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(2.) Can Dynamics Corporations manufactured 1,000 units of product last year and identified the following costs associated with the manufacturing activity: Direct materials used (V)
(2.) Can Dynamics Corporations manufactured 1,000 units of product last year and identified the following costs associated with the manufacturing activity: Direct materials used (V) P 25,200 Direct labor (V) 46,500 Supervisory salaries (F) 11,100 Indirect materials and supplies (V) 8,000 Plant utilities (other than power to run plant 9,600 equipment) (F) Power to run plant equipment (V) 7,100 Depreciation on plant and equipment (SL basis 4,800 only) Property taxes on building (F) 6,500 Unit variable costs and total fixed costs are expected to remain unchanged next year. Required: Calculate the unit cost and total cost if 1,200 units are produced next year. (4) Home Entertainment Center (HEC) operates a large store in Ortigas. The store has both a video section and a musical (CDs and tapes) section. HEC reports revenues for the video section separately from the musical section. Required: Classify each of the following cost items as: (i) Direct or indirect (D or I) costs with respect to the video section. (ii) Fixed, variable, or semi-variable (F, V, or S) costs with respect to how the total costs of the video section change as the number of videos sold changes. (a) Annual retainer paid to a video distributor. (b) Electricity costs of HEC store (single bill covers entire store) (c) Costs of videos purchased for sale to customers (d) Subscription to Video Times magazine (e) Leasing of computer software used for financial budgeting at HEC store (f) Cost of popcorn provided free to all customers of HEC (g) Earthquake insurance policy for HEC store (h) Freight-in costs of videos purchased by HEC
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