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Managerial Accounting: Q No.# 2. The following data were taken from the records of a company. Period 1 Period 2 Period 3 Production(units) 30,000 38000

Managerial Accounting:

Q No.# 2. The following data were taken from the records of a company.

Period 1 Period 2 Period 3

Production(units) 30,000 38000 27000

Sales 30,000 27000 38000

Opening stock 11,000

Closing stock ------ 11,000 -------

Per unit cost are as follows:

Direct material $ 1.5

Direct labor 1.0

Production overhead 3.0

Selling price per unit $ 9

Administrative overheads are fixed at $25000 and one third of the production overheads are fixed.

Required

Prepare separate income statements on full costing and variable costing

Q#3. HASF Corporation began operations at the beginning of the current year. one of the year company product a compressor sells for 370 per units information related to the current year activities follows

Variable cost per unit

Direct material 40

Direct labor 74

Manufacturing overhead 96

Annual fixed cost

Manufacturing cost 1,200,000

Selling and administrative 1,720,000

Sales and production

Sales in units 20,000

Production 24,000

Required -

Cost of the December 31 finished goods inventory

Net income for the current year Dec 31

If next year production decrease to 22,500 units and general cost behavior patterns do not change what is the likely effect on

  • The direct labor cost of 74 per units? why?
  • The fixed manufacturing overhead of 1,200,000? why?
  • The fixed selling and administrative cost of1,7200,000? why?
  • Per unit cost production why?

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