1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Nataly_w [17]
3 years ago
8

PA1.

Business
1 answer:
kolezko [41]3 years ago
6 0

Question: Colonels uses a traditional cost system and estimates next years overhead will be $480,000, with the estimated cost driver of 240,000 direct labor hours. It manufactures three products and estimates these costs:

                                          Small       Medium     Large

Units                                 32,000       12,000      4,000

Direct Material cost             $5              $8            $9

Direct Labor Hrs / Unit       4 Hrs         6 Hrs       10 Hrs

If the labor rate is $25 per hour, what is the per-unit cost of each product?

Answer:

Step 1: Identify Absorption Basis

Here, absorption basis is Labor hours.

Step 2: Find the Overhead Absorbed Rate by dividing total Overhead by total absorption basis.

The formula is as under:

Overhead Absorbed=Total Overhead / Total Absorption Basis... Equation 1

By putting values in Equation 1:

Overhead absorption Rate OAR =$480,000 / 240,000 Machine Hrs = $2 per Labor hour

Step 3: Now calculate overhead per unit for product Small, Medium and Large by simply multiplying OAR with Direct Labor hours consumed per unit

Overhead per unit for Product X= OAR * Direct Labor hours consumed per Product X....................Equation 2

Now simply put the values in Equation 2 of direct labor used by each product and calculate Overhead per unit.

For Product Small:

Overhead per unit for Product Small=  $2 * 4 direct labor hours= $8 per unit

For Product Medium:

Overhead per unit for Product Medium=  $2 * 6 direct labor hours= $12 per unit

For Product Large:

Overhead per unit for Product Large=  $2 * 10 direct labor hours= $20 per unit

Step 4: Add the per unit prime cost to Overhead cost per unit calculated in the Step 3 to calculate the total unit cost of the product. Prime cost is the sum of all direct costs. In this question, Prime cost includes Direct labor cost and Direct material cost.

Now first of all find prime cost of each product by using following formula:

Prime cost per unit for Product X= (Direct material cost per unit of Product X) + (Direct labor cost per unit of Product X)............Equation 3

Thereafter add prime cost to overhead unit cost calculated in step 3.

For Product Small:

Prime cost per unit for Small= ($5 per unit) + ($25 per direct labor hour * 4 number of direct labor hours)=$5 per unit + $100 per unit= $125 per unit

Total Unit cost of product Small= Overhead cost per unit for Small + Prime cost per unit for Small =$125 per unit + $8 per unit=$133 per unit

For Product Medium:

Prime cost per unit for Medium= ($8 per unit) + ($25 per direct labor hour * 6 number of direct labor hours)=$5 per unit + $150 per unit= $155 per unit

Total Unit cost of product Medium= Overhead cost per unit for Medium + Prime cost per unit for medium =$155 per unit + $12 per unit=$167 per unit

For Product Large:

Prime cost per unit for Large= ($9 per unit) + ($25 per direct labor hour * 10 number of direct labor hours)=$9 per unit + $250 per unit= $259 per unit

Total Unit cost of product Large= Overhead cost per unit for Large + Prime cost per unit for Large =$259 per unit + $20 per unit=$279 per unit

You might be interested in
Which of the following would not be used to pay for previous credit purchases under the periodic system?
Cerrena [4.2K]
C. Credit to Accounts Payable
4 0
3 years ago
Read 2 more answers
"what advantage is the company experiencing by allowing angela to telecommute?"
wolverine [178]

Telecommuting is an alternate work place arrangement like work from home, library or any place very near to home.

By allowing Angela to telecommute, company is experiencing;

A. Increased productivity

Explanation:

A 2014 Stanford study says call centers employees who work from home increase productivity by 13%

B. Reduced Turnover.

Explanation:

Employee turnover is costly proposition. When employee will work from home he will be happier and not think to leave position which can cause an add up savings for employer for a long run

C. Increased Morale.

Explanation:

It is also a turn over for a company. Employee who works from home feels himself a valuable which increases his morale. Telecommuters tend less stress and much happier than office going workers.

D. Environmental Friendly.

Explanation:

Telecommuters don't take it as a work. They enjoy it as they are free of stress.

E. Economically sound

Explanation:

Its not only telecommuters who can take financially benefits but it is estimated that company can approximately save $11000 on each employee annually.


4 0
3 years ago
Uniform Supply accepted a $6,300, 90-day, 8% note from Tracy Janitorial on October 17. If the note is dishonored, but Uniform Su
Dovator [93]

Answer:

Debit Cash $6,426; credit Interest Revenue $21; credit Interest Receivable $105, redit Notes Receivable $6,300.

Explanation:

Based on the information given the appropriate journal entry that Uniform Supply should make on January 15 of the next year will be:

Debit Cash $6,426

($6300+$105+$21)

Credit Interest Revenue $21

($6300*8%*15/360)

Credit Interest Receivable $105

(6300*8%*75/360)

Credit Notes Receivable $6,300

6 0
3 years ago
In order to isolate a subset of records from an open form or datasheet that will be needed only temporarily, a set of criteria m
fgiga [73]
Filter is the answer!!!
7 0
3 years ago
Why might vertical systems be a business ethics issue? ?
DaniilM [7]
The answer to the question above is option C: they can result in a channel member having too much control. Firstly, we define what vertical system is. From the term itself vertical, the formation of the members is from top to bottom. Therefore, this includes the <span>producer, wholesaler, and retailer and this is where the distribution channel occurs. The reason why this kind of system is a business ethic issue is due to channel members that might have too much control because of their positions and unequal distribution of tasks. </span>
3 0
3 years ago
Other questions:
  • Use the following information.
    12·1 answer
  • Greg purchased 2,000 shares of common stock of the rite track corporation last year. he learned several months later that the st
    9·1 answer
  • Select the examples that best demonstrate likely employers for Design/Pre-Construction workers. Check all that
    5·2 answers
  • A monopolistically competitive firm is currently charging a price of $10 and producing 12,000 units/month. It faces monthly fixe
    15·1 answer
  • How should a destroyed check by recorded in a check register?
    10·1 answer
  • Clayton is asking his life insurance producer about any potential taxation issues related to his $100,000 personal Whole Life po
    10·1 answer
  • Single Plantwide Factory Overhead Rate The total factory overhead for Bardot Marine Company is budgeted for the year at $3,277,5
    9·1 answer
  • Claymore Corp. has the following information about its standards and production activity for September. The volume variance is:
    6·1 answer
  • I WILL GIVE BRAINLIEST!!!! How might a mixed economy guard against the risks and disadvantages associated with market and comman
    5·2 answers
  • How long does it take for your tax return to be processed?.
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!