Variable costs per unit: Direct materials $ 91 Fixed costs per year: Direct labor $ 1,317,900...

Variable costs per unit:

Direct materials $ 91

Fixed costs per year:

Direct labor $ 1,317,900

Fixed manufacturing overhead $ 4,068,300

Fixed selling and administrative expenses $ 2,088,000

The company does not have any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, the company produced 57,300 units and sold 55,300 units. The company’s only product is sold for $234 per unit. The company is considering using either super-variable costing or a variable costing system that assigns $23 of direct labor cost to each unit that is produced. Which of the following statements is true regarding the net operating income in the first year? Multiple Choice Variable costing net operating income exceeds super-variable costing net operating income by $142,000. Super-variable costing net operating income exceeds variable costing net operating income by $142,000. Variable costing net operating income exceeds super-variable costing net operating income by $46,000. Super-variable costing net operating income exceeds variable costing net operating income by $46,000.

Solutions

Expert Solution

ekkarill92 answered 11 months ago

Next > < Previous

Related Solutions

Variable costs per unit: Direct materials $ 10 Direct labor $ 8 Variable manufacturing overhead $...

Variable costs per unit: Direct materials $ 10 Direct labor $ 8 Variable manufacturing overhead $ 3 Variable selling and administrative expenses $ 6 Fixed costs per year: Fixed manufacturing overhead $ 117,000 Fixed selling and administrative expenses $ 320,000 During the last year, 29,250 units were produced and 24,000 units were sold. The Finished Goods inventory account at the end of the year shows a balance of $110,250 for the 5,250 unsold units. Required: 1. Determine whether the...

Variable costs per unit: Manufacturing: Direct materials $ 27 Direct labor $ 13 Variable manufacturing overhead...

Variable costs per unit: Manufacturing: Direct materials $ 27 Direct labor $ 13 Variable manufacturing overhead $ 2 Variable selling and administrative $ 1 Fixed costs per year: Fixed manufacturing overhead $ 320,000 Fixed selling and administrative expenses $ 90,000 During its first year of operations, Walsh produced 50,000 units and sold 40,000 units. During its second year of operations, it produced 40,000 units and sold 50,000 units. The selling price of the company’s product is $58 per unit. Assume...

Selling price per unit $20.00 Variable costs per unit: Direct materials $4.00 Direct manufacturing labor $1.60...

Selling price per unit $20.00 Variable costs per unit: Direct materials $4.00 Direct manufacturing labor $1.60 Manufacturing overhead $0.40 Selling costs $2.00 Fixed costs $96,000 A. Calculate the number of units the company must sell to break even. B. Calculate net profit/net lose if the company sold 9,500 units. C. Calculate the number of units the company must sell to make a net profit of $144,000.

Hyde Farms Per Unit Direct materials $19 Direct labor $11 Variable overhead $6 Fixed overhead $9...

Hyde Farms Per Unit Direct materials $19 Direct labor $11 Variable overhead $6 Fixed overhead $9 Total $45 Hydes Hyde Farms Inc. a US based firm located in Topeka, Kansas has a capacity of 95,000 units. The are currently producing and selling 90,000 units at $50 per unit. The cost of a unit at the present production level is provided in the analysis above. An order for 10,000 units has just been received from Von Boom Corp (a domestic business...

Rome Metals Cost Breakdown Per Unit Direct materials $8 Direct labor $45 Variable overhead $9 Fixed...

Rome Metals Cost Breakdown Per Unit Direct materials $8 Direct labor $45 Variable overhead $9 Fixed overhead $14 Shipping Cost $2 Total Per Unit $78 Rome Metals a US based firm located in Rome, Georgia makes metal brackets used in the construction of warehouse shelving. The firm has a practical capacity of 42,000 units and for the past several years has produced at a constant volume of 35,000 units/year. Rome Brackets are priced at $92/unit. The manufacturing costs incurred to...

Direct Materials, Direct Labor, and Reports budgeted and actual costs for variable and fixed factory overhead...

Direct Materials, Direct Labor, and Reports budgeted and actual costs for variable and fixed factory overhead along with the related controllable and volume variances.Factory Overhead Cost Variance Analysis Mackinaw Inc. processes a base chemical into plastic. A detailed estimate of what a product should cost.Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the manufacture of 7,200 units of product were as follows: Standard Costs Actual Costs Direct materials 9,400 lb. at $5.20 9,300...

Variable Cost Per Unit: Manufacturing: Direct Materials = $20 Direct Labor = $12 Variable Manufacturing Overhead...

Variable Cost Per Unit: Manufacturing: Direct Materials = $20 Direct Labor = $12 Variable Manufacturing Overhead = $4 Variable Selling and Administrative = $2 Fixed costs per year: Fixed manufacturing overhead = $960,000 Fixed selling and administrative expenses = $240,000 During its first year of Operations, produced 60,000 units and sold 60,000 units. During it's second year of operations, it produced 75,000 and sold 50,000 units. In its third year, it produced 40,000 units and sold 65,000 units. The selling...

Data Selling price per unit $50 Manufacturing costs: Variable per unit produced: Direct materials $11 Direct...

Data Selling price per unit $50 Manufacturing costs: Variable per unit produced: Direct materials $11 Direct labor $6 Variable manufacturing overhead $3 Fixed manufacturing overhead per year $120,000 Selling and administrative expenses: Variable per unit sold $4 Fixed per year $70,000 Year 1 Year 2 Units in beginning inventory 0 Units produced during the year 10,000 6,000 Units sold during the year 8,000 8,000 Enter a formula into each of the cells marked with a ? below Review Problem 1:...

Estimated Fixed Cost Estimated Variable Cost (per unit sold) 2 Production costs: 3 Direct materials —...

Estimated Fixed Cost Estimated Variable Cost (per unit sold) 2 Production costs: 3 Direct materials — $56.00 4 Direct labor — 34.00 5 Factory overhead $188,000.00 20.00 6 Selling expenses: 7 Sales salaries and commissions 102,000.00 6.00 8 Advertising 39,000.00 — 9 Travel 12,000.00 — 10 Miscellaneous selling expense 7,400.00 1.00 11 Administrative expenses: 12 Office and officers’ salaries 141,200.00 — 13 Supplies 8,000.00 2.00 14 Miscellaneous administrative expense 13,600.00 1.00 15 Total $511,200.00 $120.00 It is expected that 21,300...

Hutto Corp. has set the following standard direct materials and direct labor costs per unit for...

Hutto Corp. has set the following standard direct materials and direct labor costs per unit for the product it manufactures. Direct materials (15 lbs. @ $4 per lb.) $60 Direct labor (4 hrs. @ $14 per hr.) 56 During May the company incurred the following actual costs to produce 8,200 units. Direct materials (125,700 lbs. @ $3.80 per lb.) $ 477,660 Direct labor (36,900 hrs. @ $14.10 per hr.). 520,290 AH = Actual Hours SH = Standard Hours AR =...

Subjects