Xi Manufacturing,which Began Operations on January 1 of the Current

question 7

Essay

Xi Manufacturing,which began operations on January 1 of the current year,produces an industrial scraper that sells for $325 per unit.Information related to the current year's activities follows.
A.Compute the company's average unit cost of production.
B.Determine the cost of the December 31 finished-goods inventory.
C.Compute the company's cost of goods sold.
D.1.No change.Direct labor is a variable cost,and the cost per unit will remain constant.
2.No change.Despite the increase in the number of units produced,this is a fixed cost,which remains the same in total.
D.If next year's production increases to 23,000 units and general cost behavior patterns do not change,what is the likely effect on:
1.The direct-labor cost of $35 per unit? Why?
2.The fixed manufacturing overhead cost of $400,000? Why?

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Definitions:

Net Capital Outflow

The difference between a nation's total investment in foreign countries and foreign investments within the nation, over a specified period of time.

Loanable Funds

The Loanable Funds market is a conceptual framework where savers supply funds to borrowers, determining the equilibrium interest rate.

Net Capital Outflow

The difference between the domestic country's purchases of foreign assets and foreign purchases of the domestic country’s assets for a certain period.

Domestic Investment

Financial investments within a country's borders, including purchases of property, plants, and equipment.