Answered step by step
Verified Expert Solution
Question
...
1 Approved Answer
Xenon Corp makes a number of industrial products. The company estimates annual manufacturing overhead at $1,500,000, materials cost at $600,000 and labor costs at $1,000,000.
Xenon Corp makes a number of industrial products. The company estimates annual manufacturing overhead at $1,500,000, materials cost at $600,000 and labor costs at $1,000,000.
In addition, the company considers one-third of its manufacturing overhead to be variable.
Both variable and fixed manufacturing overhead is allocated using direct labor cost.
One of the products is a pump. It requires $12 in materials and $30 in labor. Each pump sells for $90.
- If pumps do not incur any variable selling or admin costs, what is the contribution margin per pump?
- What is the gross margin per pump?
- What is the inventoriable cost per pump using Variable Costing and using Absorption Costing?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started