Noma plans to save $3,400 per year for the next 35 years. If she can earn an annual interest rate of 9.2 percent, how much will
1 answer:
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Answer:
manufacturing overhead underallocated for the year $124,102.4
Explanation:
we distribute the expecte rate over the cost dirver
582,100 / 135,000 = 4.3185
150400 x 4.3185 = 649502.4 applied overhead
applied - actual = over or underappied
if actual > applied = underapplied
if actual < applied = overhead
525,400 - 649,502.4 = -124,102.4
Answer:
Increase in operating income by $5,000
Explanation:
Firstly, we shall compute the additional cost of this order,
Variable Cost = Direct material + Direct Labor + Variable factory overhead
= $25 + $20 + $15 = $60
Note: Fixed cost will not form part of this decision, as the company has additional capacity lying idle, thus no additional fixed cost will be incurred, and the fixed cost allocated i.e. $12 per unit is not relevant, as is just allocation and not incurred, it is a kind of sunk cost allocated.
Relevant cost = $60 per unit
Selling price per unit = $70 per unit
Contribution to profit = $70 - $60 = $10 per unit
Total increase in operating income = $10 500 = $5,000
Thus operating income will increase by this amount.
Increase in operating income by $5,000