Question
In: Accounting
Intercontinental, Inc., provides you with the following data for its single product: Sales price per unit...
Intercontinental, Inc., provides you with the following data for its single product:
| Sales price per unit | $ | 51.00 | |
| Fixed costs (per month): | |||
| Selling, general, and administrative (SG&A) | 900,000 | ||
| Manufacturing overhead | 1,800,000 | ||
| Variable costs (per unit): | |||
| Direct labor | 6.00 | ||
| Direct materials | 13.00 | ||
| Manufacturing overhead | 9.00 | ||
| SG&A | 5.00 | ||
| Number of units produced per month | 300,000 | units | |
Required:
Compute the amounts for each of the following assuming that both production levels are within the relevant range. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
300,000 units 400,000 units
a.Prime cost per unit.
b.Contribution margin per unit.
c.Gross margin per unit.
d.Conversion cost per unit.
e.Variable cost per unit.
f.Full absorption cost per unit.
g.Variable production cost per unit.
h.Full cost per unit.
Solutions
Expert Solution
(a) Prime Cost per unit:
| Direct Material per unit | $13 |
| Direct Labor per unit | $6 |
| Prime cost per unit | $19 |
(b) Contribution Margin per unit:
| Selling price per unit | $51 |
| Less: Variable costs per unit | |
| - Direct Material | $13 |
| - Direct Labor | $6 |
| - Manufacturing Overhead | $9 |
| - SG&A | $5 |
| Contribution margin per unit | $18 |
(c) Gross Margin per unit:
In Case of 300,000 units produced
| Selling price per unit | $51 |
| Less: Variable costs per unit | |
| - Direct Material | $13 |
| - Direct Labor | $6 |
| - Manufacturing Overhead | $9 |
| Less: Fixed Manufacturing Overhead per unit [1800000/300000] | $6 |
| Gross margin per unit | $17 |
In Case of 400,000 units produced
| Selling price per unit | $51 |
| Less: Variable costs per unit | |
| - Direct Material | $13 |
| - Direct Labor | $6 |
| - Manufacturing Overhead | $9 |
| Fixed Manufacturing Overhead [1800000/400000] | $4.50 |
| Gross margin per unit | $18.50 |
.
(d) Conversion Cost per unit:
In Case of 300,000 units produced
| - Direct Labor | $6 |
| - Variable Manufacturing Overhead | $9 |
| - Fixed manufacturing overhead per unit [1800000/300000] | $6 |
| Conversion cost per unit | $21 |
In case of 400,000 units produced
| - Direct Labor | $6 |
| - Variable Manufacturing Overhead | $9 |
| - Fixed manufacturing overhead per unit [1800000/400000] | $4.50 |
| Conversion cost per unit | $19.50 |
(e.) Variable Cost per unit:
| Variable costs per unit | |
| - Direct Material | $13 |
| - Direct Labor | $6 |
| - Manufacturing Overhead | $9 |
| - SG&A | $5 |
| Variable costs per unit | $33 |
(f.) Full absorption cost per unit:
In case 300,000 units are produced
| - Direct Material | $13 |
| - Direct Labor | $6 |
| - Manufacturing Overhead | $9 |
| - Fixed Manufacturing Overhead per unit [1800000/300000] | $6 |
| Full Absorption cost per unit | $34 |
In case 400,000 units are produced
| - Direct Material | $13 |
| - Direct Labor | $6 |
| - Manufacturing Overhead | $9 |
| - Fixed Manufacturing Overhead per unit [1800000/400000] | $4.50 |
| Full Absorption cost per unit | $32.50 |
(g.) Variable production cost per unit:
| - Direct Material | $13 |
| - Direct Labor | $6 |
| - Manufacturing Overhead | $9 |
| Variable Production cost per unit | $28 |
(h.) Full cost per unit:
In case 300,000 units are produced
| - Direct Material | $13 |
| - Direct Labor | $6 |
| - Manufacturing Overhead | $9 |
| - SG&A | $5 |
| - Fixed Manufacturing Overhead per unit [1800000/300000] | $6 |
| - Fixed SG&A [900000/300000] | $3 |
| Full cost per unit | $42 |
In case 400,000 units are produced
| - Direct Material | $13 |
| - Direct Labor | $6 |
| - Manufacturing Overhead | $9 |
| - SG&A | $5 |
| - Fixed Manufacturing Overhead per unit [1800000/400000] | $4.50 |
| - Fixed SG&A [900000/400000] | $2.25 |
| Full cost per unit | $39.75 |
ekkarill92 answered 2 years agoRelated Solutions
Intercontinental, Inc., provides you with the following data for its single product: Sales price per unit...
Intercontinental, Inc., provides you with the following data for
its single product:
Sales price per unit
$
50.00
Fixed costs (per month):
Selling, general, and administrative (SG&A)
1,800,000
Manufacturing overhead
2,700,000
Variable costs (per unit):
Direct labor
7.00
Direct materials
12.00
Manufacturing overhead
9.00
SG&A
4.00
Number of units produced per month
300,000
units
Required:
Compute the amounts for each of the following assuming that both
production levels are within the relevant range. (Do not
round intermediate calculations. Round your...
Intercontinental, Inc., provides you with the following data for its single product: Sales price per unit...
Intercontinental,
Inc., provides you with the following data for its single
product:
Sales price per
unit
$
51.00
Fixed costs (per
month):
Selling,
general, and administrative (SG&A)
1,800,000
Manufacturing
overhead
2,700,000
Variable costs
(per unit):
Direct
labor
7.00
Direct
materials
12.00
Manufacturing
overhead
9.00
SG&A
6.00
Number of units
produced per month
300,000
units
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