The table below shows the basic relationships among costs in a company Sales pri

Question

The table below shows the basic relationships among costs in a company Sales price Fixed costs 400 per unit Marketing and administrative 48,000 per perio $72,000 Manufacturing overhead Variable Costs erio 16 per unit $18 per unit $70 per unit 120 per unit 1200 per perio Marketing and administrative Manufacturing overhead Direct labour Direct materials Units produced and sold Determine each of the following costs using the above information: 11a) Variable manufacturing costs (per unit) 11b) Product cost using absorption costing (per unit) 11c) Cost of making and selling product (per unit) 11d) Period costs for the period 11e) Conversion costs 11f) contribution margin (per unit)

Explanation / Answer

a Variable manufacturing costs = 18+70+120= $208 b Product cost = 208+(72000/1200)= $268 c Cost of making and selling=268+16+(48000/1200)= $324 d Period costs = 48000+(1200*16)= $67200 e Conversion costs = 72000+(18+17)*1200= $114000 f Contribution margin = 400-208-16= $176

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