Abba, Inc. has developed the following standards for one of its products: Direct materials - 1/2 pound at $6.00 per pound Direct
labor - 1/4 hour at $20.00 per hour Variable overhead - 20% of direct labor cost Total fixed overhead is expected to be $15,000 and the company expects to produce 7,500 units. The standard cost card for this product would show a cost per unit of ______. $11.00 $8.00 $13.00 $9.00
1 answer:
Answer:
The answer is $11 per unit.
The standard cost card for this product would show a cost per unit of $11.
Explanation:
The workings are attached.
The formula used is as follows:
<u>Standard cost per unit of a product = direct material per unit + direct labor per unit + variable overhead per unit + fixed overhead per unit.</u>
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The cars should be rented at $34 per day for a maximum income of $6268 per day.
If the daily rental is increased by $x
<u>Then </u>
Rental: R(x)=(28+x)dollars per car-day
Number of cars rented:
N(x) = (220−6x) and Income: I(x) = (28+x) (220−6x) = 6,610 + 52x−5 dollars/day.
The maximum will be achieved when the derivative of I (x) is zero.
= 52−10x = 0
⇒ x = 5.2
For an even dollar rental amount, and increase of $5/day or $6/day will generate the same income.
So
$28+$5 = $33/day
or
$28+$6 = $34/day
would both be valid answers.
However, $34/day involves renting fewer cars and thus reduced expenses.
Using basic substitution and arithmetic
I(4) = $6,268
<h3>What is Maximum revenue ?</h3>
Maximum revenue is defined as the total maximum amount of revenue of product or service can yield at maximum demand and price.
To calculate maximum revenue, determine the revenue function and then find its maximum value. Write a formula where p equals price and q equals demand, in the number of units.
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