Gerstein Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-h
1 answer:
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Answer:
$1,330,102.50
Explanation:
first unit produced by lambda took 5,000 hours to produce and required $250,000 worth of material, equipment usage, and supplies
the second unit took 3,250 hours and used $187,500 worth of materials, equipment usage, and supplies
learning rate = time needed to produce second unit / time needed to produce first unit = 3,250 hours / 5,000 hours = 65%
materials and equipment usage rate = $187,500 / $250,000 = 75%
using the attached table of cumulative values, we can determine the cumulative improvement factors needed to solve this question:
Lambda's accumulated cost for producing 10 more computers
- work hours = 3,250 x 4.341 (65% and 10 units) x $20 per hour = $282,165
- materials and equipment = $187,500 x 5.589 (75% and 10 units) = $1,047,937.50
- total = $282,165 + $1,047,937.50 = $1,330,102.50
