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kramer
3 years ago
6

Toys Unlimited has the following cost data available. Direct Materials are $99 per unit. Direct Labor is $55 per unit. Variable

Manufacturing Costs are $25 per unit. Fixed Manufacturing Costs are $200,000. Toys Unlimited sold 3,500 units. They produced 4,000 units. Using Absorption costing, what is the production cost per unit?a. $154b. $179c. $229d. $236
Business
1 answer:
miv72 [106K]3 years ago
6 0

Answer:

c. $229

Explanation:

To compute the total absorption cost per unit we do the following,

Absorption of fixed costs = Fixed costs / units produced

Absorption cost = 200,000 / 4000 = $50/unit

Total cost of each individual unit = 99 + 55 + 25 + 50 = $229

This includes direct material, direct labor, manufacturing overhead and the fixed absorption cost.

With absorption costing we take all the goods produced in a period as denominator for the Fixed costs.

Hope that helps.

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Answer:

Incremental net income from further processing is  $566,600

Explanation:

First of all, it would be necessary to compute profit from selling the product at cut off point and profit when it is further processed in order to determine whether or not it is worth processing further:

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cost of production(19,000*$25)            $475,000

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Further processing:

sales revenue

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cost of production                              ($475,000)

cost of further processing                 ($200,000)

total costs                                           ($675,000)

Profit                                                    $491600

By further processing the incremental net profit is $566,600 ($491,600-(-$75000)

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When manufacturing overhead costs are assigned to production in a process cost system, it means that
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Answer:

<em>When manufacturing overhead costs are assigned to production in a process cost system, it means that the business uses absorption costing system.</em>

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