Arman Corporation's Relevant Range of Activity Is 3,000 Units to 7,000

question 213

Essay

Arman Corporation's relevant range of activity is 3,000 units to 7,000 units.When it produces and sells 5,000 units,its average costs per unit are as follows:
Required:
a.If 6,000 units are produced,what is the total amount of fixed manufacturing cost incurred?
b.If 6,000 units are produced,what is the total amount of manufacturing overhead cost incurred? What is this total amount expressed on a per unit basis?
c.If 4,000 units are produced,what is the total amount of direct manufacturing cost incurred?
d.If 4,000 units are produced,what is the total amount of indirect manufacturing cost incurred?

Recognize the importance and methods of allocating fixed and variable costs to operating departments for performance evaluation.

Calculate and analyze the impact of actual vs. budgeted costs and activities on departmental charges.

Differentiate between various cost allocation bases and understand their application in cost accounting.

Evaluate the role of service departments within a company and how their costs are allocated to operating departments.

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Definitions:

Proximate Cause

A principle that determines whether a defendant's actions are legally considered to cause the plaintiff's injuries or damage.

Foreseeability

The ability to anticipate or predict an event, action, or consequence that may reasonably occur as a result of certain behavior or circumstances.

Actual Cause

The direct, demonstrable cause of an event or condition, often discussed in legal contexts to establish liability or wrongdoing.

Defendant's Breach

An act of breaking or failing to observe a law, agreement, or code of conduct by the individual or entity being sued in a legal action.