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<span>The accounting cost of running the smoothing stand for the summer is $13,135.90. To find this, we must first figure out which numbers given in the problem are relevant. Since we are dealing with accounting cost (and not economic cost), we know that we can ignore the opportunity cost ($2865 in foregone wages). We also can ignore the price of the smoothies since we do not need to compute revenue in order to determine accounting cost. Thus, the relevant numbers are $8130 for the lease, $2239 for insurance, the per unit cost of $2.3, and the total quantity of 1203. To find the accounting cost, we simply need to add our fixed costs and our variable costs. The fixed costs are given as $8130 and $2239. FC=8130+2239=$10369. Our variable cost, VC=2.3q, and we are told q=1203. Thus VC=2.3(1203)=$2766.90.
To find our Total accounting costs, simply add fixed costs plus variable costs. FC+VC=2766.90+10369=$13135.90.</span>
Answer:
b. $2,580,000
Explanation:
The formula and the computation of the cost of goods manufactured is shown below:
= Direct materials used + Direct labor cost + Manufacturing overhead cost + beginning work-in-process inventory - ending work-in-process inventory
= $780,000 + $900,000 + $720,000 + $1,080,000 - $900,000
= $2,580,000
The direct material used is
= Beginning raw material inventory + purchase made - ending raw material inventory
= $300,000 + $960,000 - $480,000
= $780,000
Answer:
C) $ 15.00 per hour
Explanation:
total labor hours 26,000 per year
total indirect costs $390,000
if the company allocates indirect costs according to labor hours employed, the cost allocation rate should be:
$390,000 / 26,000 = $15 per direct labor hour
This means that for every labor hour employed, $15 will be allocated as indirect costs, e.g. a client requires 50 labor hours per year and $750 (= 50 x $15) in indirect costs.
