Home Base, Inc ACompute Production Cost Per Unit Under Variable Costing

question 50

Essay

Home Base, Inc.reports the following production cost information:
$\begin{array}{ll}\text { Units produced } & 97,000 \text { units } \\\text { Units sold } & 92,000 \text { units } \\\text { Direct labor } & \$ 17 \text { per unit } \\\text { Direct materials } & \$ 34 \text { per unit } \\\text { Variable overhead } & \$ 2,522,000 \text { in total } \\\text { Fixed overhead } & \$ 1,940,000 \text { in total }\end{array}$ a.Compute production cost per unit under variable costing.
b.Compute production cost per unit under absorption costing.
c.Determine the cost of ending inventory using variable costing.
d.Determine the cost of ending inventory using absorption costing.

Calculate consumer surplus, producer surplus, and deadweight loss in both competitive and monopoly markets.

Understand the effects of government intervention in monopolies through regulations such as price ceilings.

Differentiate between market structures based on the ability to price discriminate.

Comprehend the concept of economies of scale and its relation to natural monopolies.

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Definitions:

Circular Flow Diagram

A visual model that shows how goods, services, and money move through an economy in a circular manner between households and firms.

Firms

Business organizations or entities engaged in commercial, industrial, or professional activities with the goal of generating profits.

Resource Market

Markets where resources (or factors of production) like labor, capital, and raw materials are bought and sold.

Consumption Expenditures

The total amount spent by consumers on goods and services within a specified period.