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slava [35]
3 years ago
15

For​ 2018, Winters Manufacturing uses machineminushours as the only overhead costminusallocation base. The direct cost rate is $

6 per unit. The selling price of the product is $ 21. The estimated manufacturing overhead costs are $ 275 comma 000 and estimated 40 comma 000 machine hours. The actual manufacturing overhead costs are $ 350 comma 000 and actual machine hours are 50 comma 000. What is the profit margin earned if each unit requires two machineminus​hours?
Business
1 answer:
Eva8 [605]3 years ago
7 0

Answer:

Profit margin per unit= $1.25

Explanation:

Giving the following information:

The direct cost rate is $ 6 per unit.

The selling price of the product is $ 21.

Estimated manufacturing overhead= $275,000

Estimated machine-hours= 40,000

Actual machine hours are 50,000

First, we need to calculate the predetermined overhead rate:

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined manufacturing overhead rate= 275,000/40,000= $6.875 per machine hour

Now, we can allocate overhead:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 6.875*2= $13.75

Finally, the profit margin:

Profit margin per unit= 21 - 6 - 13.75= $1.25

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Explanation:

Crater Corp. will be bound to the contract since Bo Borg has the apparent authority as the acting Vice President of purchasing. Even though he went over the agreed amount that was over 2 million in the contract. Since the Shady company was unaware that he had exceeded his authority the contract will stay in place. If Shady company had of known that he did not have the final say and needed approval the result of the transaction would of been different.

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Answer:

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