Action Mopeds manufactures mopeds. The following information pertains to the company's normal operations per month: Output units
Question:
Action Mopeds manufactures mopeds. The following information pertains to the company's normal operations per month:
Output units | 15,000 mopeds |
Machine−hours | 4,000 hours |
Direct manufacturing labor hours | 5,000 hours |
Direct manufacturing labor per hour | $24 |
Direct materials per unit | $200 |
Variable manufacturing overhead costs | $322,500 |
Fixed costs: | |
Fixed manufacturing overhead costs | $1,200,000 |
Marketing and distribution costs | $1,125,000 |
Research and development costs | $900,000 |
1.What is the unit cost when establishing a long−run price for mopeds?
A. $325.48
B. $309.50
C. $484.50
D. $470.00
E. $444.50
2.What is the unit cost for establishing a minimum bid on a one−time−only special order of 1,000 mopeds from an overseas city if all cost relationships remain the same except for a one−time setup charge of $40,000?
A. $344.50
B. $285.50
C. $360.50
D. $269.50
E. $309.50
Financial Reporting and Analysis
ISBN: 978-1259722653
7th edition
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer