Company X manufactures and sells a single product. The following data is available:

• direct materials cost = $3329 / unit
• direct manufacturing labor cost = $20 per hour; each units takes 100 hours of direct labor for completion
• manufacturing overhead is applied at $26 per direct manufacturing labor hour

Company

X computes the overhead budgeted rates on the basis of direct labor hours.

Company X presented the following information:

• Direct

  materials = $ 25000

• Indirect

  materials = $ 24439

• Direct

  labor = $30000

• Salary

  of production supervisor = $ 52000

• Rent

  on the factory =$ 18000

• Sales

  commissions = $ 15000

• Marketing expenses = $12000

If Company X estimates to use

50000 machine hours and 20000 direct labor hours, what will be the overhead

budgeted rate?

Company

X presents the following information:

• Revenues

  = $200000

• Selling

  price = $20

• Contribution

  margin = $150000

• Operating

  income before taxes = $50000

• Income tax

  rate = 22%

What will be the impact in the net income after taxes if the

company sells 20000 units?

+: operating income increases; -: operating income decreases

Under absorption costing, if a manager's bonus is tied to operating income, then increasing inventory levels compared to last year would result in

The following information is available for Company X:

• Fixed costs are constant at $400000 per month
• During high-output months variable costs are $320000, with 16000 budgeted machine hours
• During low-output months variable costs are $80000, with 4000 budgeted machine hours

Which of the following

is TRUE?

Company X produces product P. Each product is sold for $170. Actual fixed costs are the same as the amount fixed costs budgeted for the month. In March, Company X provided the following information:

- production: 6000 units

- sales: 4500 units

- ending inventory: 1500 units

 Company also incurs a sales commission of $20 per unit.

What is the gross margin per unit when using absorption costing?

Company X has 2 departments: A and B. Indirect costs are allocated to both departments using one of the following criteria:

The total amount of indirect costs is $61539. If these are allocated based on the number of units sold, the amount allocated to the Department A would be:

Company X presents the following information:

• Variable manufacturing costs per unit = $150
• Fixed manufacturing cost per unit = $145
• Production = 1500 units
• Inventory, 1^st January = 600 units
• Inventory, 31^st January =1100 units

What will

be the amount of fixed manufacturing costs expensed in the Income statement, if

absorption costs is used, assuming no variances?