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Temka [501]
3 years ago
15

Swisher, Incorporated reports the following annual cost data for its single product: Normal production level 30,000 units Direct

materials $ 6.40 per unit Direct labor $ 3.93 per unit Variable overhead $ 5.80 per unit Fixed overhead $ 150,000 in total This product is normally sold for $48 per unit. If Swisher increases its production to 50,000 units, while sales remain at the current 30,000 unit level, by how much would the company's income increase or decrease under absorption costing?
Business
1 answer:
wlad13 [49]3 years ago
4 0

Answer:

Profit decreases by $322,600

Explanation:

Normal production level = 30,000 units

Cost of direct material per unit =$6.40 , total cost = $6.40*30,000=$192,000

Cost of direct labor per unit =$3.93 , total cost =$3.93*30,000=$117,900

Variable over head cost per unit=$5.80, total cost =$5.80*30,000=$174000

Fixed overhead total cost = $150,000

Production cost with 30,000 units will be;

$192,000 + $117,900 + $174000 + $150,000 =$633900

Normal selling price of product  per unit = $48

Revenue after normal sell of 30,000 units $48 = 30,000*48=$1440000

Profit obtained : $806,100

Increasing the production to 50,000 units you can calculate the projected cost of production

New production level = 50,000 units

Cost of direct material per unit =$6.40 , total cost = $6.40*50,000=$320,000

Cost of direct labor per unit =$3.93 , total cost =$3.93*50,000=$196,500

Variable over head cost per unit=$5.80, total cost =$5.80*50,000=$290,000

Fixed overhead total cost = $150,000

Production cost with 30,000 units will be;

$320,000 + $196,500 + $290,000 + $150,000 =$956,500

Normal selling price of product  per unit = $48

Revenue after normal sell of 30,000 units $48 = 30,000*48=$1440000

Profit obtained =$483,500

Decreased in profit = $806100-$483500 =$322,600

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liberstina [14]

Answer:

Total budgeted manufacturing cost = $824,000

Explanation:

The total budgeted manufacturing cost is the sum of the variable  and fixed manufacturing cost

The fixed manufacturing cost of $30,000 would be absorbed (i.e charged to the units produced using overhead absorption rate (OAR).

OAR = Budgeted fixed manufacturing cost / Budgeted production squares

      = $30,000 /  50,000 squares = $0.6 per square

Absorbed fixed manufacturing cost= OAR × actual production of squares

Absorbed fixed manufacturing cost=  $0.6 × 40,000 = $24,000

Variable manufacturing cost = $20.00 × 40,000 =800,000

Total budgeted manufacturing cost = $24,000  + $800,000  = $824,000

Total budgeted manufacturing cost = $824,000

5 0
3 years ago
Selected financial information for Thornton Company for 2019 follows: Sales $ 2,000,000 Cost of goods sold 1,400,000 Merchandise
frutty [35]

Answer:

7.80 times

Explanation:

First of all we have to calculate the average inventory

Opening inventory= 159,000

Closing inventory= 200,000

Average inventory= (opening inventory+closing inventory)/2

= ( 159,000+200,000)/2

= 359,000/2

= 179,500

The next step is to find the merchandise inventory turnover which is calculated as

= Cost of goods/ Average inventory

Cost of goods= $1,400,000

Average inventory= 179,500

= 1,400,000/179,500

= 7.799 times

= 7.80 times (to 2 decimal places)

Hence the merchandise inventory was turned over 7.80 times in 2019

7 0
3 years ago
Read 2 more answers
Rochelle, the CEO of a Fortune 500 company, met with business leaders fromthe local community. Afterwards, she spent time inform
snow_lady [41]

Option D

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<u>Explanation:</u>

Figurehead belongs to a character with meaningless leadership of industry but no exact power. The word figurehead is a personality with the trappings of control but not its practice.

Figurehead – As an administrator, have convivial, ritual and constitutional duties. That personality is presumed to be an origin of notion. Characters view to that one as a character with power, and as a figurehead. Figureheads steward their trios. If one requires to change or create trust in this section, begin with perception, performance, and reliability.

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3 years ago
Brain Wing Inc. has won the bid to build airplanes for a host country government. However, the execution of the contract has bee
Anika [276]

Answer:

D. speed money.

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7 0
2 years ago
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julsineya [31]

Answer:

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2. A count of supplies shows $1,140 of unused supplies on May 31.

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Dr Depreciation expense 240

    Cr Accumulated depreciation, equipment 190

4. The mortgage interest rate is 6%. (The mortgage was taken out on May 1.)

Dr Interest expense 168

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5. Unearned rent of $2,510 has been earned.

Dr unearned revenue 2,510

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6. Salaries of $880 are accrued and unpaid at May 31.

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6 0
2 years ago
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