A- Farah Corporation has provided the following production and total cost data for two levels of...
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A- Farah Corporation has provided the following production and total cost data for two levels of monthly production volume. The company produces a single product which it sells at $132.7 per unit Production volume Direct materials Direct labor Manufacturing overhead (Mixed) Fixed selling and administrative expenses 12,500 units 713,750 $ 256,250 $ 1,004,700 $ 14,000 units $ 799,400 $287,000 $ 1,027,350 $ 384,050 384,050 Required: Using high-low method and CVP analysis 1. Compute Farah's breakeven point in units and dollars. Prove your answer 2. Compute how many units the company needs to sell to eam a profit of $ 600,000. 3. Compute the selling price per unit of the company if BEP (units) is 40,000 units and the variable cost per unit and total fixed cost does not change. 4. Explain the various methods used to estimate the variable component and the fixed component of the mixed cost (Excluding Scattergraph method) and state which method is the most accurate? Why? B- You were given the following information related to AAA Company, the exclusive distributor for an automotive product: Total sales Direct labor cost Total selling and administrative expense $198,000 $23,760 $29.700 - Direct labor cost represents 30% of its total conversion cost and 40% of its total prime cost. - The only variable selling and administrative expense is a sales commission of 5% of sales. - The company maintains no beginning or ending inventories and its manufacturing overhead costs are entirely fixed costs. Required: Calculate the following: 1. The total manufacturing overhead cost. 2. The total direct materials cost. 3. The total manufacturing cost. 4. The total variable selling and administrative cost. 5. The total variable cost. 6. The total fixed cost. 7. The total contribution margin. C- "The traditional income statement format arranges the data in a way that allows management to more easily analyze how changes in production and sales will influence operating profit"Discuss the accuracy of this statement. A- Farah Corporation has provided the following production and total cost data for two levels of monthly production volume. The company produces a single product which it sells at $132.7 per unit Production volume Direct materials Direct labor Manufacturing overhead (Mixed) Fixed selling and administrative expenses 12,500 units 713,750 $ 256,250 $ 1,004,700 $ 14,000 units $ 799,400 $287,000 $ 1,027,350 $ 384,050 384,050 Required: Using high-low method and CVP analysis 1. Compute Farah's breakeven point in units and dollars. Prove your answer 2. Compute how many units the company needs to sell to eam a profit of $ 600,000. 3. Compute the selling price per unit of the company if BEP (units) is 40,000 units and the variable cost per unit and total fixed cost does not change. 4. Explain the various methods used to estimate the variable component and the fixed component of the mixed cost (Excluding Scattergraph method) and state which method is the most accurate? Why? B- You were given the following information related to AAA Company, the exclusive distributor for an automotive product: Total sales Direct labor cost Total selling and administrative expense $198,000 $23,760 $29.700 - Direct labor cost represents 30% of its total conversion cost and 40% of its total prime cost. - The only variable selling and administrative expense is a sales commission of 5% of sales. - The company maintains no beginning or ending inventories and its manufacturing overhead costs are entirely fixed costs. Required: Calculate the following: 1. The total manufacturing overhead cost. 2. The total direct materials cost. 3. The total manufacturing cost. 4. The total variable selling and administrative cost. 5. The total variable cost. 6. The total fixed cost. 7. The total contribution margin. C- "The traditional income statement format arranges the data in a way that allows management to more easily analyze how changes in production and sales will influence operating profit"Discuss the accuracy of this statement.
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A Farah Corporation 1 Compute Farah breakeven point in units and dollars Prove your answer High low method is one of the method of cost estimation Cost estimation method are only necessary when cost a... View the full answer
Related Book For
Fundamental Managerial Accounting Concepts
ISBN: 978-0078025655
7th edition
Authors: Thomas Edmonds, Christopher Edmonds, Bor-Yi Tsay, Philip Old
Posted Date:
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