McCracken Aerial, Inc., produces and sells a unique type of TV antenna. The comp

Question

McCracken Aerial, Inc., produces and sells a unique type of TV antenna. The company has just opened a new plant to manufacture the antenna, and the following cost and revenue data have been provided for the first month of the plant's operation: Beginning inventory Units produced Units sold Selling price per unit Selling and administrative expenses 0 33,000 30,000 S 100 Variable per unit Fixed (total) $510,000 Manufacturing costs Direct materials cost per unit Direct labor cost per unit Variable manufacturing overhead cost per unit$ Fixed manufacturing overhead cost (total) $ 20.0 S 10.O 2 $ 990,000 Because the new antenna is unique in design, management is anxious to see how profitable it will be and has asked that an income statement be prepared for the month. Required 1. Assume that the company uses absorption costing a. Determine the unit product cost. (Do not round intermediate calculations and round your final an swer to 1 decimal place.) Unit product cost

Explanation / Answer

1)

a)

The budgeted fixed manufacturing cost per unit and budgeted total manufacturing cost per unit under absorption costing:

b)

2)

a)

b)

Particulars Units Beginning inventory (units) 0 Units produced 33,000 Goods available for sale 33,000 Units sold -30,000 Closing Inventory 3,000

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