Question

Alabama State University College of Business Administration ACT 526 Advanced Managerial/Cost Accounting Excerise I January 15, 2020 Due January 17, 2020 1) Saxbury Corporation's relevant range of activity is 3,000 units to 7,000 units. When it produces and sells 5,000 units, its average costs per unit are as follows: Average Cost per Unit SS 30 Direct materials Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expert istrative expense Sales commissies Variable administrative expense S1.SO $3.90 0.75 S060 SOSO S0.50 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 6,000 units are sold, what is the variable cost per unit sold? d. If 6,000 units are sold, what is the total amount of variable costs related to the units sold? e. If 6,000 units are produced, what is the average fixed manufacturing cost per unit produced? f. If 6,000 units are produced, what is the total amount of fixed manufacturing cost incurred? g. If 6,000 units are produced, what is the total amount of manufacturing overhead cost incurred? What is this total amount expressed on a per unit basis? h. If the selling price is $22.90 per unit, what is the contribution margin per unit sold? i. If 4,000 units are produced, what is the total amount of direct manufacturing cost incurred? j. If 4,000 units are produced, what is the total amount of indirect manufacturing cost incurred? k. What incremental manufacturing cost will the company incur if it increases production from 5,000 to 5,001 units?

Answer 1

Date Page Roduct cost per wuit & Direct Material Direct labour Variable Maufacturing Overhead fired Manufacturing aurhead Product cost incurred to make coto 5000 X 14,35 = $ 5.30 3.65 - 1.50 3.90 waits 71750 Period cast selling & Admonstrative expenses Period Cart per vuit Aired selling expense 0.75 fired administrative expence 0.60 Selling Commission 0.50 Variable adminstrative expence 0.50 2.35 Brind cast for 5000 buty - = 5000 X 2.35 = $ 11750 5.30 Total Variable cost for auch sold Dived Material Direct labour 365 Variable Manufacturing overhead 1.50 Sales Commission o 0.5 Variable adminstrative expust 0.5 11.45

Date Page Variable for Good Units 1 cose per unit seld 11.45 x bet vasts Forex Geto van = 13-74 per unit = variable Cost per wit sold - 12.74 Vuit soldy Total variable cost for Good 6000 X 13.74 - $ 82440 e f Averegi fred Manufacturing cost per unit = $2.90 Amarant of fixed Manufacturing Cast for production 4 6000 buit X 3.90 $ 23400 freed Manufacturing Overhead cast pes vuit = 9.90 Variable Manufacturing Overhead cost for Good vuit To 6000 - 1.spun unit Ansent of Total Manfreturing cast for foro buits - Cooox (390+18) ) Good X 5.7 - $34200

Date Page cost Contribution - Sales - variable Contribution per vult Soles per buit 2290 Less & Direct Material 510 Divece labour 3.65 Variable danufacturing Overhead 115 Siles Commission Variable adminstrative expense 0.5 0.5 Contribution purgin pu uit (rooruit) 11:45 5000 vuite & 3.65- Direct Muufacturing Cost per buit for Diveet asterin Direct labour Variable Meunfortuning Overland 1.5 10.45 Direct manufacturing Cost pu vuit for tour - ooo X9000 yooo vuit total Direct Mounforturing Cast for yooo vuit ut - Yooo X 8.36 = $ 33440

Date Page Total indivect Manufacturing Cost Pred adminstrative supeuse Variable administrative expense 0.6 of for 4000 units 5 - e_ X yooo 0.88 Jobs I Ý yood 80.88 $ 3.520 k Total Manufacturing Cost at Sooo but y - Direct labour - 3.05 - Direct Material och 5.30 Variable Maurfacturing Acehed 1,50 Freed Marufacturing overhead no 390 1435 1455 Total Manufacturing Cost at rood vult - Por 5000 vuit & lyng X500) - 14, 35287 per but Incrimental cost of [5ood-soo x 14.25217 $14.8587