Assignment: Principles of Managerial Accounting
Richardson Corporation plans to increase its advertising budget by 20% next year. The company currently spends $15,000 on advertising costs. In addition to advertising, Richardson spends $50,000 per year for other fixed costs and $10 per unit for variable costs. If Richardson anticipates producing 30,000 units next year, what will be next year's total costs?
A. Calculate total estimated costs for next year.
Preferred Products has the following cost information available for 2012:
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Direct materials
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$4.00 per unit
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Direct labor
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$3.00 per unit
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Variable manufacturing overhead
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$2.00 per unit
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Variable selling and administrative costs
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$1.00 per unit
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Fixed manufacturing overhead
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$25,000
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Fixed selling and administrative costs
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$10,000
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During 2012, Preferred produced 5,000 units out of which 4,600 units were sold for $30 each.
2. Calculate Preferred's net operating income assuming the company uses variable costing.
3. Calculate Preferred's net operating income assuming the company uses absorption costing.
You can earn a maximum of 75 points for the entire Complete section assignment in each of the five units. The Complete section is due each Sunday at midnight. Complete responses should meet or exceed the required word count if applicable. The minimum word count will need to exceed 150 words for each question unless otherwise stated. You must show your work if the question required a numerical answer.