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Scenario:
Joplin Products produced and sold 990 units of the company’s only product in June. You have collected the following information from the accounting records:
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Sales price (per unit) |
$ 492.80 |
|
|
Manufacturing Costs: |
Joplin Products |
|
|
Fixed overhead (for the month) |
55,440.00 |
|
|
Direct labor (per unit) |
38.50 |
|
|
Direct materials (per unit) |
123.20 |
|
|
Variable overhead (per unit) |
77.00 |
|
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Marketing and administrative costs: |
||
|
Fixed costs (for the month) |
74,250.00 |
|
|
Variable costs (per unit) |
15.40 |
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REQUIRED |
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1. Compute the following: |
Answers |
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a. Variable manufacturing cost per unit. |
||
|
Direct labor (per unit) |
38.5 |
|
|
Direct materials (per unit) |
123.2 |
|
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Variable overhead (per unit) |
77 |
|
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Total Variable Cost (per unit) |
238.7 |
|
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b. Full cost per unit. |
||
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Variable Manufacturing Cost per unit |
238.7 |
|
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Variable Marketing and Admin Cost per unit |
15.4 |
|
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Total Vairable Cost (per unit) |
254.1 |
|
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Total Variable Cost (990 units) |
|
251,559.00 |
|
Fixed Manufacturing cost |
55,440.00 |
|
|
Fixed marketing and Admin Cost |
74,250.00 |
|
|
Total Cost |
381,249.00 |
|
|
Cost per unit |
385.10 |
|
|
|
|
|
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e. Prime cost per unit. |
||
|
Direct labor (per unit) |
38.5 |
|
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Direct Materials (per unit) |
123.2 |
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Total Prime cost per unit |
161.7 |
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f. Conversion cost. |
|
|
|
Direct labor (per unit) |
38.5 |
|
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Manufacturing Variable Overhead per unit |
77 |
|
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total converstion cost per unit |
115.5 |
|
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g. Profit margin. |
||
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Sale Prices per unit |
492.8 |
|
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Cost per unit |
385.1 |
|
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Total Profit margin |
198.1 |
|
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h. Contribution margin per unit. |
||
|
Sale Prices per unit |
492.8 |
|
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Total Variable Cost per unit |
254.1 |
|
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Total contribution margin per unit |
238.7 |
|
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i. Gross margin per unit. |
||
|
Sale Prices per unit |
492.8 |
|
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Full Cost per unit |
385.1 |
|
|
Total Gross margin per unit |
107.7 |
|
2. If the number of gadgets produced increases from 990 to 320, that is inside the applicable variety, the cost per unit will be lower (you can check this by using redoing requirement [a] above). Consequently, we must advise Joplin merchandise boom its manufacturing to lessen its fees. Do you settle? Explain.
I agree. Constant expenses are normal; increasing the output inside the applicable range will lessen the fee in keeping with the unit. They could produce more outstanding units, decrease the price steadily with units, and grow their earnings margin.
The post BUS FPX 4064 Assessment 1 Part 2 Cost Concepts and Financial Statements (SOLUTION) appeared first on Tutors Academy.
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