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ACCT 386 - Week 7 - Homework - Question 4

ACCT 386 - Week 7 - Homework - Question 4
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ACCT 386 - Week 7 - Homework - Question 4

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Question 4

Pietarsaari Oy, a Finnish company, produces cross-country ski poles that it sells for €32 a pair. (The Finnish unit of currency, the euro, is denoted by €.) Operating at capacity, the company can produce 55,000 pairs of ski poles a year. Costs associated with this level of production and sales are given below:

 

Per Pair

Total

  Direct materials

11  

 

605,000  

  Direct labor

 

3  

 

 

165,000  

  Variable manufacturing overhead

 

1  

 

 

55,000  

  Fixed manufacturing overhead

 

4  

 

 

220,000  

  Variable selling expense

 

2  

 

 

110,000  

  Fixed selling expense

 

4  

 

 

220,000  

 






  Total cost

25  

 

1,375,000