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Ch 18 Wiley Kimmel Quiz Homework

Ch 18 Wiley Kimmel Quiz Homework

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07/09/2013

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PCB Corporation has fixed costs of $480,000. It has a unit selling price of $6, unit variable cost of $4.50 and targetnet income of $1,500,000. Compute required sales in units to achieve its targeted net income.1320000 units
c
ontribution margin per unit is $1.50 ($6.00 - $4.50)Required sales in units =($480,000 + $1,500,000) ÷ $1.50 =
1,320,000
Mozena Corporation manufactures a single product. Monthly production costs incurred in the manufacturingprocess are shown below for the production of 3,000 units. The utilities and maintenance costs are mixedcosts. The fixed portions of these costs are $300 and $200, respectively.
Production in Units3,000
 
Production Costs
 Direct Materials$7,500Direct labor15,000Utilities1,800Property taxes1,000Indirect labor4,500Supervisory salaries1,800Maintenance1,100Depreciation2,400Correct. Identify the above costs as variable, fixed, or mixed. Put an "X" in the column which applies and the letter"O" if it does not.
(Please put an answer in each field, do not leave any fields blank.)
 
FixedVariableMixed
Direct Materialsoxo
 
 
Direct laboroxoUtilitiesooxProperty taxesxooIndirect laborxooSupervisory salariesxooMaintenanceooxDepreciationxoo
 
Correct. Calculate the expected costs when production is 5,000 units.$ 51700Fixed costs=$1,000 + $4,500 + $1,800 + $2,400 + $300 +$200=$10,200 Variable costs to produce 3,000 units=$7,500 + $15,000=22,500 Variable cost per unit=$22,500 ÷ 3,000 units=$7.5 per unit Variable cost portion of mixed cost=Total cost - Fixed portion Utilities:Variable cost to produce 3,000 units=$1,800 - $300=$1,500 Variable cost per unit=$1,500 ÷ 3,000 units=$.50 per unit Maintenance:Variable cost to produce 3,000 units=$1,100 - $200=$900 Variable cost per unit=$900 ÷ 3,000 units

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