Problem 5-6 (Part Level Submission) The following information is available for D

Question

Problem 5-6 (Part Level Submission) The following information is available for Dunworth Canoes, a company that builds inexpensive aluminum canoes: 2014 2015 Total Units produced 21,300 13,700 35,000 Units sold 17,500 17,500 35,000 Selling price per unit $590 $590 Variable production costs per unit $191.00 $191.00 Direct material per unit $73 $73 Direct labor per unit $55 $55 Variable manufacturing overhead per unit $63 $63 Fixed manufacturing overhead per year $724,200 $724,200 Fixed selling and administrative expense per year $212,200 $212,200 In its first year of operation, the company produced 21,300 units but was able to sell only 17,500 units. In its second year, the company needed to get rid of excess inventory (the extra 3,800 units produced but not sold in 2014) so it cut back production to 13,700 units. Collapse question part (a) Calculate profit for both years using full costing. (Round cost per unit to 2 decimal places, e.g. 15.25 and final answers to 0 decimal places, e.g.125.) 2014 2015 Net profit $ $

Explanation / Answer

2014 2015

fixed manufactrig overheads $724,200 $724,200

number of units produced 21,300 13,700

per unit cost $34 $52.86

Particulars 2014 2015

Selling price $590 $590

Direct material $73 $73
Direct labor $55 $55
Overheads $63 $63
fixed manugacturing overheads $34 $52.86

product cost $225 $243.86

revenue $590*17,500 $10,325,000 $10,325,000 ($590*17,500)

product cost $225*17,500 ($3,937,500) ($3,340,900) (243.86*13,700)
Opening inventory cost - ($855,000) (225*3,800)

Contribution $6,387,500 $6,129,100   

Selling expense ($212,200) (212,200)

net income $6,175,300 $5,916,900

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