Praying - I haven't fully understand the concept yet, but I
think this has to do with mamufactured units (120,000) sale units
(110,000). Therefore, the fixed cost of 0.25 needs to be allocated
to the ending balance instead of sale cost. 10,000 * 0.25 = 2,500
needs to subtracted from the total manufactured cost of $25,000.
So, the total fixed manufactured cost is $22,500. Sale: 550,000
Var. Cost (330,000) fix Manu OH (22,500) fix selling Cost (65,000)
= $132,500 Someone please let me know if my explaination is
correct.
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