FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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- Required information [The following information applies to the questions displayed below.] Morning Dove Company manufactures one model of birdbath, which is very popular. Morning Dove sells all units it produces each month. The relevant range is 0 to 1,600 units, and monthly production costs for the production of 1,300 units follow. Morning Dove's utilities and maintenance costs are mixed with the fixed components shown in parentheses. Production Costs Direct materials Direct labor Utilities ($110 fixed) Supervisor's salary Maintenance ($270 fixed) Depreciation Total Cost $ 2,500 8,100 650 3,000 510 750 Suppose it sells each birdbath for $24. Required: 1. Calculate the unit contribution margin and contribution margin ratio for each birdbath sold. 2. Complete the contribution margin income statement assuming that Morning Dove produces and sells 1,500 units.arrow_forwardC-Cubed uses standards to control its costs. The direct materials and direct labor standards for one Fit-Right-Bike, which is made out of chromoly steel, are given below: Quantity Standard 60 inches Price Standard $3.50 per inch $20 per hour Direct Materials Direct Labor 3 hours During the month of September, C-Cubed planned on making 300 bikes, but it actually produced 275 bikes. C-Cubed incurred the following costs: A. 19,000 inches of chromoly steel were purchased at a cost of $3.25 per inch. C-Cubed used only 17,500 inches of chromoly steel in making the 275 bikes. B. Direct laborers worked 825 hours at an average rate of $22 per hour. Compute the labor price variance for September. Multiple Choice $1,710U $1.650U $1.710F $1,650Farrow_forwardMo Furniture manufactures a frame for use in its production of sofas. When 10,000 frames are produced, the costs per unit are: Direct materials $ 12 Direct manufacturing labor 60 Variable manufacturing overhead 24 Fixed manufacturing overhead 32 Total $128 A company has offered to sell Mo Furniture 10,000 sofa frames for $120 per unit. Fixed manufacturing overhead of $20 per unit used to make the frame could be eliminated if the frames were purchased instead of made. What is the relevant cost per unit to make the frame in this make or buy decision?arrow_forward
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