Mason Corporation began operations at the beginning of the current year. One of the company's products, a refrigeration element, sells for $185 per unit. Information related to the current year's activities follows. Variable costs per unit Direct material. Direct labor. Manufacturing overhead Annual fixed costs Manufacturing overhead. Selling and administrative. Production and Sales actity: Production (units)... Sales (units). **** **** ww b. The fixed manufacturing overhead cost of $600,000? Why? c. The fixed selling and administrative cost of $860,000? Why? d. The average unit cost of production? Why? $ 20 37 48 $600,000 860,000 24,000 20,000 Mason carries its finished-goods inventory at the average unit cost of production and is subject to a 30 percent income tax rate. There was no work in process at year-end. Required: 1. Determine the cost of the December 31 finished-goods inventory. 2. Compute Mason's net income for the current year ended December 31. 3. If next year's production decreases to 23,000 units and general cost behavior patterns do not change, what is the likely effect on: a. The direct-labor cost of $37 per unit? Why?

Mason Corporation began operations at the beginning of the curreat year. One of the company's prodocts, Varlable costs per int: Deac natertal Dratlitor. Naviaduring ovetead. Anvalfed costs Merviacturing ovehead s x 3) Seling and adrinistake tyonsos Froducton and Sales activy. 3200000 Procuttoninits. Saes pintis. Mason carries its finished-goods inventory at the aerage unit cost of prodaction and is subject to a 30 percent income tax rale. There was no werk in proess at jear-end. Required: 1. Determine the cost of the December 31 finished-goods innenlory. 2. Compute Mason's net income for the current year ended December 31. 3. If nat year's production decreases to 23,000 units and general cost behavior patterns do not change, what is the likely effert on: a. The direct-laber cost of $37 per unit? Why? b. The fired manufacturing overtead cost of $600,0009 Why? c. The fuxed selling and administrative cost of $860,000 ? Why? d. The averaye unil cost of production? Why