Question: 10 Topeka Company has a single product called Topek. The company normally produces and sells 80,0001 ch year. The company's unit costs at this level
10 Topeka Company has a single product called Topek. The company normally produces and sells 80,0001 ch year. The company's unit costs at this level of activity are given below Variable manufacturing cost Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Total cost per unit $28.30 5.00 1.70 4.50 39.50 %24 One of the materials used in the production of Topeks is obtained from a foreign supplier. Civil unrest supplier's country has caused a cutoff in material shipments that is expected to last for one year. Topek Company has enough material on hand to operate at 50% of normal levels for one year. As an aleme company could close the plant down entirely for one year. Closing the plant would reduce fixed manu overhead costs by 30% and the fixed selling expenses would continue at two-thirds of their normal the one-year period. What is the selling price per unit of Topek that would make the company indifferent between 0 sle plant and (ii) not closing the plant for one year? $30.00 A. B. $34.30 $36.00 D. $52.50 E. None of the above C. I All differences between super-variable costing and absorption costing are explained to A. the accounting for direct labor and manufacturing overhead costs B. the accounting for direct labor and direct materials. C. the accounting for manufacturing overhead costs
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