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Required information [The following information applies to the questions displayed below] Mason Corporation began operations at the beginning of the current year. One of
Required information [The following information applies to the questions displayed below] 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 costsi Manufacturing overhead Selling and administrative Production and sales activity: Production (units) Sales (units) 35 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. 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 $35 per unit? O No change O Increase O Decrease
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