Compute the fixed manufacturing overhead costs

Assignment Help Accounting Basics

Reference no: EM131761119

Question: Name on Request Company produces a single product called Thing. The company normally produces and sells 50,000 Things each year at a selling price of $50 per unit, The company's unit costs and total costs at this level is given below:

Direct Materials	Unit Cost $15	Total Cost $750,000
Direct Labor	8	400,000
Variable Manufacturing Overhead	3	150,000
Fixed Manufacturing Overhead	9	450,000
Variable Selling Expenses	4	200,000
Fixed Selling Expenses	6	300,000
Cost per Unit and Total Cost	$45	$2,250,000

1. Assume Name on Request Company has enough capacity to produce 75,000 Things per year without any increase in fixed manufacturing overhead costs. The company could increase its sales by 30% above the present 50,000 units each year if it is willing to increase its advertising expense by $80,000. Would the increased expense be justified?

Please show all calculations.

Reference no: EM131761119

Questions Cloud

Pay off the vehicle loan before moving to his new job : Dwayne Moody purchased a four-wheel drive vehicle and is using severance pay from his current job to pay off the vehicle loan before moving to his new job.

Discuss concessions company reported that gross receipts : First National Bank by issuing a 9% note payable due in three months

What is the present worth of the investment : Nancy's Notions pays a delivery firm to distribute its products in the metro area. Delivery costs are $31,500 per year.

Explain and define the specific topics that you selected : Explain and define the specific topics that you selected. Explain what is happening during this stage from a developmental perspective.

Compute the fixed manufacturing overhead costs : Assume Name on Request Company has enough capacity to produce 75,000 Things per year without any increase in fixed manufacturing overhead costs.

Describe the effects of trade policies : Describe the effects of trade policies, especially import-substitution industrialization vs export promotion on the economic developments of Japan.

Work on to become ethical job candidate : What area in your life do you need to work on to become an ethical job candidate? what steps can you take to develop ethically in that area?

Discuss what is the book value of the tractor : what is the book value of the tractor at the end of each of the 5 years

How does the notion of social structures of accumulation : How does the notion of social structures of accumulation relate to the notion of long swings in economic activity?

User Account

All Pages