Karpowicz Corporation's Relevant Range of Activity Is 7,000 Units to 11,000

question 173

Essay

Karpowicz Corporation's relevant range of activity is 7,000 units to 11,000 units.When it produces and sells 9,000 units, its average costs per unit are as follows: Required:
a.If the selling price is $21.40 per unit, what is the contribution margin per unit sold?
b.If 8,000 units are produced, what is the total amount of direct manufacturing cost incurred?
c.If 8,000 units are produced, what is the total amount of indirect manufacturing cost incurred?
d.What incremental manufacturing cost will the company incur if it increases production from 9,000 to 9,001 units?

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Definitions:

Monthly Interest Rate

The interest rate applied to a loan or debt for one month, often used to calculate the monthly interest payment.

Variable Cost

Costs that vary directly with the level of production or the volume of services provided.

Inventories

The raw materials, work-in-process products, and finished goods that a company holds for the purpose of sale in the near future.