Determine the fixed manufacturing cost per month at each of the following capacity levels

Combined Motors specializes in producing one specialty vehicle. It is called Surfer and is styled to easily fit multiple surfboards in its back area and​top-mounted storage racks. Combined
has the following manufacturing​costs:

-Plant management​ costs, $2,124,000 per year
-Cost of leasing​ equipment, $2,196,000 per year
-​Workers' wages, $600 per Surfer vehicle produced
-Direct materials​ costs: Steel, $1,500 per​ Surfer; Tires, $130 per​ tire, each Surfer takes 5 tires​ (one spare)
-City​ license, which is charged monthly based on the number of tires used in​ production:
0-500 tires $40,000
501-1,000 tires $65,000
more than 1,000 tires $210,000

What is the variable manufacturing cost per​ vehicle? What is the fixed manufacturing cost per​ month?

Kennywood Inc., a manufacturing firm, is able to produce 1,300 pairs of pants per hour, at maximum efficiency. There are three eight-hour shifts each day. Due to unavoidable operating interruptions, production averages 850 units per hour. The plant actually operates only 28 days per month. Based on the current budget, Kennywood estimates that it will be able to sell only 500,000 units due to the entry of a competitor with aggressive marketing capabilities. But the demand is unlikely to be affected in future and will be around 519,000. Assume the month has 30 days. What is the master-budget capacity utilization level for this budget period?
A) 500,000 units
B) 519,000 units
C) 523,800 units
D) 555,400 units

Kennywood Inc., a manufacturing firm, is able to produce 1,000 pairs of pants per hour, at maximum efficiency. There are three eight-hour shifts each day. Due to unavoidable operating interruptions, production averages 800 units per hour. The plant actually operates only 28 days per month. Based on the current budget, Kennywood estimates that it will be able to sell only 501,000 units due to the entry of a competitor with aggressive marketing capabilities. But the demand is unlikely to be affected in future and will be around 519,000. Assume the month has 30 days.
What is the practical capacity for the month?
A) 216,000 units
B) 720,000 units
C) 537,600 units
D) 672,000 units

Ms. Sophia Jones, the company president, has heard that there are multiple breakeven points for every product. She does not believe this and has asked you to provide the evidence of such a possibility. Some information about the company for 2017 is as follows:
Total fixed manufacturing overhead $180,000
Total other fixed expenses $204,000
Total variable manufacturing expenses $250,000
Total other variable expenses $240,000
Units produced 60,000 units
Budgeted production 60,000 units
Units sold 50,000 units
Selling price $42
What are breakeven sales in units using absorption costing? (Round any intermediary calculations to the nearest cent and your final answer up to the next whole unit.)
A) 5,321 units
B) 5,393 units
C) 6,617 units
D) 11,350 units

$4,620,000
(Selling price per unit is $41 and the direct material costs is $8. Under throughput costing, contribution is calculated by deducting direct materials cost from the sale amount, the throughput contribution, in this case, is $33. Total throughput contribution for 140,000 units sold is [140,000 × $33 = $4,620,000])

Glossier Images Inc., produces decorative statues. Management has provided the following information:

Actual sales 35,000 statues
Budgeted production 54,000 statues
Selling price $46 per statue

Direct material costs $7.10 per statue
Variable manufacturing costs $3.65 per statue
Variable administrative costs $5.85 per statue
Fixed manufacturing overhead $4.80 per statue

What is the total throughput contribution?
A) $2,100,600
B) $1,233,750
C) $1,361,500
D) $1,029,000

Revenues (2,500 × $925) $2,312,500
Variable costs
Beginning inventory $ 0
Variable manufacturing costs (3,000 × $385) 1,155,000
Cost of goods available 1,155,000
Deduct ending inventory ( 500 × $385) (192,500)
Variable cost of goods sold 962,500
Variable operating costs (2,500 × $312.50) 781,250
Total variable costs 1,743,750
Contribution margin 568,750
Fixed costs
Fixed manufacturing costs 450,000
Fixed operating costs 75,000
Total fixed costs 525,000
Operating income $ 43,750

The 10,000 units in inventory being assigned fixed manufacturing costs cause the operating income difference. The fixed manufacturing cost assigned to the inventory is carried into the next month. The fixed costs per unit were $10 per unit ($400,000/40,000), therefore, $100,000 (10,000 × $10) were carried into February.

Variable costing helps avoid confusion by relating variations in expenses to sales rather than to inventory fluctuations. Under variable costing, the total fixed amount ($400,000) would be expensed in January and none carried forward into February. Therefore, January's income would be $100,000 less than reported and February's $100,000 more than reported.

7,374 units
(Standard fixed manufacturing cost is $49 and hence the total fixed manufacturing cost is $686,000 ($49 × 14,000 units). Fixed selling and administrative overhead is $44,000. Therefore, the total fixed expense is $730,000 ($686,000 + $44,000). The contribution per unit is $99 ($110 - $8 - $3). Therefore, the breakeven point in units is 7,374 units ($730,000 / $99).)

For 2017, Rockford, Inc., had sales of 150,000 units and production of 200,000 units. Other information for the year included:

Direct manufacturing labor $197,500
Variable manufacturing overhead 100,000
Direct materials 160,000
Variable selling expenses 100,000
Fixed administrative expenses 100,000
Fixed manufacturing overhead 250,000

There was no beginning inventory.
(Compute the ending finished goods inventory under both absorption and variable costing.)

For 2017, Rockford, Inc., had sales of 150,000 units and production of 200,000 units. Other information for the year included:

Direct manufacturing labor $197,500
Variable manufacturing overhead 100,000
Direct materials 160,000
Variable selling expenses 100,000
Fixed administrative expenses 100,000
Fixed manufacturing overhead 250,000

There was no beginning inventory.
(Compute the cost of goods sold under both absorption and variable costing.)

$56,080
(Total sales = $98.00 x $1,800 = $176,400; Total variable costs = ($22.00 x $1,800) + ($3.90 x $1,800) = $46,620; Contribution margin = $176,400 - $46,620 = $129,780; The fixed costs component = (2,200 units × ($14 + $19.50) = $73,700; Therefore, the operating income under variable costing = $129,780 - $73,700 = $56,080)

Ms. Sophia Jones, the company president, has heard that there are multiple breakeven points for every product. She does not believe this and has asked you to provide the evidence of such a possibility. Some information about the company for 2017 is as follows:

Total fixed manufacturing overhead $185,000
Total other fixed expenses $202,000
Total variable manufacturing expenses $290,000
Total other variable expenses $250,000
Units produced 70,000 units
Budgeted production 70,000 units
Units sold 50,000 units
Selling price $42

What are breakeven sales in units using variable costing? (Round any intermediary calculations to the nearest cent and your final answer up to the next whole unit.)
A) 12,404 units
B) 6,383 units
C) 11,287 units
D) 10,223 units

$124,200
(Total sales = $98.00 × 1,800 = $176,400; Variable cost of goods sold = $23.00 × 1,800 = $41,400; Variable marketing costs = $6.00 × 1,800 = $10,800; Total variable costs = $52,200; Contribution margin = $176,400 - $52,200 = $124,200)