1. Bowman, Inc., has only variable costs and fixed costs. A review of the compan
ID: 2501430 • Letter: 1
Question
1. Bowman, Inc., has only variable costs and fixed costs. A review of the company's records disclosed that when 300,000 units were produced, fixed manufacturing costs amounted to $900,000 and the cost per unit manufactured totaled $12. On the basis of this information, how much cost would the firm anticipate at an activity level of 310,000 units
2. Brooklyn sells a single product to wholesalers. The company's budget for the upcoming year revealed anticipated unit sales of 40,200, a selling price of $21, variable cost per unit of $8, and total fixed costs of $398,000. If Brooklyn's unit sales are 350 units less than anticipated, its breakeven point will:
3.
No, because the company will be worse off by $4,000.
No, because sales will drop by 3,000 units.
No, because the company will be worse off by $22,000.
It is impossible to judge because additional information is needed.
Yes, the company will be better off by $6,000.
5.
The following information applies to the questions displayed below.]
Lone Star has computed the following unit costs for the year just ended:
rev: 10_29_2012
5.
Under variable costing, each unit of the company's inventory would be carried at:
$85.
$29.
$61.
None of these.
$54.
6.
Under absorption costing, each unit of the company's inventory would be carried at:
None of these.
$61.
$29.
$54.
$85.
Direct material used $13 Direct labor 19 Variable manufacturing overhead 22 Fixed manufacturing overhead 31 Variable selling and administrative cost 7 Fixed selling and administrative cost 17Explanation / Answer
Ans1 Fixed manufacturing cost of Bowman Inc = $900000
Variable cost of Bowman Inc = $12 * 310000
= $3720000
Total Cost = $900000+$3720000
= $4620000
Ans 2 The break even point will remain the same as it is dependent on fixed cost but not the sales price.
Ans 3 No,GrimX should not make the change because company will be worse off by $4000.
Ans 5 Under variable costing ,the cost will be carried at $61'
Ans 6 Under absorption costing,the cost will be carried at $85.
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