Question

8.4 Harris Company manufactures a single product. Costs for the year 2015 for output levels of 1,000 and 2,000 units are given in Table P8.4. At each level of output, compute the following: a. Total manufacturing costs. b. Manufacturing costs per unit c. Total variable costs d. Total variable costs per unit e. Total costs that have to be recovered if the firm is to make a profit: Table P8.4 Units Produced 1,000 2,000 Direct labor $30,000 $60,000 Direct materials 20,000 40,000 Overhead: Variable portion 12,000 24,000 Fixed portion 36,000 36,000 Selling and administrative costs: Variable portion 5,000 10,000 Fixed portion 22,000 22,000

          8.4 Harris Company manufactures a single product. Costs for the year 2015 for output levels of 1,000 and 2,000 units are given in Table P8.4. At each level of output, compute the following: a. Total manufacturing costs. b. Manufacturing costs per unit c. Total variable costs d. Total variable costs per unit e. Total costs that have to be recovered if the firm is to make a profit:

Table P8.4
Units Produced
1,000
2,000
Direct labor
$30,000
$60,000
Direct materials
20,000
40,000
Overhead:
Variable portion
12,000
24,000
Fixed portion
36,000
36,000
Selling and administrative costs:
Variable portion
5,000
10,000
Fixed portion
22,000
22,000

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Added by Brianna H.

Horngren’s Cost Accounting

Srikant M. Datar, Madhav V. Rajan 16th Edition

Instant Answer

Solved by Expert Kevra Barney

03/31/2022

Step 1

Total manufacturing costs: To calculate the total manufacturing costs, we need to add up the direct labor, direct materials, overhead (variable portion), and overhead (fixed portion) costs. For 1,000 units: Total manufacturing costs = Direct labor + Direct Show more…

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8.4 Harris Company manufactures a single product. Costs for the year 2015 for output levels of 1,000 and 2,000 units are given in Table P8.4. At each level of output, compute the following: a. Total manufacturing costs. b. Manufacturing costs per unit c. Total variable costs d. Total variable costs per unit e. Total costs that have to be recovered if the firm is to make a profit: Table P8.4 Units Produced 1,000 2,000 Direct labor $30,000 $60,000 Direct materials 20,000 40,000 Overhead: Variable portion 12,000 24,000 Fixed portion 36,000 36,000 Selling and administrative costs: Variable portion 5,000 10,000 Fixed portion 22,000 22,000

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Transcript

00:01 Okay, so this question gives us a lot of data and i'm not going to rewrite the table.

00:10 So we're just going to jump right into what the question is asking.

00:18 So part a is asking for total manufacturing costs.

00:24 So i'm going to abbreviate total manufacturing costs.

00:33 And it wants for each output.

00:39 So we're going to do for the $1 ,000 output, or sorry, 1 ,000 unit output and the 2 ,000 unit output.

00:49 So when we talk about total manufacturing costs, we're talking about everything related to manufacturing the product.

00:57 So of the items listed in this table, the ones that do not apply are selling an admin costs, the variable portion, and the figure.

01:06 Portion.

01:08 So if we add up all the other costs, direct labor, direct materials, variable overhead, and fixed overhead, that that is where we'll get our total manufacturing costs, which for 1 ,000 units was $598 ,000.

01:27 So $598 ,000.

01:31 And for 2 ,000 units, is $660 ,000.

01:39 So again, i added together direct labor, direct materials, variable overhead, fixed overhead to get that number for each output.

01:50 The second item it asks for is manufacturing costs per unit.

01:56 So, and what we're doing here for 1 ,000 and 2 ,000 is we are just dividing these numbers by, the number of units produced...

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