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ps://mybusinesscourse.com/platform/mod/quiz/attempt.php?attempt-18117688page-6 E Menu QUESTION 7 Partially correct 1.00 points out of 2.00 Flag question Special Order: High-Low Cost Estimation ABS, Inc. produces air bag systems that it sells to North American automobile manufacturers. Although the company has a capacity of 150,000 units per year, it is currently producing at an annual rate of 90,000 units. ABS, Inc. has received an order from a Japanese manufacturer to purchase 30,000 units at $8.75 each. Budgeted costs for 90,000 and 120,000 units are as follows: 90,000 Units 120,000 Un Manufacturing costs Direct materials Direct labor Factory overhead Total s 225,000 300,000 210,000 630,000 990,000 1,140,000 390,000 s 1,372,500 1,530,000 157,500 607,500 Selling and administrative 382,500 Total Costs per unit Manufacturing Selling and administrative Total $11.00 4.25 $ 15.25 $9.50 3.25 s 12.75Explanation / Answer
1.
profit for 120000 unit
2.
742500
90000 unit 120000 unit Sale Price 20 8.75 variable cost 3.5 3.5 contribution 16.5 5.25 total contribution 1485000 157500 fixed cost 900000 profit 585000profit for 120000 unit
2.
120000 unit 30000 unit Sale Price 20 8.75 variable cost 3.5 3.5 contribution 16.5 5.25 total contribution 1980000 157500 fixed cost 900000 profit 1080000 profit for 150000 unit 1237500742500
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