Greek Manufacturing Company produces and sells a line of product that are sold usually all year round. The company has a maximum production capacity of 100,000 units per year. Operating at normal capacity, the business earned Operating Income of $600,000 in 2020. The following cost data has been prepared for the year ended December 31, 2020.Selling price per unit………………………………………$50.00 Production Costs: Direct Materials ………………………………….$10.00 Direct Labour …………………………………….$8.00 Variable Manufacturing Overhead …………….$7.00Fixed Manufacturing Overhead…………..................$450,000Fixed Selling & Administrative Expenses……………… $300,000Variable selling expense per unit ………………………. $10.00Required:a) Using the equation method, calculate the normal capacity of the business. b) Calculate:i) the variable production cost per unitii) the total production cost per unitiii) The total variable cost per unitiv) Total Fixed Costs

Maximum Production Capacity 100000 Units Per Unit Sales 50 Production Cost…

Answered: Greek Manufacturing Company produces…

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter7: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 46E: Lotts Company produces and sells one product. The selling price is 10, and the unit variable cost is...

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Greek Manufacturing Company produces and sells a line of product that are sold usually all year round. The company has a maximum production capacity of 100,000 units per year. Operating at normal capacity, the business earned Operating Income of $600,000 in 2020. The following cost data has been prepared for the year ended December 31, 2020.

Selling price per unit………………………………………	$50.00
Production Costs:
Direct Materials ………………………………….	$10.00
Direct Labour …………………………………….	$8.00
Variable Manufacturing Overhead …………….	$7.00
Fixed Manufacturing Overhead…………..................	$450,000
Fixed Selling & Administrative Expenses………………	$300,000
Variable selling expense per unit ……………………….	$10.00

Required:
a) Using the equation method, calculate the normal capacity of the business.
b) Calculate:
i) the variable production cost per unit
ii) the total production cost per unit
iii) The total variable cost per unit
iv) Total Fixed Costs

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