Question
Williamson, Inc., manufactures digital voice recorders. During 2016, total costs associated with manufacturing 196,000 of the new EZ 9900 model (introduced this year) were as
Williamson, Inc., manufactures digital voice recorders. During 2016, total costs associated with manufacturing 196,000 of the new EZ 9900 model (introduced this year) were as follows: Raw materials $ 1,776,300 Direct labor 2,956,000 Variable manufacturing overhead 746,000 Fixed manufacturing overhead 704,500 Required: a. Calculate the cost per recorder under both variable costing and absorption costing. (Round your answers to 2 decimal places.) b. If 21,420 of these recorders were in finished goods inventory at the end of 2016, by how much and in what direction (higher or lower) would 2016 cost of goods sold be different under variable costing than under absorption costing? (Round your intermediate calculations to 2 decimal places and final answer to the whole number.) c-1. Express the digital voice recorder cost in a cost formula. (Round your answers to 2 decimal places.) c-2. What does this formula suggest the total cost of making an additional 1,750 recorders would be?
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