Cairney, Incorporated manufactures a specialized part used in internal combustion engines. The annual demand for the part is249,000 units. The facility has a practical capacity of 264,000 units annually. The company leased the current facility because facilitiescapable of manufacturing the unit require machines that can produce 66,000 units each. The annual cost of the facility is $1,013,760.The variable cost of a part is $4.Required:a. What cost per unit should the cost system report to facilitate management decision making?Note: Round your answer to 2 decimal places.b. What is the cost of excess capacity?a. Cost per unitb. Cost of excess capacity

To determine the cost per unit, we need to consider both fixed and variable costs. The fixed cost is…

Answered: a. What cost per unit should the cost…

a. What cost per unit should the cost system report to facilitate management decision making? Note: Round your answer to 2 decimal places. b. What is the cost of excess capacity?

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter11: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 3CMA: Aril Industries is a multiproduct company that currently manufactures 30,000 units of Part 730 each...

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