Answer:
OVERHEAD APPLIED USING DIRECT LABOR
Stamping // Labor Hours // Applied Overhead
bumpers 590 $ 76,700
Valve 310 $ 40,300
Wheels 350 $ 45,500
1250 $ 162,500
Planting // Labor Hours // Applied Overhead
bumpers 195 $25,350
Valve 200 $26,000
Wheels 195 $25,350
590 $76,700
OVERHEAD APPLIED USING MACHINE HOURS
Stamping // Machine Hours // Applied Overhead
bumpers 810 $42,120
Valve 570 $29,640
Wheels 620 $32,240
2000 $104,000
Planting // Machine Hours // Applied Overhead
bumpers 1150 $59,800
Valve 700 $36,400
Wheels 750 $39,000
2600 $135,200
Explanation:
As the overhead rate using labor hours is $130 Then:
<u>Total expected overhead:</u> $130 x 1,840 labor hours = $239,200
Machine Hours overhead rate:
$ 239,200 / 4,600 hours = $52
To get the amount of overhead applied on each product we multiply their use of the cost drive by the overhead rate.
Answer:
a) EOQ = √[(2 x S x D) / H]
- S = order cost = $21
- D = annual demand = 930 x 12 = 11,160
- H = annual holding cost = $35 x 28% = $9.80
EOQ = √[(2 x $21 x 11,160) / $9.80] = 218.7 ≈ 219 shoes
b) total ordering costs = (11,160 / 219) x $21 = $1,070.14
total holding costs = $9.80 x (219 / 2) = $1,073.10
total purchases = $35 x 11,160 = $390,600
total inventory costs = $392,743.24
c) The EOQ model faces two main problems:
- first, it assumes that the demand is constant and can be predicted with 100% accuracy and that is not usually the case. Also, demand might be seasonal which makes the EOQ model useless.
- second, it assumes costs are constant and they are generally not, e.g. the price of shoes might change
Answer:
Horizontal
Explanation:
Increasingly commonplace today is the appearance of two different franchise chains under the same roof, such as Pizza-Hut and Taco Bell. This is an example of a horizontal marketing system.