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Trio Company reports the following information for the current year, which is its first year of operations. Assume instead that Trio Company uses variable costing
Trio Company reports the following information for the current year, which is its first year of operations. Assume instead that Trio Company uses variable costing (Round intermediate calculations and final answers to two decimal places.) Direct materials Direct labor Overhead costs for the year Variable overhead Fixed overhead Units produced this year Units sold this year Ending finished goods inventory in units $ 10.00 per unit $ 11.00 per unit $ 6.00 per unit $ 270,000 per year 33,000 units 25,000 units 3,000 units 1. Compute the product cost per unit using variable costing. Cost per unit of finished goods using: Variable costing Cost per unit of finished goods 2. Determine the cost of ending finished goods Inventory using variable costing. Cost per unit of finished goods using: Variable costing Number of units in finished goods Total cost of finished goods inventory 3. Determine the cost of goods sold using variable costing. Cost per unit of goods sold using: Variable costing Number of units in sold goods Total cost of sold goods Grand Garden is a luxury hotel with 160 suites. Its regular sulte rate is $220 per night per suite. The hotel's cost per night is $145 per suite and consists of the following Variable direct labor and materials cost Fixed cost [(55,870,000/160 suites) + 365 days) Total cost per night per suite 5 44 101 $ 145 The hotel manager receives an offer to hold the local Bikers Club annual meeting at the hotel in March, which is the hotel's low season with an occupancy rate of under 60%. The Bikers' Club would reserve 50 suites for three nights if the hotel could offer a 60% discount, or a rate of 588 per night. The hotel manager is inclined to reject the offer because the cost per suite per night is $145. Prepare an analysis of this offer for the hotel manager. Should the offer from the Bikers' Club should be accepted or rejected? What is the contribution margin from accepting the offer? Contribution margin analysis
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