Accounting homework problem
Revenue (14,000 units × $14.0)
Unit-level materials costs (14,000 units × $1.70)
Unit-level labor costs (14,000 units × $.60)
Unit-level overhead costs (14,000 × $.40)
Unit-level selling expenses (14,000 × $.20)
Skin cream production supervisor’s salary
Allocated portion of facility-level costs
Product-level advertising cost
Contribution to companywide income
Calculate the total avoidable costs.
Calculate the total avoidable cost per unit.
Should Seymour continue to make the product or buy it from the supplier?
Suppose that Seymour is able to increase sales by 10,000 units (sales will increase to 24,000 units). Calculate the total avoidable costs.
At this level of production, should Seymour make or buy the cream?
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Seymour Chemical Company makes a variety of cosmetic products, one of which is a skin cream designed to reduce the signs of aging. Seymour produces a relatively small amount (14,000 …