ISE 304-Assignment 1/183 This assignment is due on 30/06/2019 at the beginning of the class This is a group assignment; each group should include two students. Late submission is not acceptable. 38. LO.2 (Cost behavior) PlumView Printers makes stationery sets of 100 percent rag content edged in 24 karat gold. In an average month, the firm produces 8o,000 boxes of stationery; cach box contains 100 pages of stationery and 80 envelopes. Production costs are incurred for paper, ink,, gluc, and boxes. The company manufactures this product in batches of 500 boxes of a specific stationery design. The following data have been extracted from the company's accounting reconds for June 2013 Cost of paper for each batch Cost of ink and glue for each batch Cost of 1,000 gold boxes for each batch Direct labor for producing each batch Cost of designing each batch $10,000 1,000 32,000 16,000 20,000 Overhead charges total $408,000 per month and are considered fully fixed for pur- poses of cost estimation a. What is the cost per box of stationery based on average production volume b. If sales volume increases to 120,000 boxes per month, what will be the cost per box (assuming that cost behavior patterns remain the same as in June)? c. If sales volume increases to 120,000 boxes per month but the firm does not want the cost per box to exceed its current level [based on (a)], what amount can the company pay for design costs, assuming all other costs are the same as June levels d. Assume that PlumView Printers is now able to sell, on average, each box of station- ery at a price of $195. If the company is able to increase its volume to 120,000 boxes per month, what sales price per box will generate the same per-unit gross mar- gin that the firm is now achieving on 80,000 boxes per month c. Would it be possible to lower total costs by producing more boxes per batch, even if the total volume of 80,000 is maintained? Explain 52. LO.7 (CGM; CGS) Flex-Em began business in July 2013. The firm makes an exercise machine for home and gym use. Following are data taken from the firm's accounting records that pertain to its first month of operations $ 900,000 377,000 126,800 40,600 6,000 17,800 230,300 Direct material purchased on account Direct material issued to production Direct labor payroll accrued Indirect labor payroll paid Factory insurance expired Factory utilities paid Factory depreciation recorded Ending work in process inventory Ending finished goods inventory (30 units) Sales on account ($5,200 per unit) 51,000 97,500 1,040,000 a. How many units did the company sell in July 2013 b. Prepare a schedule of cost of goods manufactured for July 2013. c. How many units were completed in July? d. What was the per-unit cost of goods manufactured for the month c. What was the cost of goods sold in the first month of operations fWhat was the gross margin for July 2013
