In: Accounting
Question No-1
XYZ, Inc., incurs the following costs to produce and sell a single product.
Variable costs per unit:
Direct materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10
Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $5
Variable manufacturing overhead . . . . . . . . . . . . . . $2
Variable selling and administrative expenses . . . . $4
Fixed costs per year:
Fixed manufacturing overhead . . . . . . . . . . . . . . . . . . $90,000
Fixed selling and administrative expenses . . . . . . .$300,000
During the last year, 30,000 units were produced and 25,000 units were sold. The Finished Goods inventory account at the end of the year shows a balance of $85,000 for the 5,000 unsold units.
Required: