Question

Terracotta, Inc., provides you with the following data for their single product:
Sales price per unit................................................................................ $ 25
Fixed costs (per month):
Selling, general, and administrative (SG&A) unit................................ 300,000
Manufacturing overhead....................................................................... 1,050,000
Variable costs (per unit):
Direct labor............................................................................................ 4
Direct materials ..................................................................................... 6
Manufacturing overhead....................................................................... 5
SG&A.................................................................................................... 3
Number of units produced per month...................................................300,000 units

Required
Give the amounts for each of the following:
a. Prime cost per unit.
b. Contribution margin per unit.
c. Gross margin per unit.
d. Conversion cost per unit.
e. Variable cost per unit.
f. Full absorption cost per unit.
g. Variable production cost per unit.
h. Full cost per unit.
i. Suppose the number of units increases to 400,000 units per month, which is within the relevant range, which of amounts (a) through (h) will change. For each that will change, give the new amount for a volume of 400,000 units.



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  • CreatedDecember 18, 2013
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