Question Description
400 words per question, 3 scholarly sources -APA cited, NO PLAGERISM !!!!
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?
- 1.. Calculate total estimated costs for next year.
- 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.
Preferred Products has the following cost information available for 2012:
|
Direct materials |
$4.00 per unit |
|
Direct labor |
$3.00 per unit |
|
Variable manufacturing overhead |
$2.00 per unit |
|
Variable selling and administrative costs |
$1.00 per unit |
|
Fixed manufacturing overhead |
$25,000 |
|
Fixed selling and administrative costs |
$10,000 |
During 2012, Preferred produced 5,000 units out of which 4,600 units were sold for $30 each.
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