( TCO 3 ) During March , the varnishing department incurred costs of $ 90,250 for direct labor . The beginning inventory was 3,500 units and 10,000 units were transferred to the varnishing department from the sanding department during June . The direct labor cost in the beginning inventory was $ 27,270 . The ending inventory consisted of 2,000 units , which were 25 % complete with respect to direct labor . What is the cost per equivalent unit for direct labor ? 13 . Question : ( TCO 4 ) Clearance Depot has total monthly costs of $ 8,000 when 2,500 units are produced and $ 12,400 when 5,000 units are produced . What is the estimated total monthly fixed cost ? 1 . Question : ( TCO 4 ) The margin of safety is the difference between 2 . Question : ( TCO 4 ) Allen Company sells homework machines for $ 100 each . Variable costs per unit are $ 75 and total fixed costs are $ 62,000 . Allen is considering the purchase of new equipment that would increase fixed costs to $ 84,000 , but decrease the variable costs per unit to $ 60 . At that level Allen Company expects to sell 3,000 units next year . What is Allen ’ s break-even point in units if it purchases the new equipment ? 3 . Question : ( TCO 4 ) Paula Corporation sells a single product at a price of $ 275 per unit . Variable cost per unit is $ 135 and fixed costs total $ 356,860 . If sales are expected to be $ 825,000 , what is Paula ’ s margin of safety ? 4 . Question : ( TCO 5 ) In variable costing , when does fixed manufacturing overhead become an expense ? 5 . Question : ( TCO 5 ) Variable costing income is a function of : 6 . Question : ( TCO 5 ) Peak Manufacturing produces snow blowers . The selling price per snow blower is $ 100 . Costs involved in production are : Direct Material per unit $ 20 Direct Labor per unit 12