Question
Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 46,000 Rets per year. Costs
Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 46,000 Rets per year. Costs associated with this level of production and sales are given below: |
Unit | Total | ||||
Direct materials | $ | 25 | $ | 1,150,000 | |
Direct labor | 8 | 368,000 | |||
Variable manufacturing overhead | 3 | 138,000 | |||
Fixed manufacturing overhead | 7 | 322,000 | |||
Variable selling expense | 2 | 92,000 | |||
Fixed selling expense | 6 | 276,000 | |||
|
|
|
|
| |
Total cost | $ | 51 | $ | 2,346,000 | |
|
|
|
|
| |
|
The Rets normally sell for $56 each. Fixed manufacturing overhead is constant at $322,000 per year within the range of 38,000 through 46,000 Rets per year.
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started