1) Total costs are $240,000 when 20,000 units are produced; of this amount, vari
ID: 2540036 • Letter: 1
Question
1) Total costs are $240,000 when 20,000 units are produced; of this amount, variable costs are $80,000. What are the total costs when 22,000 units are produced?
Multiple Choice
$248,000.
$256,000.
$264,000.
None of these.
Total costs cannot be calculated based on the information presented.
2)The accounting records of Dolphin Company revealed the following information:
Total manufacturing costs $ 550,000
Work-in-process inventory, Jan. 1 58,000
Work-in-process inventory, Dec. 31 80,000
Finished-goods inventory, Jan. 1 148,000
Finished-goods inventory, Dec. 31 125,000
Dolphin's cost of goods sold is:
Multiple Choice
$528,000.
$549,000.
$551,000.
$573,000.
None of these.
Explanation / Answer
1.Total fixed cost=Total cost-Total variable cost
=(240,000-80000)=$160000
VC/unit=(80000/20000)=$4/unit
Hence total cost for 22000 units=(4*22000)+160,000
=$248000
2.
COGS=( Total manufacturing costs+Beginning WIP-Ending WIP)+Beginning FG-Ending FG
=(550,000+58000-80000)+(1480000-125000)
=$551000
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