Accounting Class

400 words per question, 3 scholarly sources -APA cited, NO PLAGERISM !!!!

Richardson Corporation plans to increase its advertising budget by 20% next year. The company currently spends $15,000 on advertising costs. In addition to advertising, Richardson spends $50,000 per year for other fixed costs and $10 per unit for variable costs. If Richardson anticipates producing 30,000 units next year, what will be next year’s total costs?

  • 1.. Calculate total estimated costs for next year.
  • 2. Calculate Preferred’s net operating income assuming the company uses variable costing.
  • 3. Calculate Preferred’s net operating income assuming the company uses absorption costing.

Preferred Products has the following cost information available for 2012:

Direct materials

$4.00 per unit

Direct labor

$3.00 per unit

Variable manufacturing overhead

$2.00 per unit

Variable selling and administrative costs

$1.00 per unit

Fixed manufacturing overhead

$25,000

Fixed selling and administrative costs

$10,000

During 2012, Preferred produced 5,000 units out of which 4,600 units were sold for $30 each.

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