Question

In: Accounting

Learned Corporation has provided the following information: Cost per Unit Cost per Period Direct materials $...

Learned Corporation has provided the following information: Cost per Unit Cost per Period Direct materials $ 5.60 Direct labor $ 4.55 Variable manufacturing overhead $ 2.15 Fixed manufacturing overhead $ 21,000 Sales commissions $ 0.80 Variable administrative expense $ 0.70 Fixed selling and administrative expense $ 6,500 Required: a. For financial reporting purposes, what is the total amount of product costs incurred to make 5,000 units? b. For financial reporting purposes, what is the total amount of period costs incurred to sell 5,000 units? c. If the selling price is $24.40 per unit, what is the contribution margin per unit sold? (Round your answer to 2 decimal places.) d. If 6,000 units are produced, what is the total amount of direct manufacturing cost incurred? e. If 6,000 units are produced, what is the total amount of indirect manufacturing costs incurred?

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Expert Solution

Answer of Part a:

Total Product Cost = Direct Material + Direct Labor + Variable Manufacturing Overhead + Fixed Manufacturing Overhead
Total Product Cost = ($5.60 * 5,000) + ($4.55 * 5,000) + ($2.15 *5,000) + $21,000
Total Product Cost = $28,000 + $22,750 + $10,750 + $21,000
Total Product Cost = $82,500

Answer of Part b:

Total Period Cost = (Sales Commission + Variable Administrative Expense)* No.of Unit + Fixed Selling and Administrative Expense
Total Period Cost = ($0.80 + $0.70) * 5,000 + $6,500
Total Period Cost = $1.5 * 5,000 + $6,500
Total Period Cost = $7,500 + $6,500
Total Period Cost = $14,000

Answer of Part c:

Variable Cost per unit = Direct Material + Direct Labor + Variable Manufacturing Overhead + Sales Commission + Variable Administrative Expense
Variable Cost per unit = $5.60 + $4.55 + $2.15 + $0.80 + $0.70
Variable Cost per unit = $13.8

Contribution Margin per unit = Selling price per unit – Variable Cost per unit
Contribution Margin per unit = $24.40- $13.8
Contribution Margin per unit = $10.60

Answer of Part d:

Total Direct Manufacturing Cost = (Direct Material per unit + Direct Labor per unit) * No. of Unit
Total Direct Manufacturing Cost = ($5.60 + $4.55) * 6,000
Total Direct Manufacturing Cost = $10.15 * 6,000
Total Direct Manufacturing Cost = $60,900

Answer of Part e:

Total Indirect Manufacturing Cost = Variable manufacturing overhead per unit * No. of Unit + Fixed Manufacturing Overhead
Total Indirect Manufacturing Cost = $2.15 * 6,000 + $21,000
Total Indirect Manufacturing Cost = $12,900 + $21,000
Total Indirect Manufacturing Cost = $33,900


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