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

question 93

Essay

Saxbury 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.For financial reporting purposes,what is the total amount of product costs incurred to make 5,000 units?
b.For financial reporting purposes,what is the total amount of period costs incurred to sell 5,000 units?
c.If 6,000 units are sold,what is the variable cost per unit sold?
d.If 6,000 units are sold,what is the total amount of variable costs related to the units sold?
e.If 6,000 units are produced,what is the average fixed manufacturing cost per unit produced?
f.If 6,000 units are produced,what is the total amount of fixed manufacturing cost incurred?
g.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?
h.If the selling price is $22.90 per unit,what is the contribution margin per unit sold?
i.If 4,000 units are produced,what is the total amount of direct manufacturing cost incurred?
j.If 4,000 units are produced,what is the total amount of indirect manufacturing cost incurred?
k.What incremental manufacturing cost will the company incur if it increases production from 5,000 to 5,001 units?

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Definitions:

Gold Standard

A monetary system where a country's currency or paper money has a value directly linked to gold; countries agree to convert currency into a fixed amount of gold.

Fixed Exchange-Rate

A regime under which the government or central bank ties the official exchange rate to another country's currency or the price of gold.

Capital Account

A national account that shows the net change in asset ownership for a country. It includes foreign investments and loans.

Financial Account

A component of the balance of payments that records transactions of financial assets between residents of one country and the rest of the world.