Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Suppose that you have been given a summer job as an intern at Balerio Corporation, a company that manufactures plastic toys. Your manager asked

image text in transcribed

Suppose that you have been given a summer job as an intern at Balerio Corporation, a company that manufactures plastic toys. Your manager asked you to help perform product cost and contribution margin analysis. Balerio Corporation's relevant range of activity is 6,000 units to 10,000 units. When it produces and sells 8,000 units, its average costs per unit are as follows: Average Cost per Unit Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense Required: $ 6.40 $ 3.00 $ 1.30 $ 13.20 $ 2.20 $ 1.60 $ 0.60 $ 0.50 a. For financial reporting purposes, what is the total amount of product costs incurred to make 8,000 units? (Do not round intermediate calculations.) b. If 9,000 units are sold, what is the variable cost per unit sold? (Round "Per unit" answer to 2 decimal places.) c. If 9,000 units are sold, what is the total amount of variable costs related to the units sold? (Do not round intermediate calculations. Round "Per unit" answer to 2 decimal places.) d. If the selling price is $18.00 per unit, what is the contribution margin per unit sold? (Round "Per unit" answer to 2 decimal places.) e. What incremental manufacturing cost will the company incur if it increases production from 8,000 to 8,001 units? (Round "Per unit" answer to 2 decimal places.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cost Accounting Foundations and Evolutions

Authors: Michael R. Kinney, Cecily A. Raiborn

9th edition

9781285401072, 1111971722, 1285401077, 978-1111971724

More Books

Students also viewed these Accounting questions

Question

=+a) What assumptions and/or conditions are violated by this model?

Answered: 1 week ago

Question

1. How did the group come up with a plan?

Answered: 1 week ago