1. Menk Corporation has provided the following information:
| Cost per Unit | Cost per Period | |
|---|---|---|
| Direct materials | $ 7.15 | |
| Direct labor | $ 4.15 | |
| Variable manufacturing overhead | $ 2.35 | |
| Fixed manufacturing overhead | $ 21,600 | |
| Sales commissions | $ 0.50 | |
| Variable administrative expense | $ 0.40 | |
| Fixed selling andadministrative expense | $ 10,800 |
Required:
- If 5,360 units are sold, what is the variable cost per unit sold?Note: Round “Per unit” answer to 2 decimal places.
- If 5,360 units are sold, what is the total amount of variable costs related to the units sold?
- If 5,360 units are produced, what is the total amount of manufacturing overhead cost incurred?
2. A merchandiser plans to sell 13,300 units next month at a selling price of $110 per unit. It also gathered the following cost estimates for next month:
| Cost | Cost Formula |
|---|---|
| Cost of goods sold | $60 per unit sold |
| Advertising expense | $150,000 per month |
| Depreciation expense | $70,000 per month |
| Shipping expense | $100,000 per month + $10 per unit sold |
| Administrative salaries | $50,000 per month |
| Sales commissions | 5% of sales |
| Insurance expense | $15,000 per month |
What is the total estimated gross margin for next month?
3. Assume the following information:
| Direct materials | $ 70,000 | |
|---|---|---|
| Direct labor | $ 37,000 | |
| Variable manufacturing overhead | $ 12,000 | |
| Fixed manufacturing overhead | 25,000 | |
| Total manufacturing overhead | $ 37,000 | |
| Variable selling expense | $ 15,000 | |
| Fixed selling expense | 20,000 | |
| Total selling expense | $ 35,000 | |
| Variable administrative expense | $ 8,000 | |
| Fixed administrative expense | 12,000 | |
| Total administrative expense | $ 20,000 |
What is the total conversion cost?
4. Assume the following information for a merchandising company:
| Net operating income | $ 19,000 |
|---|---|
| Variable selling expenses | $ 25,000 |
| Cost of goods sold | $ 295,000 |
| Fixed administrative expenses | $ 50,000 |
| Fixed selling expenses | $ 40,000 |
| Variable administrative expenses | $ 5,000 |
What are the company’s sales?
5. If the net operating income is $10,000, the contribution margin is $40,000, and the variable expenses are $31,500, then the sales must be:
