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bulgar [2K]
3 years ago
6

Mcewan Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hou

rs. The company based its predetermined overhead rate for the current year on 48,000 direct labor-hours, total fixed manufacturing overhead cost of $307,200, and a variable manufacturing overhead rate of $2.80 per direct labor-hour. Job X941, which was for 50 units of a custom product, was recently completed. The job cost sheet for the job contained the following data:
Total direct labor-hours 300
Direct materials $600
Direct labor cost $6,400

Required:
Calculate the selling price for Job X941 if the company marks up its unit product costs by 20%.
Business
1 answer:
BlackZzzverrR [31]3 years ago
4 0

Answer:

$234.24 per unit

Explanation:

The computation of the selling price for Job X941 is shown below:

But before that following calculations need to be determined

The Predetermined overhead rate is

= Variable overhead per DLH + Fixed overhead per DLH

= $2.80 + ($307,200 ÷ 48,000)

= $9.2 per DLH

Now the Total cost of Job X941 is

= Direct materials + Direct labor + Overhead applied

= $600 + $6,400 + (300 × $10)

= $9,760

 And, finally

The Selling price per unit of Job X941 is

= Unit product costs × 120%

= ($9,760 ÷ 50) × 120%

= $234.24 per unit

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Answer:

a. True

Explanation:

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4 0
3 years ago
Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the ball is manufactured in a
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Answer:

1A. Compute the CM ratio and the break-even point in balls.

  • CM ratio = 2.5
  • break even point = 21,000 balls

1B. Compute the degree of operating leverage at last year.

  • 31.82%

2. Due to an increase in labor rates, the company estimates that variable expenses will increase by $3 per ball next year. If this change takes place and the selling price per ball remains constant at $25, what will be the new CM ratio and break-even point in balls?

  • CM ratio = 3.57
  • break even point = 30,000 balls

3. Refer to the data in (2) above. If the expected change in variable expenses takes place, how many balls will have to be sold next year to earn the same net operating income, $90,000, as 5. last year? The president feels that the company must raise the sell- ing price of its basketballs. If Northwood Company wants to maintain the same CM ratio as last year, what selling price per ball must it charge next year to cover the increased labor costs?

  • 42,858 balls
  • new price of $28 per ball

4. Refer to the original data. The company is discussing the construction of a new, automated manufacturing plant. The new plant would slash variable expenses per ball by 40%, but it would cause fixed expenses per year to double. If the new plant is built, what would be the company's new CM ratio and new break-even point in balls?

  • CM = 1.32
  • 26,250 balls

A. If the new plant is built, how many balls will have to be sold next year to earn the same net operating income, $90,000, as last year?

31,875 balls

B. Assume the new plant is built and that next year the company manufactures and sells 30,000 balls (the same number as sold last year). Prepare a contribution format income statement and compute the degree of operating leverage.

Income Statement

Total revenue $750,000

Variable expenses $270,000

Contribution margin $480,000

Fixed expenses $420,000

Net operating income $60,000

Degree of operating leverage = 60.87%

C. If you were a member of top management, would you have been in favor of constructing the new plant?

If you cannot avoid paying the salary raise, then the company needs to carry on the new plant project.

Explanation:

sales price per ball = $25

variable expenses: $15 per unit

  • direct labor $9
  • other variable costs $6

CM ratio = net sales / CM = $750,000 / $300,000 = 2.5

break even point = total fixed costs / CM per unit = $210,000 / $10 = 21,000 balls

degree of operating leverage = fixed costs / total costs = $210,000 / $660,000 = 31.82%

new CM ratio = net sales / CM = $750,000 / $210,000 = 3.57

break even point = total fixed costs / CM per unit = $210,000 / $7 = 30,000 balls

sales level for $90,000 profit = ($210,000 + $90,000) / $7 = 42,857.14 ≈ 42,858 balls

CM ratio (new plant) = net sales / CM = $750,000 / $570,000 = 1.32

break even point = total fixed costs / CM per unit = $420,000 / $16 = 26,250 balls

sales level for $90,000 profit = ($420,000 + $90,000) / $16 = 31,875 balls

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Determine the finance charge on a 8,000 loan with a monthly payment of 162,80 for 60 months
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Commitment usually refers to the insurer's agreement to assume all inventory risk. A firm commitment also means agreeing to buy and sell all IPO securities directly from the issuer. Other uses of commitments relate to loans and derivatives.

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2 years ago
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