Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Fizzy-Cola spends $1 on direct materials, direct labor, and variable manufacturing overhead for every unit (12-pack of soda) it produces. Fixed manufacturing overhead costs $7

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Fizzy-Cola spends $1 on direct materials, direct labor, and variable manufacturing overhead for every unit (12-pack of soda) it produces. Fixed manufacturing overhead costs $7 million per year. The plant, which is currently operating at only 70 % of capacity, produced 25 milion units this year. Management plans to operate closer to full capacity next year, producing 35 million units. Management doesn't anticipate any changes in the prices it pays for materials, labor, and manufacturing overhead. Read the reauirements Requirement 1. What is the curent total product cost (for the 25 milion units), including fixed and variable costs? Determine the formula, then calculate the current total product cost (for the 25 million units), including fixed and variable costs Total product costs million milion million Requirement 2. What is the current average product cost per unit? Determine the formula, then calculate the current average product cost per unit. (Enter your answer to the nearest cent.) Current average product cost per unit million million per unit Requirement 3. What is the current fixed cost per unit? Determine the formula, then calculate the current fixed cost per unit. (Enter your answer to the nearest cent.) Current foced cost per unit million million per unit ary Requirement 5. What is the forecasted average product cost next year? Determine the formula, then calculate the forecasted average product cost per unit. (Enter your answer to the nearest cent.) Forecasted average product cost per unit million million per unit Renuirement f 366-4 Requirement 6. What is the forecasted fixed cost per unit? Determine the formula, then calculate the forecasted fixed cost per unit. (Enter your answer to the nearest cent.) Forecasted fixed cost per unit million million per unit Requirement 7. Why does the average product cost decrease as production increases? The average product cost decreases as production volume increases because the company is over 10 milion more units. The company will be operating efficiently, so the average cost of making each unit decreases

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing A Risk Based Approach

Authors: Karla M Johnstone-Zehms, Audrey A. Gramling, Larry E. Rittenberg

12th Edition

035772187X, 978-0357721872

More Books

Students also viewed these Accounting questions