1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
lana [24]
3 years ago
11

The Dorilane Company specializes in producing a set of wood patio furniture consisting of a table and four chairs. The set enjoy

s great popularity, and the company has ample orders to keep production going at its full capacity of 2,000 sets per year. Annual cost data at full capacity follow:
Direct labor $ 118,000
Advertising $ 50,000
Factory supervision $ 40,000
Property taxes, factory building $ 3,500
Sales commissions $ 80,000
Insurance, factory $ 2,500
Depreciation, administrative office equipment$4,000
Lease cost, factory equipment $ 12,000
Indirect materials, factory $ 6,000
Depreciation, factory building $ 10,000
Administrative office supplies (billing) $ 3,000
Administrative office salaries $ 60,000
Direct materials used (wood, bolts, etc.) $ 94,000
Utilities, factory $ 20,000
Required:
1. Enter the dollar amount of each cost item under the appropriate headings. Note that each cost item is classified in two ways: first, as variable or fixed with respect to the number of units produced and sold; and second, as a selling and administrative cost or a product cost. (If the item is a product cost, it should also be classified as either direct or indirect.)
Cost Behavior
Selling or Administrative
Product Cost
Cost Item
Variable Fixed Cost Direct Indirect Direct labor$118,000$118,000Advertising50,00050,000Factory supervisionProperty taxes, factory buildingSales commissionsInsurance, factoryDepreciation, administrative office equipmentLease cost, factory equipmentIndirect materials, factoryDepreciation, factory buildingAdministrative office supplies (billing)Administrative office salariesDirect materials used (wood, bolts, etc.)Utilities, factoryTotal costs$118,000
2. Compute the average product cost of one patio set.
Average product cost per set = ????
3. Assume that production drops to only 1,000 sets annually. Would you expect the average product cost per set to increase, decrease, or remain unchanged?
Increase
Decrease
Remain unchanged
Business
1 answer:
marin [14]3 years ago
3 0

Answer:

1.COST BEHAVIOUR

Variable Fixed

$321,000 $182,000

SELLING OR ADMINISTRATIVE

Cost $197,000

PRODUCT COST

Direct Indirect

$212,000 $94,000

2. $153 per set

3. I would expect the average product cost per set to increase.

Explanation:

1. Calculation to Enter the dollar amount of each cost item under the appropriate headings

COST BEHAVIOUR

VARIABLE FIXED

Direct labor $118,000 $0

Advertising $0 $50,000

Factory supervision $0 $40,000

Property taxes, factory building$0 $3,500

Sales commissions$80,000 $0

Insurance, factory $0 $2,500

Depreciation, administrative office equipment$0 $4,000

Lease cost, factory equipment$0 $12,000

Indirect materials, factory $6,000 $0

Depreciation, factory building $0 $10,000

Administrative office supplies (billing) $3,000 $0

Administrative office salaries $0 $60,000

Direct materials used (wood, bolts, etc.)$94,000 $0

Utilities, factory $20,000 $0

TOTAL COSTS $321,000 $182,000

SELLING OR ADMINISTRATIVE

COST

Direct labor $0

Advertising $50,000

Factory supervision $0

Property taxes, factory building $0

Sales commissions $80,000

Insurance, factory $0

Depreciation, administrative office equipment $4,000

Lease cost, factory equipment $0

Indirect materials, factory $0

Depreciation, factory building $0

Administrative office supplies (billing) $3,000

Administrative office salaries$60,000

Direct materials used (wood, bolts, etc.) $0

Utilities, factory $0

TOTAL COSTS $197,000

PRODUCT COST

DIRECT INDIRECT

Direct labor $118,000 $0

Advertising $0 $0

Factory supervision $0 $40,000

Property taxes, factory building$0 $3,500

Sales commissions $0 $0

Insurance, factory $0 $2,500

Depreciation, administrative office equipment $0 $0

Lease cost, factory equipment$0 $12,000

Indirect materials, factory$0 $6,000

Depreciation, factory building $0 $10,000

Administrative office supplies (billing) $0 $0

Administrative office salaries $0 $0

Direct materials used (wood, bolts, etc.)$94,000 $0

Utilities, factory$0 $20,000

TOTAL COSTS $212,000 $94,000

Therefore the dollar amount of each cost item under the appropriate headings will be :

COST BEHAVIOUR

Variable Fixed

$321,000 $182,000

SELLING OR ADMINISTRATIVE

Cost $197,000

PRODUCT COST

Direct Indirect

$212,000 $94,000

2. Computation to determine the average product cost of one patio set.

Using this formula

Average product cost of one patio set =(Direct costs +Indirect costs)/Capacity set per year

Let plug in the formula

Average product cost of one patio set=($212,000+$94,000)/2,000 sets

Average product cost of one patio set =$306,000/2,000 sets

Average product cost of one patio set = $153 per set

Therefore The Average product cost of one patio set will be $153 per set

3. In a situation were the production drops I Would expect the average product cost per set to INCREASE, reason been that the fixed costs would extend over few units which will inturn cause the average cost per unit to increase.

You might be interested in
Michael Barry, Attorney, P.C. began the year with total assets of $126,000, liabilities of $74,000, and stockholders’ equity of
goldenfox [79]

Answer:

The expenses can be recorded as follows;

Debit to the expenses of $33,000 and a credit to the cash account of $33,000.

Explanation:

The accounting equation is an equation that tends to balance a company's assets on one side and the sum of its liabilities and shareholders equity on the opposite side of the equation. It form the basis for the double-entry system in accounting that includes an accounts debit and credit. The debit is a sum to an amount that is owed, it is usually listed on the left hand-side of an account while the credit is a listing of a sum that is received usually on the right hand side of an account.

In the case of Michael Barry, the accounting equation;

Assets=liabilities+stockholders equity

Assets=$126,000

Liabilities=$74,000

Stockholders equity=$52,000

liabilities+stockholders equity=74,000+52,000=$126,000

The assets equals the sum of the liabilities and stockholders equity.

To record expenses paid of $33,000;

                            Debit           Credit

Expenses          $33,000

Cash                                       $33,000

3 0
3 years ago
Suppose that you have received $300 as a birthday gift. You can spend it today or you can put the money in a bank account for a
Bingel [31]
After one year you will be able to get 305 extra dollars then what you have put in hope this helps you
6 0
3 years ago
Emma's property is assessed at $650,000. her property qualified for a $50,000 homestead tax exemption and was appraised at $800,
Rama09 [41]
Emma's taxable property value should be $600,000 since her taxes will be based on the assessment not the appraisal and also because she gets the $50,000 tax reduction so therefore to reiterate she will be taxed on only the $600,000.
6 0
3 years ago
At which point in the residential selling process does the real estate professional prepare a comparative market analysis?
mash [69]

Real estate attorney is the point in the residential selling process does the real estate professional prepare a comparative market analysis.

Real estate is property that consists of land and buildings on it, as well as natural resources such as crops, minerals and water. real property of this kind; a related interest in property, buildings, or dwellings in general;

Property is private property in the form of buildings or land. Property can be for residential, commercial or industrial use and includes any land-based resource such as water or minerals.

Real estate is generally a great investment opportunity. It can generate ongoing passive income and can be an excellent long-term investment if the value increases over time. It can also be used as part of an overall strategy to start building wealth.

Learn more about real estate here:brainly.com/question/5053499
#SPJ4

3 0
2 years ago
Suppose two firms are in a game​ situation, and they each must decide on a strategy regarding whether to select a high price or
swat32

Answer: Both to select low prices.

Explanation:

One of the vital goal of doing business is profit irrespective of the firm. Every business has to deal with funds and when funds is involved profit has to be made even while serving the client in satisfying conditions. The profit enables the firm to be ran smoothly; it's operations and have a reason to be said that their in business. Every firm ooks out for opportunities to make rofit while giving their best. According to the paragraph profits are high when the price of the commodity is reduced, each firm will reduce it's pricing to ensure they make profit.

4 0
3 years ago
Other questions:
  • Suppose winston's annual salary as an accountant is $60,000, and his financial assets generate $4,000 per year in interest. one
    8·1 answer
  • Suppose you are building a scatter plot in Excel for a large amount of data. After selecting the scatter plot option, how do you
    11·1 answer
  • 1. Explaining Why does a natural disaster (drought, flood) in an agricultural
    12·1 answer
  • Your aunt is about to retire, and she wants to sell some of her stock and buy an annuity that will provide her with income of $5
    15·1 answer
  • A human service worker has to get a plan of action for a juvenile offender she discovers you skipped a couple of counseling sess
    12·1 answer
  • Money market mutual funds invest in a. corporate stock. b. federal government Treasury bonds. c. corporate bonds. d. federal gov
    12·1 answer
  • Managerial economist estimates the price-quantity relationship for Textile Company to be p= 40-4q a. At what output rate demand
    11·1 answer
  • I need help with a class on e2020 the class is College and Career readiness need help fast ​
    5·1 answer
  • Under the Federal Insurance Contributions Act, where do the funds for Social
    13·1 answer
  • You are the General Manager of a US owned plant located in Northern Mexico. The firm manufactures semiconductors and uses tempor
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!