Bus 630 Week 3 Dq 1 Fixed Labor

BUS 630 Week 3 DQ 1 Fixed Labor
To Buy This material Click below link
Far North Telecom, Ltd., of Ontario, has organized a new division to manufacture and sell specialty cellular telephones.  The division’s monthly costs are shown in the table below.  Far North Telecom regards all of its workers as full-time employees and the company has a long-standing no layoff policy.  Furthermore, production is highly automated.  Accordingly, the company includes its labor costs in its fixed manufacturing overhead.  The cellular phones sell for $150 each.  During September, the first month of operations, the following activity was recorded: 12,000 units produced, 10,000 units sold.  Comment on the five questions below the table.  Respond to at least two of your fellow students’ postings.
Manufacturing costs: | |
Variable costs per unit: | |
Direct Materials | $48 |
Variable manufacturing overhead | $2 |
Fixed manufacturing overhead costs (total) | $360,000 |
Selling and administration costs: | |
Variable | 12% of sales |
Fixed (total) | $470,000 |
a.  Compute the unit product cost under:
i.  absorption costing
ii.  variable costing
b.  Prepare an absorption costing income statement for September
c.  Prepare a contribution format income statement for September using variable costing.
d.  Assume that the company must obtain additional financing in order to continue operations.  As a member of top management, would you prefer to rely n the statement in (b) above or in (3) above when meeting with a group of prospective investors?
e.  Reconcile the absorption costing and variable costing net operating incomes in (2) and (3) above.
For more Assignments visit: