We have been provided with the poduction cost for 13,000 units
so the The Product costs are as follows:
Amount Per Unit
| Description | Amount in $ | |
| Direct matelrial | 5.3 | |
| Direct labour | 2.8 | |
| Variable o.h | 1.4 | |
| Fixed Manufacturing O.H | 3.3 | |
| Fixed selling O.H. | 2.3 | |
| Fixed admin. Exp | 2.2 | |
| Sales comission | 1.2 | |
| Variable admin Exp. | 0.45 | |
| To make 13,000 units production cost is as follow |
||
| Description | Amount in $ | |
| Direct matelrial | 5.3 | |
| Direct labour | 2.8 | |
| Variable o.h | 1.4 | |
| Fixed Manufacturing O.H | 3.3 | |
| Total production cost | ||
| total amount of product costs incurred to make 12,000 units $166,400 | ||
| These are the period cost | ||
| Fixed selling O.H. | 2.3 | |
| Fixed admin. Exp | 2.2 | |
| Sales comission | 1.2 | |
| Variable admin Exp. | 0.45 | |
| Total period cost | ||
| Answer 1 | ||
| Total amount of production cost for 13,000 unit |
166400 | |
| Answer 2 | ||
| Total amount of period cost for 13,000 unit |
166400 | |
| Answer 3 | 11.15 | |
| If 11,000 units are sold then variable cost will be as follow | ||
| Direct matelrial | 5.3 | |
| Direct labour | 2.8 | |
| Variable o.h | 1.4 | |
| Sales comission | 1.20 | |
| Variable admin Exp. | 0.45 | |
| Total | 11.15 | |
| Answer 4 | 11.15 | |
| If 11,000 units are sold then variable cost will be as follow | ||
| Direct matelrial | 5.3 | |
| Direct labour | 2.8 | |
| Variable o.h | 1.4 | |
| Sales comission | 1.20 | |
| Variable admin Exp. | 0.45 | |
| Total | 11.15 | |
| Answer 5 | 11.45 | |
| If 11,000 units are sold then variable cost will be as follow | ||
| Direct matelrial | 5.3 | |
| Direct labour | 2.8 | |
| Variable o.h | 1.4 | |
| Sales comission (1.2*13,000/11000) | 1.42 | |
| Variable admin Exp.(0.45*13,000/11000) | 0.53 | |
| TOTAL | 11.45 | |
| Answer 6 | 11.03 | |
| If 11,000 units are sold then variable cost will be as follow | ||
| Direct matelrial | 5.3 | |
| Direct labour | 2.8 | |
| Variable o.h | 1.4 | |
| Sales comission (1.2*13,000/15500) | 1.01 | |
| Variable admin Exp.(0.45*13,000/15500) | 0.53 | |
| TOTAL | 11.03826979 | |
| Answer 7 | 3.9 | |
| If 11,000 units are sold then fIXED cost will be as follow | ||
| Fixed Manufacturing O.H (3.3*13000/11000 |
3.9 | |
| Answer 8 | 2.77 | |
| If 15500 units are sold then fIXED cost will be as follow | ||
| Fixed Manufacturing O.H (3.3*13000/11000 |
2.77 | |
| Answer 9 | 6.5 | |
| If 11,000 units are sold then fIXED cost will be as follow | ||
| Fixed Manufacturing O.H (3.3*13000/11000 |
3.9 | |
| Fixed admin. Exp (2.2*13000/11000 | 2.6 | |
| 6.5 | ||
| Answer 10 | 4.61 | |
| If 15,500 units are sold then fIXED cost will be as follow | ||
| Fixed Manufacturing O.H (3.3*13000/11000 |
2.77 | |
| Fixed admin. Exp (2.2*13000/11000 | 1.85 | |
| 4.61 | ||
| Answer 11 | 5.3 | |
| If 11,000 units are produced then Manu. O.h cost will be as follow | ||
| Fixed Manufacturing O.H (3.3*13000/11000 |
3.9 | |
| Variable o.h | 1.4 | |
| 5.3 | ||
| Answer 12 | 4.17 | |
| If 15,500 units are produced then Manu. O.h cost will be as follow | ||
| Fixed Manufacturing O.H (3.3*13000/11000 |
2.77 | |
| Variable o.h | 1.4 | |
| 4.17 | ||
| Answer 13 | ||
| If selling price 21.30 then contribution margin is as follow | ||
| Selling Price | 21.3 | |
| Less : | ||
| Direct matelrial | 5.3 | |
| Direct labour | 2.8 | |
| Variable o.h | 1.4 | |
| Fixed Manufacturing O.H | 3.3 | |
| Fixed selling O.H. | 2.3 | |
| Fixed admin. Exp | 2.2 | |
| Sales comission | 1.2 | |
| Variable admin Exp. | 0.45 | |
| 18.95 | ||
| Contribution Margin | 2.35 | |
