The previous year DOU Inc. had sales of $2,400,000, based on a unit-selling price of $600. The variable cost per unit was $440, and fixed costs were $544,000. The maximum sales within Dou’s relevant range are 5,000 units. DOU is considering a proposal to spend an additional $80,000 on billboard advertising during the current year in an attempt to increase sales and utilize unused capacity.
Instructions
1. Construct a cost-volume-profit chart indicating the break-even sales for last year.
Verify your answer, using the break-even equation.
2. Using the cost-volume-profit chart prepared in part (1), determine
(a) the income from operations for last year and
(b) the maximum income from operations that could have been realized during the year.
Verify your answers arithmetically.
3. Construct a cost- contract is signed for the additional billboard advertising. No changes are expected in the unit selling price or other costs. Verify your answer, using the break-even equation.
4. Using the cost-volume-profit chart prepared in part (3), determine
(a) The income from operations if sales total 4,000 units and
(b) The maximum income from operations that could be realized during the year.
Verify your answers arithmetically.
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Ответ:
The correct answe is $4715
Explanation:
First, we need to accommodate the information provided:
Job 323:
direct materials= $2260
direct labor hours= 37
machine hours= 141
The cost of direct hours is $13. Based on a predetermined overhead rate, machine hours cost $14.
Total cost for the job= 2260+ 37*13 + 141*14
Total cost for the job= $4715.