ORIE 3150 Homework #10 answers.pdf - ORIE 3150 Homework#10 Due 9:00 PM 1 Moonzone Manufacturing had the following costs in November 2018 The company

ORIE 3150 Homework #10 answers.pdf - ORIE 3150 Homework#10...

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Copyright © 2018 John Callister ORIE 3150 Homework #10 Due November 28, 2018 9:00 PM 1. Moonzone Manufacturing had the following costs in November 2018. The company manufactured and sold 10,000 units in November 2018. The company expects to manufacture and sell 11,000 units in December 2018 and 11,500 units in January 2019. Overhead was 60% variable, administrative costs were 30% variable, and selling costs were 80% variable. There were no inflation effects. Prepare the operating budget for December 2018 and January 2019. Item Amount Direct Materials $340,000 Direct Labor $175,000 Overhead $820,000 Selling $410,000 Administrative $275,000 Sample calculation: December 2018 Overhead = (820,000)[(0.60)(1.10) + (0.4)] = $869,200 Production increases 10% in December compared to November. Thus, variable costs increase by 10%. Fixed costs remain the same. Please be sure you understand this very fundamental concept. Nov. 2018 Dec. 2018 Jan. 2019 Direct Materials 340,000 374,000 391,000 Direct Labor 175,000 192,500 201,250 Overhead 820,000 869,200 893,800 Selling 410,000 442,800 459,200 Administrative 275,000 283,250 287,375 Totals 2,020,000 2,161,750 2,232,625
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Copyright © 2018 John Callister 2. GN See Inc. manufactures and sells a vitamin drink to sell to gullible people and 18 th century sailors. The following are required for production of a 100-gallon batch: 1,960 ounces of lime Kool-Aid at $0.12 per ounce 40 pounds of granulated sugar at $0.80 per pound 65 kiwi fruit at $0.50 each 100 vitamin C tablets at $0.25 each 4,000 ounces of water at $0.003 per ounce GN See estimates that 2% of the lime Kool-Aid is wasted, 4% of the sugar is lost, and 10% of the kiwis cannot be used. The scrap rate for the vitamin C tablets and water is zero. Compute the standard cost of the ingredients for one gallon of the vitamin drink. The answer is $3.46 as shown. The equation is: Ideal Amount Ideal Amount Actual Amount 1 scrap rate yield The presence of a non-zero scrap rate increases the amount of material we must purchase to manufacture our product and increases the cost. The cost with zero scrap would be $3.37.
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