Question

The following are Jake’s Tools production costs for the quarter ended September 30th:

Direct materials	$	150,000
Direct labor	$	175,000
Factory overhead	$	225,000

What amount of costs should be traced to specific products in the process?

Group of answer choices

- $225,000

- $175,000

- $150,000

- $325,000

Charlie Company has variable costs of $80 per unit, total fixed costs of $200,000, and a break-even point of 5,000 units. If the variable cost per unit decreases by $8, how many units must Charlie Company sell to break even?

Group of answer choices

- 2,778 units

- 4,167 units

- 2,500 units

- 6,250 units

Answer 1

Answer:

​​​​​1.Answer : Option D ($325000)

​​​​​​ Explanation:

●Traceable Costs: Which has a direct relationship with procces and product

-Direct Materials and direct labour has direct relationship with process and Product,and traceable

-Factory overhead is a fixed cost that does not change with an increase or decrease in the amount of goods or services produced or sold

Therefore Traced Costs= Direct material + Direct Labour

=$150000+$175000

=$325000

2.Answer : Option B(4167Units)

Explanation:

●Calculation of selling price per unit:Let be 'x'

Contribution Margin=Selling price per unit -varaible Cost per unit

=x - $80

BEP in units =Fixes costs/Contribution margin

5000=$20000/(x-8)

Selling price per unit(x)=600000/5000

=$120

●Varible cost per unit decreases by $8

New VC per unit =$80-$8=$72

●Calculation of new BEP in Units:

=Fixed cost/contribution margin

=$200000/&120-$72

=4167units