Question
The Colin Division of Sandhill Company sells its product for $31 per unit. Variable costs per unit include: manufacturing, $13; and selling and administrative, $2.
The Colin Division of Sandhill Company sells its product for $31 per unit. Variable costs per unit include: manufacturing, $13; and selling and administrative, $2. Fixed costs are: $420000 manufacturing overhead, and $50000 selling and administrative. There was no beginning inventory. Expected sales for next year are 60000 units. Anthony Walker, the manager of the Colin Division, is under pressure to improve the performance of the Division. As part of the planning process, he has to decide whether to produce 60000 units or 70000 units next year. What would the manufacturing cost per unit be under absorption costing for each alternative? 60000 units 70000 units
$13.00 $13.00
$15.00 $15.00
$19.00 $20.00
$20.00 $19.00
The Colin Division of Oriole Company sells its product for $35.00 per unit. Variable costs per unit include: manufacturing, $12.00; and selling and administrative, $2.00. Fixed costs are: $280000 manufacturing overhead, and $60000 selling and administrative. There was no beginning inventory. Expected sales for next year are 40000 units. William Brown, the manager of the Colin Division, is under pressure to improve the performance of the Division. As part of the planning process, he has to decide whether to produce 40000 units or 60000 units next year. What would the manufacturing cost per unit be under variable costing for each alternative? 40000 units 60000 units
$14.00 $14.00
$17.60 $19.00
$12.00 $12.00
$19.00 $17.60
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