Using Data Analytics to Analyze Data
DA12.1 Data analytics can be used to analyze product costs.
Santos Company began operations at the beginning of this year. It produces teak lounge chairs for luxury hotels and resorts. Demand for the chairs has been increasing steadily, and as a result the company has acquired more production space and equipment. The company has chosen practical capacity to allocated fixed overhead costs. Information concerning production and sales levels, unit selling prices and unit costs of the chairs is provided here.
					Unit	Total			Student Work Area
		Practical capacity production	10,560
		Unit sales		10,524				a. Variable and absorption costing manufacturing costs per unit
		Selling price		$310.00
		Direct materials cost	124.00				Variable costing unit cost
		Direct labor cost		66.50
		Variable manufacturing cost		$ 262,416			Absorption costing unit cost
		Fixed manufacturing costs		424,400
		Variable operating expenses		95,600
		Fixed operating expenses		105,100			b. Production costs
Instructions							Units	Variable Costing Unit Cost	Absorption Costing Unit Cost
There are three parts to this problem. Use Excel to perform the following:		9,000
	a.	Determine the manufacturing cost per unit using both variable and absorption costing based on the current production level.		9,200
			9,400
	b.	Determine the unit production costs at 9,000 to 13,000 production units in 200-unit increments.		9,600
			9,800
	c.	Describe the trend in both unit costs and why each unit cost behaves in this manner.		10,000
			10,200
									10,400
									10,600
									10,800
									11,000
									11,200
									11,400
									11,600
									11,800
									12,000
									12,200
									12,400
									12,600
									12,800
									13,000
									c. Response to part c