Williamson, Inc., manufactures digital voice recorders. During 2016, total costs associated with manufacturing 202,500 of the new
Question:
Williamson, Inc., manufactures digital voice recorders. During 2016, total costs associated with manufacturing 202,500 of the new EZ 9900 model (introduced this year) were as follows:
Raw materials | $ | 1,780,200 | |
Direct labor | 2,959,800 | ||
Variable manufacturing overhead | 752,200 | ||
Fixed manufacturing overhead | 706,900 | ||
Required:
a. Calculate the cost per recorder under both variable costing and absorption costing. (Round your answers to 2 decimal places.)
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b. If 20,230 of these recorders were in finished goods inventory at the end of 2016, by how much and in what direction (higher or lower) would 2016 cost of goods sold and operating income be different under variable costing than under absorption costing? (Round your intermediate calculations to 2 decimal places and final answer to the whole number.)
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c-1. Express the digital voice recorder cost in a cost formula. (Round your answers to 2 decimal places.)
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c-2. What does this formula suggest the total cost of making an additional 1,750 recorders would be?
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Accounting What the Numbers Mean
ISBN: 978-0078025297
10th edition
Authors: David H. Marshall, Wayne W. McManus, Daniel F. Viele