Allied Company Showed the Following Costs for Last Month

question 56

Essay

Allied Company showed the following costs for last month.
Direct materials $40,000
Direct labour 35,000
Manufacturing overhead 52,000
Selling expense 17,000
Administrative expense 12,000
Last month, Allied produced and sold 20,000 units at a sales price per unit of $18. Assume no beginning or ending inventory balances for work-in-process and finished goods inventory.
Required: Solve for the following amounts.
A. total product cost for last month
B. unit product cost for last month
C. total period costs
D. gross margin for last month
E. operating income for last month

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Definitions:

Variable Cost

Expenses that undergo alteration in response to the volume of production executed.

Office Rent

The cost associated with leasing a space for business operations or administrative work.

Financial Break-even Point

The Financial Break-even Point is the level of revenue at which a company's total costs and total revenues are exactly equal, indicating no net profit or loss.

Net Present Value

A financial analysis method used to determine the overall value of a projected investment or project by calculating the present value of expected future cash flows.