Armstead Motors assembles the fully electric Model S-85 automobile at its Newark, California, plant. The standard variable manufacturing cost per vehicle in 2017 is $58,500, which consists of: B (Click the icon to view the variable cost per vehicle information.) (Click the icon to view additional information.) Armstead started production of the Model S-85 in 2017. The actual production and sales figures for the first three months of the year are: B (Click the icon to view the production and sales figures.) (Click the icon to view additional information.) Read the requirements. Requirement 1. Compute (a) the fixed manufacturing cost per unit and (b) the total manufacturing cost per unit. The fixed manufacturing cost per unit is $ Data Table i Data Table Direct materials $ 38,000 February March $ 12,500 Production Direct manufacturing labor Variable manufacturing overhead January 3,400 2,500 2,300 3,100 3,300 2,700 $ 8,000 Sales - X More Info -X More Info Variable manufacturing overhead is allocated to vehicles on the basis of assembly time. The standard assembly time per vehicle is 28 hours. The Newark plant is highly automated and has a practical capacity of 3,900 vehicles per month. The budgeted monthly fixed manufacturing overhead is $57,652,000. Fixed manufacturing overhead is allocated on the basis of the standard assembly time for the budgeted normal capacity utilization of the plant. For 2017, the budgeted normal capacity utilization is 2,900 vehicles per month. Blaz Krause is SVP of Armstead and director of the Newark plant. His compensation includes a bonus that is 0.20% of monthly operating income, calculated using absorption costing. Armstead prepares absorption-costing income statements monthly, which include an adjustment for the production-volume variance occurring in that month. There are no variable cost variances or fixed overhead spending variances in the first three months of 2017. The Newark plant is credited with revenue (net of marketing costs) of $110,000 for the sale of each Armstead S-85 vehicle. Print Done Print Done - X 1 Requirements 1. Compute (a) the fixed manufacturing cost per unit and (b) the total manufacturing cost per unit. 2. Compute the monthly operating income for January, February, and March under absorption costing. What amount of bonus is paid each month to Blaz Krause? 3. How much would the use of variable costing change Krause's bonus each month if the same 0.20% figure were applied to variable-costing operating income? 4. Explain the differences in Krause's bonuses in requirements 2 and 3. 5. How much would the use of throughput costing change Krause's bonus each month if the same 0.20% figure were applied to throughput-costing operating income? 6. What are the different approaches Armstead Motors could take to reduce possible undesirable behavior associated with the use of absorption costing at its Newark plant? Print Done Armstead Motors assembles the fully electric Model S-85 automobile at its Newark, California, plant. The standard variable manufacturing cost per vehicle in 2017 is $58,500, which consists of: B (Click the icon to view the variable cost per vehicle information.) (Click the icon to view additional information.) Armstead started production of the Model S-85 in 2017. The actual production and sales figures for the first three months of the year are: B (Click the icon to view the production and sales figures.) (Click the icon to view additional information.) Read the requirements. Requirement 1. Compute (a) the fixed manufacturing cost per unit and (b) the total manufacturing cost per unit. The fixed manufacturing cost per unit is $ Data Table i Data Table Direct materials $ 38,000 February March $ 12,500 Production Direct manufacturing labor Variable manufacturing overhead January 3,400 2,500 2,300 3,100 3,300 2,700 $ 8,000 Sales - X More Info -X More Info Variable manufacturing overhead is allocated to vehicles on the basis of assembly time. The standard assembly time per vehicle is 28 hours. The Newark plant is highly automated and has a practical capacity of 3,900 vehicles per month. The budgeted monthly fixed manufacturing overhead is $57,652,000. Fixed manufacturing overhead is allocated on the basis of the standard assembly time for the budgeted normal capacity utilization of the plant. For 2017, the budgeted normal capacity utilization is 2,900 vehicles per month. Blaz Krause is SVP of Armstead and director of the Newark plant. His compensation includes a bonus that is 0.20% of monthly operating income, calculated using absorption costing. Armstead prepares absorption-costing income statements monthly, which include an adjustment for the production-volume variance occurring in that month. There are no variable cost variances or fixed overhead spending variances in the first three months of 2017. The Newark plant is credited with revenue (net of marketing costs) of $110,000 for the sale of each Armstead S-85 vehicle. Print Done Print Done - X 1 Requirements 1. Compute (a) the fixed manufacturing cost per unit and (b) the total manufacturing cost per unit. 2. Compute the monthly operating income for January, February, and March under absorption costing. What amount of bonus is paid each month to Blaz Krause? 3. How much would the use of variable costing change Krause's bonus each month if the same 0.20% figure were applied to variable-costing operating income? 4. Explain the differences in Krause's bonuses in requirements 2 and 3. 5. How much would the use of throughput costing change Krause's bonus each month if the same 0.20% figure were applied to throughput-costing operating income? 6. What are the different approaches Armstead Motors could take to reduce possible undesirable behavior associated with the use of absorption costing at its Newark plant? Print Done