Question

In: Accounting

Michael's Machine Shop reports the following information for the quarter. Sales price $ 90 Fixed costs...

Michael's Machine Shop reports the following information for the quarter.

Sales price $ 90
Fixed costs (for the quarter)
Selling and administrative 47,700
Production 143,100
Variable cost (per unit)
Materials 22
Labor 19
Plant supervision 12
Selling and administrative 13
Number of units (for the quarter) 23,850 units

Required:

Select the answer for each of the following costs.

a. Variable cost per unit.

b. Variable production cost per unit.

c. Full cost per unit.

d. Full absorption cost per unit.

e. Prime cost per unit.

f. Conversion cost per unit.

g. Contribution margin per unit.

h. Gross margin per unit.

Solutions

Expert Solution

Ans. A Variable cost per unit:
Materials $22
Labor $19
Plant supervision $12
Selling and administrative $13
Variable cost per unit $66
Ans. B Variable production cost per unit:
Materials $22
Labor $19
Plant supervision $12
Variable production cost per unit $53
Ans. C Full cost per unit = Total Variable cost per unit + Total Fixed cost per unit
$66 + $6 + $2
$74 per unit
*Fixed production cost per unit = Fixed production cost / Number of units
$143,100 / 23,850
$6 per unit
*Fixed selling and administraitve cost per unit = Fixed selling and administraitve cost / Number of units
$47,700 / 23,850
$2 per unit
Ans. D Full abosorption cost per unit = Fixed production cost per unit + Variable production cost per unit
$6 + $53
$59 per unit
Ans. E Prime cost per unit   =   Direct materials per unit + Direct labor per unit
$22 + $19
$41 per unit
Ans. F Coversion cost per unit   =   Direct labor per unit + Variable overhead per unit
$19 + $12
$31 per unit
Ans. G Contribution margin per unit =   Sales price per unit - Total Variable cost per unit
$90 - $66
$24 per unit
Ans. H Gross margin per unit =   Sales price per unit - Full Absorption cost per unit
$90 - $59
$31   per unit

ekkarill92 answered 1 year ago
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