Bailey Company manufacturers and sells one product for $39 per unit. The company maintains no beginning or ending inventories and its relevant range of production is 20,000 units to 30,000 units. When Bailey Company produces and sells 24,000 units, its unit costs are as follows: Amount per Unit Direct materials $ 10.00 Direct labor $ 6.00 Variable manufacturing overhead $ 2.00 Fixed manufacturing overhead $ 7.00 Fixed selling expense $ 3.75 Fixed administrative expense $ 2.25 Sales commissions $ 4.50 Variable administrative expense $ 1.50
Bailey Company manufacturers and sells one product for $39 per unit. The company maintains no beginning or ending inventories and its relevant range of production is 20,000 units to 30,000 units. When Bailey Company produces and sells 24,000 units, its unit costs are as follows: Amount per Unit Direct materials $ 10.00 Direct labor $ 6.00 Variable manufacturing overhead $ 2.00 Fixed manufacturing overhead $ 7.00 Fixed selling expense $ 3.75 Fixed administrative expense $ 2.25 Sales commissions $ 4.50 Variable administrative expense $ 1.50
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Bailey Company manufacturers and sells one product for $39 per unit. The company maintains no beginning or ending inventories and its relevant range of production is 20,000 units to 30,000 units. When Bailey Company produces and sells 24,000 units, its unit costs are as follows:
Amount per Unit
Direct materials $ 10.00
Direct labor $ 6.00
Variable manufacturing
Fixed manufacturing overhead $ 7.00
Fixed selling expense $ 3.75
Fixed administrative expense $ 2.25
Sales commissions $ 4.50
Variable administrative expense $ 1.50
Transcribed Image Text:1a
1b
2a
3a
3b
2b
If 23,000 units are produced, what is the average fixed manufacturing
cost per unit produced? Round answers to 2 decimal places
4a
4b
5
6a
6b
7a
7b
8
9
For financial accounting purposes, what is the TOTAL PRODUCT COSTS
incurred to make 24,000 units?
10
What is the TOTAL PERIOD COSTS incurred to sell 24,000 units?
If 23,000 units are produced, what is the variable manufacturing cost
per unit produced? Round answers to 2 decimal places
If 25,000 units are produced, what is the variable manufacturing cost
per unit produced? Round answers to 2 decimal places
If 25,000 units are produced, what is the average fixed manufacturing
cost per unit produced? Round answers to 2 decimal places
If 26,000 units are produced, what are the TOTAL AMOUNT of direct
manufacturing costs incurred to support this level of production?
If 26,000 units are produced, what are the TOTAL AMOUNT of indirect
manufacturing costs incurred to support this level of production?
What total incremental manufacturing cost will Bailey incur if it
increases production from 24,000 to 24,001? Round answer to 2
decimal places
What is Bailey's contribution margin per unit? Round answer to 2
decimal places
What is its contribution margin ratio? Round answer to 2 decimal
places
What is Bailey's break-even point in unit sales? Do not round your
intermediate values
What is Bailey's break-even point in dollar sales? Do not round your
intermediate values
How much will Bailey's net operating income increase if it can grow
production and sales from 24,000 units to 25,500 units?
What is Bailey's margin of safety at a sales volume of 24,000 units Do
not round your intermediate values
What is Bailey's degree of operating leverage at a sales volume of
24,000 units? Round your answer to 1 decimal place
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