Question
1. Blackbird, Incorporated reports the following information regarding its production cost: Units produced 39,000 units Direct labor $ 13 per unit Direct materials $ 17
1. Blackbird, Incorporated reports the following information regarding its production cost:
Units produced | 39,000 | units |
---|---|---|
Direct labor | $ 13 | per unit |
Direct materials | $ 17 | per unit |
Variable overhead | $ 200 | per unit |
Fixed overhead | $ 9,750,000 | in total |
a. Compute product cost per unit under variable costing. b. Compute product cost per unit under absorption costing
2. Margin Company has total fixed costs of $360,000 and variable costs of $14 per unit. If the unit sales price is reduced from $24 to $20 and advertising is increased by $10,000, sales will increase from 40,000 to 65,000 units. Should Margin reduce its per unit sales price and pay for the additional advertising? (Support your answer with calculations.)
4. Expanse Company is considering the production and sale of a new product line with the following sales and cost data: unit sales price $125; unit variable costs $50; and total fixed costs of $150,000. Calculate the break-even point in units and in dollar sales.
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