Variable Input Fixed Input Output Marginal Physical Product of Variable Input Total Fixed Cost Total Variable Cost Marginal Cost
(units) (units) (units) (units) (dollars) (dollars) (dollars) 0 1 0 $500 $0 1 1 10 (A) $500 $200 (F) 2 1 25 (B) $500 $400 (G) 3 1 45 (C) $500 $600 (H) 4 1 60 (D) $500 $800 (I) 5 1 70 (E) $500 $1000 (J) Refer to Exhibit 21-3. What is the average total cost of producing 60 units of output
1 answer:
Answer:
$21.67
Explanation:
Exhibit 21-3 is attached with the answer .Please find it.
Total cost of production includes the fixed cost and variable cost. Fixed Cost remains constant as $500 in the exhibit, but the variable cost changes with each production level.
Cost of producing 60 units
Variable cost = $800
Fixed cost = $500
Total cost = $800+500 = $1,300
Product cost per unit = Total cost / numbers of unit = $1,300 / 60 = $21.67
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Answer:
overhead rate: $3 per labor hours
Appled overhead for January 25,050 dollars
Applied overhead: 268,800 dollar underapplied by 7,200 dollars
Explanation:
expected overhead: 270,000
cost driver: labor hours.
expected labor hours: 90,000
overhead rate: 270,000 / 90,000 = 3
<u>Applied overhead for January</u>
8,350 labor hours x $3 overhead rate = 25,050
for the year:
89,600 x $ 3 = 268,800
actual overhead 276,000
Difference: 7,200
As the actual cost were higher; the overhead was underapplicated.
we need to capitalize more cost.