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Chataqua Can Company manufactures metal cans used in the food-processing industry. A case of cans sells for $25. The variable costs of production for
Chataqua Can Company manufactures metal cans used in the food-processing industry. A case of cans sells for $25. The variable costs of production for one case of cans are as follows: Direct material Direct labor Variable manufacturing overhead Total variable manufacturing cost per case $7.00 2.50 7.00 $16.50 es Variable selling and administrative costs amount to $0.70 per case. Budgeted fixed manufacturing overhead is $304,000 per year, and fixed selling and administrative cost is $38,500 per year. The following data pertain to the company's first three years of operation. Year 1 Year 2 Year 3 Planned production (in units) Finished-goods inventory (in units), January 1 Actual production (in units) 76,000 76,000 76,000 0 21,000 76,000 76,000 76,000 Sales (in units) 76,000 55,000 86,500- Finished-goods inventory (in units), December 31 0 21,000 10,500 Actual costs were the same as the budgeted costs.
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