranswers to 2 decimal places.)
|
Delaney Company has the following flexible budget formulas and amounts:
| Selling price per unit | $54.00 |
| Direct materials per unit | 18.00 |
| Direct labor per unit | 12.00 |
| Variable factory overhead per unit | 7.00 |
| Variable selling and administrative expenses per unit | 4.00 |
| Fixed factory overhead | $450,000 |
| Fixed selling and administrative expenses | 100,000 |
Actual results for the month of October for the production and sale of 48,000 units were as follows:
| Sales revenue | $2,605,000 |
| Direct materials | 868,000 |
| Direct labor | 572,000 |
| Variable factory overhead | 334,000 |
| Variable selling and administrative expenses | 195,000 |
| Fixed factory overhead | 458,000 |
| Fixed selling and administrative expenses | 105,000 |
Prepare a performance report for the month of October.
12.
Elfalan Corporation produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 51,000 units per month is as follows:
| Direct materials | $ | 48.10 |
| Direct labor | $ | 9.20 |
| Variable manufacturing overhead | $ | 2.20 |
| Fixed manufacturing overhead | $ | 19.50 |
| Variable selling & administrative expense | $ | 4.00 |
| Fixed selling & administrative expense | $ | 19.00 |
The normal selling price of the product is $108.10 per unit.
An order has been received from an overseas customer for 3,100 units to be delivered this month at a special discounted price. This order would not change the total amount of the company's fixed costs. The variable selling and administrative expense would be $2.30 less per unit on this order than on normal sales.
Direct labor is a variable cost in this company.
Suppose there is not enough idle capacity to produce all of the units for the overseas customer and accepting the special order would require cutting back on production of 1,250 units for regular customers. The minimum acceptable price per unit for the special order is closest to: (Round your intermediate calculations to 2 decimal places.)
Garrison 16e Rechecks 2017-09-13
Multiple Choice
$92.10 per unit
$108.10 per unit
$69.10 per unit
$79.18 per unit
