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Nashler Company has the following budgeted variable costs per unit produced: Budgeted fixed overhead costs per month include supervision of $98,000, depreciation of $76,000, and other overhead of $245,000. Required: 1. Prepare a flexible budget for all costs of production for the following levels of production: 160,000 units, 170,000 units, and 175,000 units. 2. What is the per-unit total product cost for each of the production levels from Requirement 1? (Round each unit cost to the nearest cent.) 3. What if Nashler Company’s cost of maintenance rose to $0.22 per unit? How would that affect the unit product costs calculated in Requirement 2?

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Cornerstones of Cost Management (C...

4th Edition
Don R. Hansen + 1 other
Publisher: Cengage Learning
ISBN: 9781305970663

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Chapter
Section
BuyFindarrow_forward

Cornerstones of Cost Management (C...

4th Edition
Don R. Hansen + 1 other
Publisher: Cengage Learning
ISBN: 9781305970663
Chapter 8, Problem 13CE
Textbook Problem
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Nashler Company has the following budgeted variable costs per unit produced:

Chapter 8, Problem 13CE, Nashler Company has the following budgeted variable costs per unit produced: Budgeted fixed overhead

Budgeted fixed overhead costs per month include supervision of $98,000, depreciation of $76,000, and other overhead of $245,000.

Required:

  1. 1. Prepare a flexible budget for all costs of production for the following levels of production: 160,000 units, 170,000 units, and 175,000 units.
  2. 2. What is the per-unit total product cost for each of the production levels from Requirement 1? (Round each unit cost to the nearest cent.)
  3. 3. What if Nashler Company’s cost of maintenance rose to $0.22 per unit? How would that affect the unit product costs calculated in Requirement 2?

1.

To determine

Prepare a flexible budget for all costs of production for the given levels of production.

Explanation of Solution

Flexible Budget: A flexible budget is a budget that is prepared for various levels of the output.

  • It is a budget for various level of activity.
  • It is a budget for actual level of activity...

2.

To determine

Calculate the per-unit total product cost for each of the production levels.

3.

To determine

Explain how the increase in maintenance cost ($0.22) per unit affects the per unit product cost calculated in requirement 2.

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Chapter 8 Solutions

Cornerstones of Cost Management (Cornerstones Series)
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