The following data apply to the provision of psychological t

The following data apply to the provision of psychological testing services Sales price per unit (1 unit = 1 test plus feedback to client) Fixed costs (per month): 350 Selling and administration Production overhead (e.g., rent of testing facilities) 16,000 17,500 Variable costs (per test): 145 15 Labor for oversight and feedback Outsourced test analysis Materials used in testing Production overhead Selling and administration (e.g., scheduling and billing) 14 Number of tests per month 2,000 tests Required Calculate the amount for each of the following (one unit one test) if the number of tests is 2,000 per month. Also calculate if the number of tests decreases to 1,250 per month. round intermediate calculations. Round your final answers to the nearest whole dollar.) 2,000 Tests 1,250 Tests a. Variable production cost per unit b. Variable cost per unit. c. Full cost per unit. d. Full absorption cost per unit e. Prime cost per unit. f. Conversion cost per unit g. Contribution margin per unit. h Gross margin per unit.

Solution

Answer a. 2,000 Tests 1,250 Tests Variable Production Cost per Unit: Labor for oversight and feedback             145.00             145.00 Outsourced test analysis               15.00               15.00 Material used in testing                  6.00                  6.00 Production Overhead               14.00               14.00 Toatl Variable Prouction Cost per Unit             180.00             180.00 Answer b. 2,000 Tests 1,250 Tests Variable Cost per Unit: Labor for oversight and feedback             145.00             145.00 Outsourced test analysis               15.00               15.00 Material used in testing                  6.00                  6.00 Production Overhead               14.00               14.00 Selling And and administration (e.g., scheduling and billing)               11.00               11.00 Toatl Variable Prouction Cost per Unit             191.00             191.00 Answer c. Full Cost per Unit: 2,000 Tests 1,250 Tests Variable Cost per Unit: Labor for oversight and feedback             145.00             145.00 Outsourced test analysis               15.00               15.00 Material used in testing                  6.00                  6.00 Production Overhead               14.00               14.00 Selling And and administration (e.g., scheduling and billing)               11.00               11.00 Toatl Variable Prouction Cost per Unit             191.00             191.00 Fixed Costs: Selling And and administration                  8.00               12.80 Production Overhead                  8.75               14.00 Total Fixed Costs per Units               16.75               26.80 Full Cost per Unit             207.75             217.80 Fixed Selling & Administration 2,000 Tests - $16,000 / 2,000 Units                  8.00 1,250 Tests - $16,000 / 1,250 Units               12.80 Fixed Production Overhead 2,000 Tests - $17,500 / 2,000 Units                  8.75 1,250 Tests - $17,500 / 1,250 Units               14.00 Answer d. Full Absorption Cost per Unit: 2,000 Tests 1,250 Tests Variable Cost per Unit: Labor for oversight and feedback             145.00             145.00 Outsourced test analysis               15.00               15.00 Material used in testing                  6.00                  6.00 Production Overhead               14.00               14.00 Fixed Production Overhead                  8.75               14.00 Full Absorption Cost per Unit             188.75             194.00 Fixed Production Overhead 2,000 Tests - $17,500 / 2,000 Units                  8.75 1,250 Tests - $17,500 / 1,250 Units               14.00 Answer e. Prime Cost per Unit: 2,000 Tests 1,250 Tests Variable Cost per Unit: Labor for oversight and feedback             145.00             145.00 Outsourced test analysis               15.00               15.00 Material used in testing                  6.00                  6.00 Full Absorption Cost per Unit             166.00             166.00 Answer f. Conversion Cost per Unit: 2,000 Tests 1,250 Tests Variable Cost per Unit: Labor for oversight and feedback             145.00             145.00 Outsourced test analysis               15.00               15.00 Production Overhead               14.00               14.00 Fixed Production Overhead                  8.75               14.00 Full Absorption Cost per Unit             182.75             188.00 Fixed Production Overhead 2,000 Tests - $17,500 / 2,000 Units                  8.75 1,250 Tests - $17,500 / 1,250 Units               14.00 Answer g. 2,000 Tests 1,250 Tests Sales price per Unit             350.00             350.00 Variable Cost per Unit: Labor for oversight and feedback             145.00             145.00 Outsourced test analysis               15.00               15.00 Material used in testing                  6.00                  6.00 Production Overhead               14.00               14.00 Selling And and administration (e.g., scheduling and billing)               11.00               11.00 Toatl Variable Prouction Cost per Unit             191.00             191.00 Contribution per Unit             159.00             159.00 Answer h. Full Absorption Cost per Unit: 2,000 Tests 1,250 Tests Sales price per Unit             350.00             350.00 Less: Full absorption Cost per Unit             188.75             194.00 Gross Margin per Unit             161.25             156.00