Abdurehman Ullah Khan (40931)

QUESTION: 01 (A)

REQUIREMENT: 01
ANSWER
Variable Cost Per Unit
Material 10.00
Labor (20/20) 1.00

Total 11.00

Total Fixed Cost

Manufacturing 10,000.00
Nonmanufacturing 10,000.00

Total Fixed Cost 20,000.00

REQUIREMENT: 02
ANSWER
Variable Cost Per Unit 11.00
Fixed Cost Per Unit (20000/15000) 1.33

Total Cost Per Unit 12.33

The company will suffer a loss if it sells below 12.33 per unit.
REQUIREMENT: 03
ANSWER
Variable Cost Per Unit 11.00
Fixed Cost Per Unit (20000/10000) 2.00

Total Cost Per Unit 13.00

The company will suffer a loss if it sells below 13 per unit

QUESTION: 01 (B).
ANSWER

ASF CORPORATION
STATEMENT OF COST OF GOODS MANUFACTURED
FOR THE YEAR ENDED DECEMBER 31, 2020

370,000 Direct Materials

360,000 Labor
270,000 Factory Overhead
1,000,000 Total Manufacturing Cost
120,000 Beginning Work In Process
(150,000) Ending Work In Process
970,000 Cost Of Goods Manufactured

EXPLANATION

Overhead = 1,000,000 * 27%

Overhead = 270,000
Labor = 270,000/75%
Labor = 360,000
Materials = 1,000,000 – 360,000 – 270,000
Materials = 370,000
Ending WIP = 1,000,000 – 970,000 – 30,000/20%
Ending WIP = 150,000
Beginning WIP = 150,000 * 80%
Beginning WIP = 120,000