Problem 3-24 Points The ABC Manufacturing company\'s cost accountant has provide

Question

Problem 3-24 Points The ABC Manufacturing company's cost accountant has provided you with the following information for the accounting records of October, 2017. Direct Materials Fixed Manufacturing overhead Fixed sales overhead Sales price per unit of their Single product sold Variable manufacturing overhead $6 per unit Direct Labor Fixed marketing and admin costs $110,000 $15 per unit $150,000 $50,000 $100 $20 per unit Units produced and sold 40,000 Variable Marketing costs $8 per unit Calculate each of the following items: 3pts each 1. Variable costs per unit 2. Variable manufacturing costs per unit 3. Full absorption cost per unit 4. Full cost per unit 5. Profit margin per unit 6. Gross profit margin per unit 7. Conversion costs per unit 8. Contribution Margin per unit

Explanation / Answer

1) Variable Cost Direct Material $   15.00 Variable manufacturing overhead $      6.00 Direct Labour $   20.00 Variable marketing cost $      8.00 Total Variable Cost per unit $   49.00 2) Variable Manufacturing Cost Direct Material $   15.00 Variable manufacturing overhead $      6.00 Direct Labour $   20.00 Total Variable Manufacturing Cost per unit $   41.00 3) Full absorption cost per unit Per unit Direct Material $   15.00 Variable manufacturing overhead $      6.00 Direct Labour $   20.00 Fixed Manufacturing overhead ($150,000/40000) $      3.75 Full absorption cost per unit $   44.75 4) Full cost per unit Per unit Direct Material $   15.00 Variable manufacturing overhead $      6.00 Direct Labour $   20.00 Fixed Manufacturing overhead ($150,000/40000) $      3.75 Total Production cost per unit (a) $   44.75 Add: Selling & admin cost Fixed sales overhead ($50,000/40000) $      1.25 Fixed marketing and admin cost ($110,000/40000) $      2.75 Variable Marketing cost $      8.00 Total Selling and administration costs (b) $   12.00 Full cost per unit c =a+b $   56.75 5) Profit margin per unit Selling price per unit $ 100.00 Less: Full cost per unit $ (56.75) Profit margin per unit $   43.25 6) Gross profit margin per unit Selling price per unit $ 100.00 Less: Production cost per unit $ (44.75) Gross profit margin per unit $   55.25 7) Conversion cost per unit Per unit Direct Labour $   20.00 Variable manufacturing overhead $      6.00 Fixed Manufacturing overhead ($150,000/40000) $      3.75 Conversion cost per unit $   29.75 8) Contribution margin per unit Selling price per unit $ 100.00 Less: Varibale cost per unit (as per 1) $ (49.00) Contribution margin per unit $   51.00

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