Question
Williamson, Inc., manufactures digital voice recorders. During 2013, total costs associated with manufacturing 32,000 of the new EZ 9900 model (introduced this year) were as
Williamson, Inc., manufactures digital voice recorders. During 2013, total costs associated with manufacturing 32,000 of the new EZ 9900 model (introduced this year) were as follows:
Raw materials | $ | 275,000 | |
Direct labor | 454,000 | ||
Variable manufacturing overhead | 115,200 | ||
Fixed manufacturing overhead | 108,800 |
A: Calculate the cost per recorder under both variable costing and absorption costing
b. If 4,200 of these recorders were in finished goods inventory at the end of 2013, what would be the difference in cost under variable costing than under absorption costing?
Total Fixed Cost Associated with ending inventory=
C. Express the digital voice recorder cost in a cost formula.
D. What does this formula suggest the total cost of making an additional 500 recorders would be?
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