Answer:
A. 1/3 computers
B. 0.6 computers
Explanation:
A. The opportunity cost incurred by the US to make cars is the number of computers it would have to give up to make a car.
The US can either make 12 cars or 4 computers. For every car made therefore the US forgoes;
= 4/12
= 1/3 computers.
B. The same logic applies to Japan. They can either make 10 cars or 6 computers.
Their opportunity cost for cars is therefore;
= 6/10
= 0.6 computers
Answer:
a. $17.44 per hour
b. $43,600 ; $104,640
Explanation:
The computation is shown below:
a. Single plantwide overhead rate equals to
= Total Overhead Amount ÷ Budgeted Direct Labor Hours
where,
Total overhead amount is
= $625,000 + $900,000 + $105,000 + $175,000 + $300,000 + $75,000
= $2,180,000
And, the budgeted direct labor hours is 125,000
So, the overhead rate is
= $2,180,000 ÷ 125,000
= $17.44 per hour
2. Now the overhead cost is
For Deluxe model
= 2,500 direct labor hours × $17.44 per hour
= $43,600
For basic model
= 6,000 direct labor hours × $17.44 per hour
= $104,640
When prototyping new products, most people will want a presentation on what the prototype will look like, the functions, the benefits, how it differs from previous products or other companies' products and the pricing. A management presentation is important because it should help break down all the information needed before approval of the new product is approved.
