Question

1) Jackmaster Equipment is an up-scale, higher-priced, specialty road construction equipment maker based in Irvine, California. The management accountant for Jackmaster compiled information for various levels of output in units, the relevant range for this company is estimated from 0 – 9,000 units. Production above this output incurs additional variable cost per unit of $15,000, additional fixed selling costs of $2,000,000 and additional fixed manufacturing costs of $20,000,000. : OUTPUT 3,000 5,000 8,000 10,000 Variable mfg. costs $182,000,000 Fixed mfg. costs 255,000,000 Variable sell. costs 56,000,000 Fixed sell. costs 12,000,000 Total costs Sales price per unit 160,000 160,000 160,000 160,000 Unit cost Profit per unit Required: Rounding all calculations to the nearest dollar, complete the missing information with the correct figures

Answer 1

Output	Revenue (Output*sales price )	Variable Manufacturing Cost	Fixed Manufacturing Cost	Variable Selling Cost	Fixed Selling Cost	Profit/Loss	Profit/Loss Per Unit
3000 Units	480,000,000	(182,000,000)	(255,000,000)	(56,000,000)	(12,000,000)	(25,000,000)	$(8333)
5000 Units	800,000,000	(303,335,000)	(255,000,000)	(93,335,000)	(12,000,000)	136,330,000	$27266
8000 Units	1,280,000,000	(485,336,000)	(255,000,000)	(149,336,000)	(12,000,000)	378,328,000	$47,291
10000 Units	1,600,000,000	(621,670,000)	(275,000,000)	(186,670,000)	(14,000,000)	502,660,000	$50,266

Variable Manufacturing Cost per Unit = 182,000,000/3000 = $60667

Variable Selling Cost Per Unit = 56,000,000/3000 = $18667

Above 9000 units, additional costs are added, $2,000,000 to fixed selling cost and $20,000,000 to fixed manufacturing cost and a variable cost of $15,000 per unit(added to variable manufacturing cost per unit).

Variable manufacturing cost(10000 units) = 9000*60667 + 1000*75667 = 546,003,000 + 75,667,000 = $621,670,000