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Micro-Fan Manufacturer produces one model of mini-fan that sells for $9 each. Direct labour workers are paid on an hourly basis and work only
Micro-Fan Manufacturer produces one model of mini-fan that sells for $9 each. Direct labour workers are paid on an hourly basis and work only when needed. "Other" manufacturing overhead costs do not vary with changes in production levels. During November, 50,000 fans were produced and sold, and the company incurred the following costs. Direct materials Direct labour Manufacturing overhead: $ 50,000 100,000 required Supervisor's salary Utilities Depreciation Other Selling and administration costs Advertising Sales commissions Administration 40,000 10,000 25,000 5,000 30,000 20,000 115,000 A. Prepare a traditional income statement with product costs categorized as cost of goods sold. B. Prepare a variable cost income statement with product costs separated into fixed and variable categories. C. The accountant at Micro-Fan wants to estimate costs for next year's operations and believes that fan sales will increase to 53,000 units. This volume of production is within current capacity levels. Prepare an estimate of total costs at that level of volume. (Hint:
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