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USPshnik [31]
3 years ago
7

Flawless Cosmetic Company manufactures and distributes several different products. The company currently uses a plantwide alloca

tion method for allocating overhead at a rate of $6 per direct labor hour. Loren is the department manager of the Makeup Department which produces Products – Concealer (C) and Glow Cream (GC). Jennifer is the department manager of the Hair Care Department which manufactures Product – Shampoo (S). The product costs (per case of 24 bottles) and other information are as follows: Products C GC S Direct materials $ 90.00 $ 80.00 $ 42.00 Direct labor 50.00 30.00 15.00 Overhead 20.00 25.00 17.00 $160.00 $135.00 $74.00 Machine hours 5 3 4 Number of cases (per year) 350 550 650 If Flawless changes its allocation basis to machine hours, what is the total product cost per case for Product GC? a. $166.80 b. $156.20 c. $150.90 d. $125.90
Business
1 answer:
IgorC [24]3 years ago
4 0

Answer:

Option (D) is correct.      

Explanation:

Total Overhead Cost:

= (Overhead × Number of cases) for all products

= (20 × 350) + (25 × 550) + (17 × 650)

= 31,800

Total Machine Hours:

= Machine hours × Number of cases

= (5 × 350) + (3 × 550) + (4 × 650)

= 6,000

Overhead Rate:

= Total Overhead Cost ÷ Total Machine Hours

= 31,800 ÷ 6,000

= 5.30

Total product cost per case for Product GC:

= Direct Material + Direct Labor + Overhead

= 80 + 30 + (Machine hours × Overhead Rate)

= 80 + 30 + (3 × 5.3)

= 80.00 + 30.00 + 15.90

= $125.90

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4 0
10 months ago
Equipment originally costing $100,000 has accumulated depreciation of $65,000. if it is sold for $40,000, the company should rec
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Hi there
What we need first is the book value of the equipment
The book value is
originally costing - accumulated depreciation
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Good luck!

4 0
3 years ago
In building a sustainable organization, management should strive to make the organization sustainable in three areas ? ________.
DochEvi [55]
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5 0
3 years ago
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A firm has three different production facilities, all of which produce the same product.. While reviewing the firm's cost data,
Valentin [98]

<u>Joshua is right because fixed costs are unavoidable but marginal costs are not.</u>

<u>Explanation</u>:

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In the above scenario, Jasmine and Joshua were discussing about the cost of the products that are produced in their manufacturing plants. They were discussing about the marginal cost and fixed cost.

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2 years ago
You can purchase an item you need for a project for $10,000 and it has daily operating costs of $500, or you can lease the item
aleksandr82 [10.1K]

Answer:

On the 50th day, the purchase cost will be equal to the lease cost

Explanation:

Given that:

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Let x is the number of days the purchase cost be the same as the lease cost. As we now that:

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Hence, on the 50th day, the purchase cost will be equal to the lease cost

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