In 20X1, its first year of operations, Horn Gren, Inc., manufactured 110,000 units of its single...

 

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In 20X1, its first year of operations, Horn Gren, Inc., manufactured 110,000 units of its single product, ties. Variable manufacturing costs were $6 per unit of product. Fixed manufacturing costs were $110,000 and are based on the production volume of 110,000 units. Horn Gren sold 100,000 ties during the year at an average selling price of $10. Variable selling costs were $50 per tie and fixed selling and administrative costs were $80,000. Horn Gren's operating income using the absorption approach is approach is A. $300,000; $200,000 B. $200,000; $300,000 C. $170,000; $160,000 D. $160,000; $170,000 ; using the contribution margin Chevren Company drills for oil, and delivers it to refining companies. Currently it is selling its crude oil at $20/barrel. Chevren has been asked to refine the oil for commercial use. For a standard of refined oil, Chevren will be paid $30/barrel. Chevren estimates that the additional labor and refining cost involved in further processing of a barrel of oil is$6/barrel. Chevren Company should А. continue selling crude oil at $20/barrel sell refined oil for an increased profit of В. $4/barrel С. $21/gallon sell the super crude oil to another company for D. do none of these In 20X1, its first year of operations, Horn Gren, Inc., manufactured 110,000 units of its single product, ties. Variable manufacturing costs were $6 per unit of product. Fixed manufacturing costs were $110,000 and are based on the production volume of 110,000 units. Horn Gren sold 100,000 ties during the year at an average selling price of $10. Variable selling costs were $50 per tie and fixed selling and administrative costs were $80,000. Horn Gren's operating income using the absorption approach is approach is A. $300,000; $200,000 B. $200,000; $300,000 C. $170,000; $160,000 D. $160,000; $170,000 ; using the contribution margin Chevren Company drills for oil, and delivers it to refining companies. Currently it is selling its crude oil at $20/barrel. Chevren has been asked to refine the oil for commercial use. For a standard of refined oil, Chevren will be paid $30/barrel. Chevren estimates that the additional labor and refining cost involved in further processing of a barrel of oil is$6/barrel. Chevren Company should А. continue selling crude oil at $20/barrel sell refined oil for an increased profit of В. $4/barrel С. $21/gallon sell the super crude oil to another company for D. do none of these

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