PART 8 (6 points) Jasper Co. estimates that variable costs will be 70% of sales
ID: 2590721 • Letter: P
Question
PART 8 (6 points) Jasper Co. estimates that variable costs will be 70% of sales and find cots wiltoel S AlsmThe selling price of the product is $25, and 450,000 units will be sold Instructions: Please answer ell of the follewing 2 questions. You must show your computations and record your final answers on the lines provided () What is the break-even point in dollars? (3 points) Final answer. (Show your computations in the space below) (2) How many units would have to be sold to generate net income of $1,400,0007 (3 points) Final answer Show your compulations in the space below PART 9 (8 points) The standard cost of Product GG includes 4 hours of direct labor at $15 per hour. The predetermined overhead rate is $8.50 per direct labor hour. Daring April, the company incurred 2,845 hours of direct labor at an average rate of $14.85 per hour and $24,115 of manufacturing overhcad costs. The produced 700 units in April company lastrections: Please answer elof the follening 4 questions. You must show your computations and recond your fonal answers on she lines provided (1) What is the total labor variance? (2 points) Final answer: Show your computations in the space below) (2) What is the labor price variance? (2 points) Final answer Show your computations in the space below (3) What is the labor quantity variance? (2 points) Final answer (Show your computations in the space below) (4) What is the total overhead variance? (2 points) Final answer Show your compulations in the space below PAGE 6Explanation / Answer
Answer to Part 8.
Selling Price = $25
Variable Costs per unit = $25 * 70%
Variable Costs per unit = $17.50
Contribution Margin per unit = Selling Price - Variable Costs per unit
Contribution Margin per unit = $25 - $17.50
Contribution Margin per unit = $7.50
Answer 1.
Break-even Point in dollars = Fixed Costs / Contribution Margin per unit
Break-even Point in dollars = $2,415,000 / $7.50
Break-even Point in dollars = 322,000
Answer 2.
Required unit sales = (Fixed Costs + Desired Net Income) / Contribution Margin per unit
Required unit sales = ($2,415,000 + $1,400,000) / $7.50
Required unit sales = 508,667
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