anufacturing's cost accountant has provided you with the following information for January operations. Direct materials $ 31 per unit Fixed manufacturing overhead costs $ 225,000 Sales price $ 205 per unit Variable manufacturing overhead $ 20 per unit Direct labor $ 34 per unit Fixed marketing and administrative costs $ 200,000 Units produced and sold 6,000 Variable marketing and administrative costs $ 8 per unit Required: a. Determine the variable cost per unit. b. Determine the variable manufacturing cost per unit. c. Determine the full absorption cost per unit. (Round your answer to 2 decimal places.) d. Determine the full cost per unit. (Round your answer to 2 decimal places.) e. Determine the profit margin per unit. (Round intermediate calculations and final answer to 2 decimal places.) f. Determine the gross margin per unit. (Round intermediate calculations and final answer to 2 decimal places.) g. Determine the contribution margin per unit.

Question

Business

Renee

20 November, 16:13

anufacturing's cost accountant has provided you with the following information for January operations. Direct materials $ 31 per unit Fixed manufacturing overhead costs $ 225,000 Sales price $ 205 per unit Variable manufacturing overhead $ 20 per unit Direct labor $ 34 per unit Fixed marketing and administrative costs $ 200,000 Units produced and sold 6,000 Variable marketing and administrative costs $ 8 per unit Required: a. Determine the variable cost per unit. b. Determine the variable manufacturing cost per unit. c. Determine the full absorption cost per unit. (Round your answer to 2 decimal places.) d. Determine the full cost per unit. (Round your answer to 2 decimal places.) e. Determine the profit margin per unit. (Round intermediate calculations and final answer to 2 decimal places.) f. Determine the gross margin per unit. (Round intermediate calculations and final answer to 2 decimal places.) g. Determine the contribution margin per unit.

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Answers (1)

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Andre Todd · Answer 1

Instructions are listed below.

Explanation:

Giving the following information:

Direct materials $ 31 per unit

Fixed manufacturing overhead costs $ 225,000

Sales price $ 205 per unit

Variable manufacturing overhead $20 per unit

Direct labor $ 34 per unit

Fixed marketing and administrative costs $ 200,000

Units produced and sold 6,000

Variable marketing and administrative costs $ 8

A) Total variable cost per unit = direct material + direct labor + variable overhead + variable marketing and administrative

Total variable cost per unit = 31 + 34 + 20 + 8 = $93

B) Variable manufacturing cost = direct material + direct labor + variable overhead = 31 + 34 + 20 = $85

C) Total absorption cost per unit = direct material + direct labor + total overhead = 31 + 34 + (225,000/6,000 + 20) = $122.5

D) Total unitary cost = total cost / Q

Total unitary cost = total variable cost + (fixed overhead + Fixed marketing and administrative costs) / Q = 93 + (225,000 + 200,000) / 6,000 = $163.83

E) Profit margin = selling price - total unitary cost = 205 - 163.83 = $41.17

F) Gross margin = selling price - unitary cost (absorption)

Gross margin = 205 - 122.5 = $82.5

G) Contribution margin per unit = selling price - unitary variable cost

CM per unit = 205 - 85 = $120