Solution
|
January
|
February
|
|
Units produced and sold
|
16000
|
12800
|
|
Total costs:
|
|
Direct labor
|
$2,25,600.00
|
$ 1,80,480.00
|
|
Direct materials
|
$1,21,600.00
|
$ 97,280.00
|
|
Variable overhead costs
|
$ 92,800.00
|
$ 74,240.00
|
|
Factory rent
|
$1,40,000.00
|
$ 1,40,000.00
|
|
Sales commissions
|
$ 41,600.00
|
$ 33,280.00
|
|
Administrative salaries
|
$1,02,000.00
|
$ 1,02,000.00
|
|
Per unit costs for select rows:
|
|
Direct labor
|
$
14.10
|
$
14.10
|
|
Direct materials
|
$
7.60
|
$
7.60
|
|
Factory rent
|
$
8.75
|
$
10.94
|
|
Administrative salaries
|
$
6.38
|
$
7.97
|
Working
|
January
|
February
|
|
Units produced and sold
|
16000
|
12800
|
|
Total costs:
|
|
Direct labor
|
=180480/12800*16000
|
180480
|
|
Direct materials
|
=97280/12800*16000
|
97280
|
|
Variable overhead costs
|
=74240/12800*16000
|
74240
|
|
Factory rent
|
140000
|
140000
|
|
Sales commissions
|
=33280/12800*16000
|
33280
|
|
Administrative salaries
|
102000
|
102000
|
|
Per unit costs for select rows:
|
|
Direct labor
|
14.1
|
=180480/12800
|
|
Direct materials
|
7.6
|
=97280/12800
|
|
Factory rent
|
=140000/16000
|
=140000/12800
|
|
Administrative salaries
|
=102000/16000
|
=102000/12800
|
Fixed cost such as Administrative salaries and factory rent
remain same at all levels. Variable cost on the other hand will
increase with increase in units as variable cost per units remains
same but change in totality.
