Question11

Aday Restaurant Supply produced 300,000 pots and pans last year, and incurred the following costs:

Produced300,000.00TVCTFCDIRECT MATERIALS$80,000$80,000$-LABOR COTS$120,000$96,000$24,000INDIRECT MATERIALS$40,000$24,000$16,000ADMINISTRATIVE COSTS$40,000$-$40,000OTHER FIXED COSTS$30,000$-$30,000TOTAL COSTS$310,000$200,000$110,000

The management has decided the following:

1.All of Direct Materials will be considered Variable Costs

2.80% of Labor Costs will be classified as VC and 20% as FC.

3.40% of Indirect Materials will be classified as FC and 60% as VC.

4.All of Administrative Costs and Other Fixed Costs will be considered as FC.

Using the above information, calculate:

TOTAL UNIT COST

Select one:

a.$0.67

b.$0.37

c.$0.44

d.$1.04

Question12

Aday Restaurant Supply produced 300,000 pots and pans last year, and incurred the following costs:

Produced300,000.00TVCTFCDIRECT MATERIALS$80,000$80,000$-LABOR COTS$120,000$96,000$24,000INDIRECT MATERIALS$40,000$24,000$16,000ADMINISTRATIVE COSTS$40,000$-$40,000OTHER FIXED COSTS$30,000$-$30,000TOTAL COSTS$310,000$200,000$110,000

The management has decided the following:

1.All of Direct Materials will be considered Variable Costs

2.80% of Labor Costs will be classified as VC and 20% as FC.

3.40% of Indirect Materials will be classified as FC and 60% as VC.

4.All of Administrative Costs and Other Fixed Costs will be considered as FC.

Using the above information, calculate:

If production dropped to 250,000 units, the total unit cost of producing 1 unit will go:

Select one:

a.Go Down

b.Go Up

c.Be Negative

d.Stay Same