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svetlana [45]
3 years ago
8

The following data pertains to activity and costs for two months:

Business
1 answer:
Irina-Kira [14]3 years ago
4 0

Answer:

The correct answer is D.

Explanation:

Giving the following information:

The following data pertains to activity and costs for two months:

June July

Activity level in units 10,000 12,000

Direct materials $ 16,000 $ ?

Fixed factory rent 12,000 ?

Manufacturing overhead 10,000 ?

Total cost $ 38,000 $ 42,900

First, we need to calculate the unitary variable cost of direct material and direct labor.

Unitary cost Direct material= 16,000/10,000= 1.6 per unit

Unitary cost Direct Labor= 12,000/10,000= 1.2 per unit

Now, we calculate the cost of the prime costs of 12,000 units:

Direct material= 1.6*12,000= 19,200

Direct labor= 1.2*12,000= 14,400

Total= $33,600

Manufacturing overhead= 42,900 - 33,600= $9,300

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The inventory data for an item for November are: Nov. 1 Inventory 20 units at $19 4 Sale 10 units 10 Purchase 30 units at $20 17
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=  $490

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<em>Under the </em><em>First-in-First-Out  </em>( FIFO ) <em>method of inventory valuation,  inventories are valued using the price of the earliest batch in stock until the batch is exhausted when the price of the next oldest batch is used and so on.</em>

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               20        (10 × $19)+( 10 × $20)                  390

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