Clear company reports the following information for its first year of operations: units produced this year 50,000 units units sold this year 49,000 units direct materials $7 per unit direct labor $3 per unit variable overhead $210,000 in total fixed overhead ? in total if the company's cost per unit of finished goods using absorption costing is $19.30, what is total fixed overhead?

$255,000

Explanation:

Total excluding fixed overhead:

= Direct materials + Direct labor + Variable overhead

= $7 + $3 + ($210,000 ÷ 50,000)

= $7 + $3 + $4.2

= $14.2

Total cost per unit of finished goods = $19.3

Fixed overhead per unit:

= Total cost per unit of finished goods - Total excluding fixed overhead

= $19.3 - $14.2

= $5.1 per unit

Total fixed overhead:

= Units produced × Fixed overhead per unit

= 50,000 × $5.1

= $255,000

Explanation:

The question is not complete. The company's cost per unit of finished goods was not added in the given data. The solution below is for $19.30 of company's cost per unit. The formula used is applicable to any unit cost given to you.

The answer is option (B)  $255,000

Explanation:

Solution:

Given Data;

Units of goods Produced = 50,000

Units of goods sold = 49,000

Direct materials = $7

Direct labor = $3

Variable overhead = $210,000

Cost per unit of finished goods $19.30 ( added value)

Step 1: Calculating the total excluding fixed overhead;

Substituting the given values into equation 1, we have

Total excluding fixed overhead = (210,000/50000) + 7 + 3

                                                    = 4.2 +7+3

                                                    =$14.2

Step 2: Calculating fixed overhead of company's per unit goods;

Fixed overhead per unit= Total cost per unit of finished goods - Total    

                                              excluding fixed overhead 2

Substituting into equation 2, we have

 Fixed overhead per unit   = 19.3 -14.2

                                            = $5.1   ( for 1 unit)

 Step 3: Calculating the total fixed over head;  

 Total fixed overhead = Units produced × Fixed overhead per unit3

Substituting into equation 3, we have

Total fixed overhead   = 50,000 × 5.1

                                       = $255,000

answer; (identity theft);

whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

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