The following information applies to the questions displayed below.
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Far North Telecom, Ltd., of Ontario, has organized a new division to manufacture and sell specialty cellular telephones. The division's monthly costs are shown below:
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| Manufacturing costs: |
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| Variable costs per unit: |
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| Direct materials |
$84 |
| Variable manufacturing overhead |
$4 |
| Fixed manufacturing overhead costs (total) |
$216,600 |
| Selling and administrative costs: |
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| Variable |
9% of sales |
| Fixed (total) |
$160,000 |
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Far North Telecom regards all of its workers as full-time employees and the company has a long-standing no layoff policy. Furthermore, production is highly automated. Accordingly, the company includes its labor costs in its fixed manufacturing overhead. The cellular phones sell for $290 each. During September, the first month of operations, the following activity was recorded:
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| Units produced |
3,800 |
| Units sold |
3,000 |
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