Use the data given below. Sales $32 Direct materials $10 Direct labor $4.50 Variable...
Question:
Use the data given below.
| Sales | $32 |
| Direct materials | $10 |
| Direct labor | $4.50 |
| Variable manufacturing overhead | $2.30 |
| Fixed manufacturing overhead | $5 |
| Variable selling expense | $1.20 |
| Fixed selling expense | $3.50 |
| Total cost per unit | $26.50 |
An outside manufacturer has offered to produce units and ship them directly to Andretti's customers. If Andretti Company accepts this offer, the facilities that it uses to produce units would be idle; however, fixed manufacturing overhead costs would be reduced by 75%. Because the outside manufacturer would pay for all shipping costs, the variable selling expenses would be only two-thirds of their present amount.
Compute the unit cost that is relevant for comparison to the price quoted by the outside manufacturer.
Relevant Cost:
A relevant cost is a cost item that must be included in the financial analysis of a management decision because it is different between the alternatives. Identifying all relevant costs is one of the first steps in management decision-making.
Answer and Explanation: 1
Become a Study.com member to unlock this answer! Create your account
View this answerThe unit cost that is relevant for comparison to the price quoted by the outside manufacturer is the sum of all the expenses the company can avoid...
See full answer below.
Ask a question
Our experts can answer your tough homework and study questions.
Ask a question Ask a questionSearch Answers
Learn more about this topic:
Get access to this video and our entire Q&A library
Relevant & Irrelevant Costs in Accounting | Overview & Examples
from
Chapter 8 / Lesson 1
95K
Explore relevant and irrelevant costs. Study the definitions and types of relevant and irrelevant costs, and discover examples of relevant costs in decision-making.
Related to this Question
- Data Selling price per unit $389 Manufacturing costs: Variable per unit produced: Direct materials $145 Direct labor $78 $88,400 Variable manufacturing overhead $40 Fixed manufacturing overhead
- Use the data given below. Variable costs per unit: Manufacturing: Direct materials $22 Direct labor $7 Variable manufacturing overhead $4 Variable selling and administrative $5 Fixed costs per year: Fixed manufacturing overhead $166,400 Fixed selling and
- Per unit costs from the 20,000 units asked for sales $ 32.00, direct materials $ 10.00, Direct labor $ 4.50, Variable manufacturing overhead $ 2.30, Fixed manufactureing overhead $ 5.00, Variable selling expense $ 1.20, Fixed selling expense $ 3.5
- Use the data given below to prepare an income statement using variable costing. Units produced 18,000 Units sold 17,500 Selling price $425 Variable costs: Manufacturing cost per unit produced Direct materials $30 Direct manufacturing labor $25 Manufacturi
- 1. Selling price per unit - $333 Manufacturing costs: Variable per unit produced: Direct materials - $106 ; Direct labor - $64 ; Variable manufacturing overhead - $35 ; Fixed manufacturing overhead p
- Sales $150,000 Direct materials used 37,000 Direct labour 15,000 Variable manufacturing overhead 15,000 Fixed manufacturing overhead 17,000 Variable selling and administrative expenses ? Fixed selling
- Below is the cost per unit data for Hellner Corporation: Cost per unit Direct materials $7.00 Direct labor 5.00 Variable overhead 2.00 Fixed overhead 4.00 Variable selling expenses 1.00 Fixed selling expenses 6.00 The unit manufacturing cost using variabl
- Flip had sales of $10,000 (100 units at $100 per). Manufacturing costs consisted of direct labor $1,500, direct materials $1,400, variable factory overhead $1,000, and fixed factory overhead $500. The company did not maintain any inventories, so the total
- Assume the following information: Direct materials $70,000 Direct labor $48,000 Variable manufacturing overhead $13,000 Fixed manufacturing overhead $25,000 Total manufacturing overhead $38,000 Variable selling expense $15,000 Fixed selling expense $20,00
- Flip had sales of $10,000 (100 units at $100 per). Manufacturing costs consisted of direct labor $1,500, direct materials $1,400, variable factory overhead $1,000, and fixed factory overhead $500. The
- Flip's sales were $10,000 (100 units at $100 per). Manufacturing costs consisted of direct labor $1,500, direct materials $1,400, variable factory overhead $1,000, and fixed factory overhead $500. The
- For each variable cost per unit listed below, determine the total variable cost when units produced and sold are 25, 50, and 100 units. Direct materials $40 Direct labor 80 Variable overhead 9 Sales commission 12
- The MisterKite Company experienced the following costs in 2007: Direct materials: $2/unit Direct labor: $4/unit Variable manufacturing overhead: $1/unit Variable selling: $3/unit Fixed manufacturing overhead: $80,000 Fixed selling: $40,000 Fixed administ
- The following data are from the accounting records of Niles Castings for year 2: Units produced and sold 86,000 Total revenues and costs: Sales revenue $320,000 Direct materials costs 64,000 Direct labor costs 34,000 Variable manufacturing overhead 11,00
- Units produced 3,600 Units sold 3,600 Unit sales price $200 Direct material per unit $60 Direct labor per unit $30 Variable manufacturing overhead per unit $30 Fixed manufacturing overhead $115,200 Va
- Given the following information below. Average Cost per Unit Direct materials - $9.00 Direct labor- $6.00 Variable manufacturing overhead - $ 3.50 Fixed manufacturing overhead - $7.00 Fixed selling expense - $5.50 Fixed administrative expense - $4.5
- Given the following information below. Average Cost per Unit Direct materials - $9.00 Direct labor- $6.00 Variable manufacturing overhead - $ 3.50 Fixed manufacturing overhead - $7.00 Fixed selling expense - $5.50 Fixed administrative expense - $4
- O'Neill's Products manufactures a single product. Cost, sales, and production information for the company and its single product is as follows: Selling price per unit is $68. Variable manufacturing costs per unit manufactured (included direct materials,
- Given the following information below. Average Cost per Unit Direct materials - $9.00 Direct labor- $6.00 Variable manufacturing overhead - $ 3.50 Fixed manufacturing overhead - $7.00 Fixed selling expense - $5.50 Fixed administrative expense - $
- If direct material is 6.69, direct labor 3.33, variable overhead 1.27, and fixed overhead .088. Your producing 2400 units what is your total fixed cost and what is the variable cost per unit?
- Use the data given below. Sales $3,500,000 Cost of sales: Direct material $500,000 Direct labor $250,000 Variable overhead $275,000 Fixed overhead $600,000 $1,625,000 Gross profit $1,875,000 Selling and general & Admin. expense: Variable $750,000 Fixed $2
- Given the following information below. Average Cost per Unit Direct materials - $9.00 Direct labor- $6.00 Variable manufacturing overhead - $ 3.50 Fixed manufacturing overhead - $7.00 Fixed selling expense - $5.50 Fixed administrative expen
- Given the following information below. Average Cost per Unit Direct materials - $9.00 Direct labor- $6.00 Variable manufacturing overhead - $ 3.50 Fixed manufacturing overhead - $7.00 Fixed selling expense - $5.50 Fixed administrative expe
- Given the following information below. Average Cost per Unit Direct materials - $9.00 Direct labor- $6.00 Variable manufacturing overhead - $ 3.50 Fixed manufacturing overhead - $7.00 Fixed selling expense - $5.50 Fixed administrative expens
- A company produces and sells 10,000 units and its unit costs are as follows: Amount Per Unit Direct materials $6.00 Direct labor $3.50 Variable manufacturing overhead $1.50 Fixed manufacturing overhe
- In the manufacture of 10,000 units of a product, direct materials cost incurred was $145,800, direct labor cost incurred was $82,000, and applied factory overhead was $45,500. What is the total conver
- More had sales of $10,000 (100 units at $100 per). Manufacturing costs consisted of direct labor $1,500, direct materials $1,400, variable factory overhead $1,000, and fixed factory overhead $500. The
- XYZ had sales of $19,000 (95 units at $200 each). Manufacturing costs consisted of direct labor $2,500, direct materials $2,600, variable factory overhead $3,600, and fixed factory overhead $800. Selling expenses totaled $4,900 ($1,200 variable and $3,700
- XYZ had sales of $50,000 (95 units at $200 each). Manufacturing costs consisted of direct labor $2,500, direct materials $2,600, variable factory overhead $3,600, and fixed factory overhead $800. Selling expenses totaled $4,900 ($1,200 variable and $3,700
- Manufacturing has a capacity of 45,000 units and is currently producing and selling 40,000 units at $23/unit. The present cost structure, per unit, is: Direct material $10 Direct Labor $5 Variable Overhead $3 Fixed Overhead $4 The manufacturer has receive
- Jetsam had sales of $10,000 (100 units at $100 per). Manufacturing costs consisted of direct labor $1,500, direct materials $1,400, variable factory overhead $1,00, and fixed factory overhead $500. The company did not maintain any inventories, so total co
- The cost of manufacturing does not include: A. Direct material and Direct labor B. Variable manufacturing overhead C. Fixed manufacturing overhead D. Cost of purchase
- In the manufacture of 8,000 units of a product, direct materials cost incurred was $154,600, the direct labor cost incurred was $84,000, and applied factory overhead was $45,500. What is the total con
- Under variable costing, all of the following are considered product costs except: a. direct materials. b. direct labor. c. variable manufacturing overhead. d. variable selling and administrative expenses.
- Manufacturing Cost Data Direct Materials Used Direct Labor Used Factory Overhead Total Manufacturing Costs (1) $41,800 $62,900 $52,500 $157,200 (2) $70,000 $78,000 $143,000 $299,000 (3) $57,900 $141
- Use the data given below. Direct materials Inventory beginning balance $184 Direct materials purchased $640 Direct materials used $675 Total manufacturing overhead costs $788 Variable manufacturing overhead costs $465 Total manufacturing costs $2,820 Work
- Factory rent is categorized as: a. Product and direct material costs. b. Product and direct labor costs. c. Product and manufacturing overhead costs. d. Period and selling/marketing costs.
- The total production cost of a job is composed of: A) direct material and direct labor. B) direct material, direct labor, manufacturing overhead, and outlays for selling. C) direct material, direct labor, manufacturing overhead, and outlays for both selli
- All of the following are inventoried under variable costing except: a. variable manufacturing overhead. b. fixed manufacturing overhead. c. variable manufacturing overhead and fixed manufacturing overhead. d. direct labor. e. direct materials.
- In the manufacture of 10,000 units of a product, direct materials cost incurred was $145,800, direct labour cost incurred was $82,000, and applied factory overhead was $45,500. What is the total conversion cost? a. $145,800 b. $273,300 c. $127,500 d. $
- Market Manufacturing makes 40,000 units per year of a part it uses in the products it manufactures. The unit product cost of this part is computed as follows: Direct materials: $11.30 Direct labor: 22.70 Variable manufacturing overhead: 1.20 Fixed manufa
- In the manufacture of 10,000 units of a product, direct materials cost incurred was $165,000, direct labor cost incurred was $105,000, and applied factory overhead was $53,000. What is the total conversion cost? a. $323,000 b. $158,000 c. $53,000 d. $218,
- Larcker Manufacturing's cost accountant has provided you with the following information for January operations: Direct materials $105 per unit Fixed manufacturing overhead costs $675,000 Sales price $395 per unit Variable manufacturing overhead $60 per un
- The following costs have been estimated based on sales of 23,000 units: Total Annual Costs Percent That Is Variable Direct materials $230,000 100% Direct labor 160,000 100 Manufacturing overhead 160,000 50 Selling and administrative 100,000 25 What sellin
- In the manufacture of 10,000 units of a product, direct materials costs incurred were $165,000, direct labor costs incurred were $105,000, and applied factory overhead was $53,000. What is the total conversion cost?
- Given the following information below. Average Cost per Unit Direct materials - $9.00 Direct labor- $6.00 Variable manufacturing overhead - $ 3.50 Fixed manufacturing overhead - $7.00 Fixed selling ex
- In the manufacture of 10,000 units of a product, direct materials cost incurred was $165,000, direct labor cost incurred was $105,000, and applied factory overhead was $53,000. What is the total conve
- X Company had sales of $10,000 (100 units at $100 per). Manufacturing costs consisted of direct labor $1,500, direct materials $1,400, variable factory overhead $1,000, and fixed factory overhead $500. The company did not maintain any inventories, so tot
- St. Claire Manufacturing expects to produce and sell 6,000 units of Big, its only product, for $20 each. Direct material cost is $2 per unit, direct labor cost is $8 per unit, and variable manufacturing overhead is $3 per unit. Fixed manufacturing overhea
- Majestic Company manufactures a product that has the following unit costs: direct materials, $5; direct labor, $7; variable overhead, $3; and fixed overhead, $5. Fixed selling costs are $200,000 per y
- XYZ had sales of $10,000 (100 units at $100). Manufacturing costs consisted of direct labor $1,500, direct materials $1,400, variable factory overhead $1,000, and fixed factory overhead $500. The company did not maintain any inventories, so the total cost
- Categorize the following costs as: A. Product cost and Direct Materials B. Product Cost and Direct Labor C. Product Cost and Manufacturing Overhead D. Period Cost and Selling and Marketing Expense
- A company produces 2,000 units of a product with a regular selling price of $50 per unit. The costs incurred by the company for producing a unit are: Direct material $15, direct labor $10, Variable manufacturing overheads $7, and fixed manufacturing over
- Black Corporation manufactures a product with the following full unit costs at a volume of 4,000 units. Direct materials $200 Direct labor $80 Manufacturing OH (30% variable) $150 Selling expenses (50% variable) $50 Admin. expenses (10% variable) $80 Tota
- Larcker Manufacturing's cost accountant has provided you with the following information for January operations. Direct materials $35 per unit Fixed manufacturing overhead costs $205,000 Sales price $200 per unit Variable manufacturing overhead $21 per uni
- A company sells and manufacturers one product. in the first year of operations, variable costs per unit are direct material $92, fixed costs per year are direct labor $720,000, fixed manufacturing ove
- Wages paid to the equipment mechanic in a factory are: a. Product and direct material cost. b. Product and direct labor cost. c. Product and manufacturing overhead cost. d. Period cost and selling and marketing expense.
- Lone Star has computed the following unit costs for the year just ended: Direct material used $12 Direct labor 18 Variable manufacturing overhead 25 Fixed manufacturing overhead 29 Variable selling a
- Lone Star has computed the following unit costs for the year just ended: Direct material used $12 Direct labor $18 Variable manufacturing overhead $25 Fixed manufacturing overhead $29 Variable selling
- The estimated unit costs for a company to produce and sell a product at a level of 15,000 units per month are as follows: Cost Item Estimated Unit Cost Direct Material 39 Direct Labor 27 Variable manufacturing overhead 22 Fixed manufacturing overhead 13 V
- The production of one unit of Product B used $17.50 of direct materials and $21.00 of direct labor. The unit sold for $56.00 and was assigned overhead at a rate of 30% of labor costs. What is the gros
- Larcker Manufacturing's cost accountant has provided you with the following information for January operations: Direct materials $21 per unit Fixed manufacturing overhead costs $135,000 Sales price $79 per unit Variable manufacturing overhead $12 per unit
- A manufacturer reports the following information on its product. Direct materials cost $53 per unit Direct labor cost $12.30 per unit Variable overhead cost $6.30 per unit Fixed overhead cost $2.30 per unit Target markup 50% Compute the target selling pri
- Marketing Executive's Salary would be categorized as: a. Product and direct material costs. b. Product and direct labor costs. c. Product and manufacturing overhead costs. d. Period and selling/marketing costs.
- XYZ had sales of $10,000 (100 units at $100 per). Manufacturing costs consisted of direct labor $1,500, direct materials $1,400, variable factory overhead $1,000, and fixed factory overhead $500. The company didn t maintain any inventories, so total cost
- XYZ had sales of $10,000 (100 units at $100 per). Manufacturing costs consisted of direct labor $1,500, direct materials $1,400, variable factory overhead $1,000, and fixed factory overhead $500. The company did not maintain any inventories, so total cost
- Fultz Company has accumulated the following budget data for the year 2017. Sales: 31,360 units, unit selling price $87. Cost of one unit of finished goods: direct materials 1 pound at $5 per pound, direct labor 3 hours at $13 per hour, and manufacturing
- What is the net operating income (loss) n Year 2 under absorption costing? Data Selling price per unit $323 Manufacturing costs: Variable per unit produced: Direct materials $119 Direct labor $69
- Listed below are a company's monthly unit costs to manufacture and market a particular product. __Manufacturing costs__ Direct materials - $2.00 Direct labor - 2.40 Variable indirect - 1.60 Fixed indirect - 1.00 __Marketing costs:__ Variable - 2.50 Fixed
- The following information relates to a product produced by Faulkland Company: Direct materials $15 Direct labor $12 Variable overhead $11 Fixed overhead $13 Unit cost $51 Fixed selling costs are $1,080,000 per year. Variable selling costs of $3 per unit s
- A manufacturer allocates manufacturing overhead to jobs on the basis of direct labour hours. Job CV19 required 4 units of direct materials at a cost of 25 pounds per unit and 12 direct labour hours at 16 pounds per hour. The estimated total manufacturing
- Maggiolo Company sells several products. Information on average revenue and costs is as follows: Selling price per unit $28.50 Variable costs per unit: Direct material $5.25 Direct manufacturing labor $1.15 Manufacturing overhead $0.25 Selling costs $1.85
- Waupun Company has the following unit costs: Variable manufacturing overhead $31 Direct material $28 Direct labor $33 Fixed manufacturing overhead $18 Fixed marketing and administrative $13 What cost per unit would be used for product costing under variab
- A manufacturer reports the following information on its product. Direct materials cost $59 per unit Direct labor cost $12.90 per unit Variable overhead cost $6.90 per unit Fixed overhead cost $2.90 per unit Target markup 40% Compute the target selling pri
- If one unit of Product Z2 used $2.60 of direct materials and $3.10 of direct labor, sold for $9.00, and was assigned overhead at the rate of 31% of direct labor costs, how much gross profit was realized from this sale? A. $2.34 B. $5.70 C. $0.96 D. $3.30
- If one unit of Product Z2 used $3.20 of direct materials and $3.70 of direct labor, sold for $10.00, and was assigned overhead at the rate of 37% of direct labor costs, how much gross profit was realized from this sale? a. $10.00. b. $3.10. c. $1.37.
- Sales commission is a: a. Product and direct material cost. b. Product and direct labor cost. c. Product and manufacturing overhead cost. d. Period cost and Selling and Marketing expense. e. Period cost and General and Administrative expenses.
- Lone Star has computed the following unit costs for the year just ended: $ Direct material used 10 Direct labor 18 Variable manufacturing overhead 30 Fixed manufacturing overhead 27 Variable selling and administrative cost 7 Fixed selling and administrati
- Given the following data, what is the Cost of Goods Manufactured (COGM) for the period? -Direct material purchases were $75,000. -Direct materials inventory decreased by $3,000. -Direct labor costs were $200,000. -Manufacturing overhead was $95,000.
- The total manufacturing cost variance consists of: a. direct materials cost variance, direct labor rate variance, and factory overhead cost variance b. direct materials price variance, direct labor cost variance, and fixed factory overhead volume variance
- Manufacture Information of 60,000 units of CCTVs - Direct Material $8,300,000 - Direct Labour $3,500,000 - General and administrative expenses $1,700,000 - Fixed manufacturing overhead $2,500,000 - Variable manufacturing overhead $3,500,000 - Total c
- (a) Calculation of Polk's manufacturing cost per unit using variable costing Variable costing Direct Material $ 7.88 Direct Labor $ 2.57 Variable manufacturing overhead $ 6.04 Manufacturing cost per
- Bonovich Company produces a single product with sales of 40,000 units and has the following unit costs: Direct materials $16 Direct labor 7 Variable overhead 7 Fixed overhead 10 (*) (*) Based on a total fixed overhead of $400,000 and units produced of 40,
- The standard costs for a manufacturing business are $12 per unit for direct materials, $8 per unit for direct labor and $5 per unit for manufacturing overhead. The sales projection is for 5,000 units, 3,500 units need to be in stock at the end of the peri
- When direct costing is used, the cost of goods sold reflects ________. (a) both variable and fixed manufacturing costs (b) variable manufacturing costs and variable selling and administrative expenses (c) variable manufacturing costs only (d) fixed manufa
- Lone Star has computed the following unit costs for the year just ended: Direct material used $12 Direct labor $18 Variable manufacturing overhead $25 Fixed manufacturing overhead $29 Variable sellin
- Period costs under the variable costing method include: A. variable manufacturing overhead. B. variable selling and administrative costs. C. direct materials. D. direct labor.
- Use the following data to estimate the Cost of goods manufactured. Sales $680,000 Raw materials inventory, 1/1 $40,000 Raw materials inventory, 12/31 $11,000 Raw materials purchases $190,000 Direct labor $105,000 Manufacturing overhead $99,000 Selling and
- A company had the following per-unit costs when 10,000 units were produced. Direct labor $2 D irect material 3 Variable overhead 4 Total variable cost 9 Fixed overhead ($50,000/10,000 units) .. 5 Total production cost per unit .. $14 1. Compute th
- Larcker Manufacturing's cost accountant has provided you with the following information for January operations: Direct materials $105 per unit Fixed manufacturing overhead costs $675,000 Sales price $395 per unit Variable manufacturing overhead $60 pe
- Washington Supply Company experienced the following costs in 2010: Direct Materials $3.50/unit Direct Labor $2.55/unit Manufacturing Overhead Costs Variable $1.50/unit fixed $20,000 Selling & Administrative Costs Variable Selling $2.15/unit Fixed S
- Doon company incurred the following costs while producing 580 units: direct materials, $12 per unit; direct labor, $21 per unit; variable manufacturing overhead, $11 per unit; total fixed manufacturing overhead costs, $12,180; variable selling and adminis
- Using the following data: Manufacturing costs Direct materials $35 per unit Direct labor $55 per unit Overhead costs Variable $40 per unit Fixed $6,600,000 (per year) Selling and administrative costs for the year Variable $775,000 Fixed $4,500,000 Produ
- Manufacturing costs that cannot be classified as either direct materials or direct labor are known as: a. selling and administrative expenses. b. non-manufacturing costs. c. manufacturing overhead. d. period costs.
- If one unit of Product X used $2.50 of direct materials and $3 of direct labor, sold for $8, and was assigned overhead at the rate of 30% of direct labor costs, how much gross profit was realized from this sale? A) $8 B) $5.50 C) $2.50 D) $1.60 E) $0
- Job 397 was recently completed. The following data have been recorded on its job cost sheet: Direct materials $40,000 Direct labor-hours 600 DLHs Direct labor wage rate $13 per DLH Number of units completed 2,000 units The company applies manufacturing ov
- Glendale Company sells its product at a unit price of $12.00. Unit manufacturing costs are direct materials, $2.00; direct labor, $3.00; and variable manufacturing overhead, $1.50. Total fixed manufacturing costs are $22,500 per year. Selling and administ
- Nilsan Company experienced the following costs in 2010: Direct materials $2.25 / unit Direct labor $4.10 / unit Variable manufacturing overhead $0.75 / unit Variable selling $3.00 / unit Fixed manufa
- The sum of the direct materials costs, direct labor costs, and manufacturing overhead incurred is the a. cost of goods manufactured. b. total manufacturing overhead. c. total manufacturing costs. d. total cost of work in process.
- XYZ had sales of $10,000 (100 units at $100 per). Manufacturing costs consisted of direct labor $1,500, direct materials $1,400, variable factory overhead $1,000, and fixed factory overhead $500. The company did not maintain any inventories, so the total
Explore our homework questions and answers library
Browse
by subject