Kray Inc., which produces a single product, has provided the following data for
ID: 2537732 • Letter: K
Question
Kray Inc., which produces a single product, has provided the following data for its most recent month of operations:
There were no beginning or ending inventories. The variable costing unit product cost was:
Multiple Choice
$146 per unit
$63 per unit
$67 per unit
$58 per unit
.
A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations:
The total gross margin for the month under absorption costing is:
Multiple Choice
$81,900
$21,840
$128,430
$139,230
Number of units produced 5,800 Variable costs per unit: Direct materials $ 34 Direct labor $ 20 Variable manufacturing overhead $ 9 Variable selling and administrative expense $ 4 Fixed costs: Fixed manufacturing overhead $ 481,400 Fixed selling and administrative expense $ 464,000Explanation / Answer
Answer 1 The variable costing unit product cost Per Unit Direct materials $34.00 Direct Labour $20.00 Variable Manufacturing Overhead $9.00 Unit product cost $63.00 The answer is $63 per unit. Answer 2 The absorption costing unit product cost Per Unit Direct materials $47.00 Direct Labour $21.00 Variable Manufacturing Overhead $16.00 Fixed Manufacturing overhead $30.00 Unit product cost $114.00 Fixed manufacturing overhead cost per unit = Total Fixed manufacturing overhead cost / Units produced = $90600 / 3020 units = $30 per unit Calculation of the total gross margin for the month under absorption costing Sales [2730 units * $144] $393,120.00 Less : Cost of goods sold [2730 units * $114] $311,220.00 Gross Margin for the month $81,900.00 The answer is $81,900
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