Far north telecom ltd of ontario has organized a new

Reference no: EM13571082

The following information applies to the questions displayed below.

Far North Telecom, Ltd., of Ontario, has organized a new division to manufacture and sell specialty cellular telephones. The division's monthly costs are shown below:


Manufacturing costs:
Variable costs per unit:
Direct materials	$84
Variable manufacturing overhead	$4
Fixed manufacturing overhead costs (total)	$216,600
Selling and administrative costs:
Variable	9% of sales
Fixed (total)	$160,000

Far North Telecom regards all of its workers as full-time employees and the company has a long-standing no layoff policy. Furthermore, production is highly automated. Accordingly, the company includes its labor costs in its fixed manufacturing overhead. The cellular phones sell for $290 each. During September, the first month of operations, the following activity was recorded:


Units produced	3,800
Units sold	3,000

Reference no: EM13571082

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