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Ivanshal [37]
3 years ago
6

Ring Company designs and builds jewelry. During June it had applied overhead of $120,000. Overhead is applied at the rate of 75%

of direct labor cost. Direct labor wages average $20 per hour.How many direct labor hours did Ring Company have for the month of June?
Business
1 answer:
igomit [66]3 years ago
3 0

Answer:

4.500

Explanation:

According with the information say that the $120.000 correspond to overhead to the rate of 75% of direct labor force, so you have to calculate the portion that is directed to the direct labor cost:

Direct labor cost: $120.000 * 75%

Direct labor cost: $ 90.000

Now you know that the average wages per hour of the direct labor force is $20. Now you have to divide the direct labor cost by the average salary per hour to calculate the number of hours worked in June.

Number of hours = $ 90.000/$20

Number of hours = 4.500  

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Answer and Explanation:

a. The profit margin for both chairs & decks is

But before that following calculations need to be done

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Sales revenue  $1,046,500     $1,950,000

Less:

Direct material   $585,000      $810,000

Direct labor        $130,000       $300,000

overhead             $195,000      $450,000

                     ($645,000 × $130,000 ÷ $430,000)  

Gross profit         $136,500     $390,000

Now the profit margin is

For chairs

= $136,500 ÷ ($585,000 + $130,000 + $195,000)

= 15%

ANd, for decks

= $390,000 ÷ ($810,000 + $300,000 + $450,000)

= 25%

a-2. based on the profit margin, the chairs should be dropped  

6 0
3 years ago
Wendy claims that the right mix of hamburgers and other goods is being produced, but that they are not being produced in the lea
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Wendy claims that the right mix of hamburgers and other goods is being produced, but that they are not being produced in the least costly way. Economist assess it in the way of allocative efficiency as well as the productive efficiency.

According to Wendy, allocative efficiency is achieved because the right mix of hamburger is produced, but at the same time  productive efficiency is not achieved because the production is not utilizing cheapest possible means of producing the goods.

Allocative efficiency occurs when  the consumer demand is completely met by the  supply. In the other words, businesses are providing the exact supply which the  consumers want.

Allocative efficiency occurs from the producers side as well as the consumers side. This happens when the demand is fully met, and production is optimized until marginal costs = marginal revenue . It means that no more profits are made.

Productive efficiency occurs when the businesses focuses on producing a good at the lowest possible cost.

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3 0
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Answer:

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Accordingly, there is a belief of management that the overheads are directly related to machine hours.

And thus, they are allocated based on machine hours under traditional costing. As therefore, the statement is true as states all of the above things.

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