Kevin Hall, sales manager, and Laura Allen, controller, at Current Designs are beginning to analyze the cost considerati
Posted: Fri Jul 01, 2022 8:21 am
Kevin Hall, sales manager, and Laura Allen,controller, at Current Designs are beginning to analyze the costconsiderations for one of the composite models of the kayakdivision. They have provided the following production andoperational costs necessary to produce one composite kayak.
Kevlar® $305per kayak
Resin and supplies $122per kayak
Finishing kit (seat, rudder, ropes, etc.) $199 per kayak
Labor $504 per kayak
Selling and administrative expenses—variable $488 perkayak
Selling and administrative expenses—fixed $144,504 per year
Manufacturing overhead—fixed $292,800 per year
Kevin and Laura have asked you to provide acost-volume-profit analysis, to help them finalize the budgetprojections for the upcoming year. Kevin has informed youthat the selling price of the composite kayak will be $2,440.
Calculate variable costs per unit.
Kevlar® $305per kayak
Resin and supplies $122per kayak
Finishing kit (seat, rudder, ropes, etc.) $199 per kayak
Labor $504 per kayak
Selling and administrative expenses—variable $488 perkayak
Selling and administrative expenses—fixed $144,504 per year
Manufacturing overhead—fixed $292,800 per year
Kevin and Laura have asked you to provide acost-volume-profit analysis, to help them finalize the budgetprojections for the upcoming year. Kevin has informed youthat the selling price of the composite kayak will be $2,440.
Calculate variable costs per unit.