Formatting Table D15 Production Quantity Monthly Cost Direct 1 Fixed Costs 2 Adv

Question

Formatting Table D15 Production Quantity Monthly Cost Direct 1 Fixed Costs 2 Advertising and Promotion 3 General and Administrative 4 Salary and Wage 5 Conversion 6 Mach Plant & Equip 7 Building and Improvement 8 Interest $9,388 $19,624 $14,479 $42,857 $1,583 $2,708 $5,563 $96,203 (CS) Fixed Material Total Costs Revenue 2000 $96,203 3000 $96,203 4000 $96,203 5000 $96,203 7000 $96,203 9000 $96,203 10000 $96,203 11000 $96,203 12000 $96,203 $7,410.26 1 Direct Material per Batch 2 Selling Price $15.50 2,755 cases per batch Arborcrest I Practice

Explanation / Answer

Direct Materials:

Either of the two information mentioned about Materials is incorrect:

a. If Direct Materials per batch is 7,410.26, then number of cases per batch should be 1240 cases per batch (7,410.26*2000/11,952). But it is mentioned that there are 2,755 cases per batch.

b. If there are 2,755 cases per batch, then Direct Materials Cost per batch should be 16,463.88 (11,952*2755/2000). But it is mentioned that Direct Materials Cost per batch is 7,410.26.

So, you cannot ascertain Direct Materials for first row owing to above reasons.

Otherwise for other rows, you can calculate Materials Cost if Row1 Materials cost is correct.

Example: Row 2 Direct Materials = 11,952*3000/2000 = 17,928. And similarly for other rows.

Total Cost:

Total Cost = Direct Materials + Fixed Cost

Example: For first row, Total Cost = 11,952 + 96,203 = 108,155. Similarly for all rows

Revenue:

Revenue = Selling Price * Production Quantity

Example: For first row, Revenue = 15.50*2,000 = 31,000. Similarly for all rows.

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