Friday Night, Inc. manufactures high-quality 5-liter boxes of wine which it sells for $14 per...
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Friday Night, Inc. manufactures high-quality 5-liter boxes of wine which it sells for $14 per box. Below is some information related to Friday Night's capacity and budgeted fixed manufacturing costs for 2019: Budgeted Fixed Days of Hours of Denominator-Level Manufacturing Production Production Boxes Capacity Concept Overhead per Period per Period per Day per Hour Theoretical capacity $4,000,000 362 22 300 Practical capacity $4,000,000 310 16 250 Normal capacity $4,000,000 310 16 175 Master budget capacity $4,000,000 310 16 200 Production during 2019 was 990,000 boxes of wine, with 15,000 remaining in ending inventory at 12/31/19. Actual variable manufacturing costs were $1,762,200 (there are no variable cost variances). Actual fixed manufacturing overhead costs were $4,000,000, the same as budgeted. What is the total cost per unit (box of wine) when practical capacity is used? a. $3.45 b. $5.01 c. $5.81 d. $6.39
Friday Night, Inc. manufactures high-quality 5-liter boxes of wine which it sells for $14 per box. Below is some information related to Friday Night's capacity and budgeted fixed manufacturing costs for 2019:
Budgeted Fixed Days of Hours of
Denominator-Level Manufacturing Production Production Boxes
Capacity Concept Overhead per Period per Period per Day per Hour
Theoretical capacity $4,000,000 362 22 300
Practical capacity $4,000,000 310 16 250
Normal capacity $4,000,000 310 16 175
Master budget capacity $4,000,000 310 16 200
Production during 2019 was 990,000 boxes of wine, with 15,000 remaining in ending inventory at 12/31/19. Actual variable manufacturing costs were $1,762,200 (there are no variable cost variances). Actual fixed manufacturing overhead costs were $4,000,000, the same as budgeted. What is the total cost per unit (box of wine) when practical capacity is used?
a.
$3.45
b.
$5.01
c.
$5.81
d.
$6.39
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