pe8 - $288,000 Product Testing = 90 * 9000 = $810,000...

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1. Predetermined Overhead Rate: Cost Pool Rates Purchase Orders = 252,000 / 1,200 = $210 Scrap / Re-work = 648,000 / 900 = $720 Product Testing = 1,350,000 / 15,000 = $90 Machine Related = 3,750,000 / 50,000 = $75 2. Total Overhead assigned to each Deluxe Model Purchase Orders = 210 * 400 = $84,000 Scrap / Re work = 720 * 500 = $360,000 Product Testing = 90 * 6000 = $540,000 Machine Related = 75 * 20000 = $1,500,000 Total = $2,480,000 Overhead Per Unit = $2,480,000 / 15,000 = $165.60 Cost Per Unit = $165.60 + $16 labor + $154 materials = $335.60 Total Overhead assigned to each Regular Model Purchase Orders = 210 * 800 = $168,000 Scrap / Rework = 720 * 400 =
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Unformatted text preview: $288,000 Product Testing = 90 * 9000 = $810,000 Machine Related = 75 * 30,000 = $2,250,000 Total = $3,516,000 Overhead per unit = $3,516,000 / 120,000 = $29.30 Cost Per Unit = $29.30 _ $8 labor per unit + $112 Materials = $149.30 3. Declining Factors for Companys Declining profits The deluxe model costs are more than two times the cost to make it under the regular model at about %224 of the rate under the regular. The company will be losing money if they are going to be charging less than $224 of the cost of the regular. That is possibility that would explain the Companys declining profits....
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This note was uploaded on 02/25/2010 for the course MAT 443 taught by Professor Roberts during the Winter '10 term at University of Arizona- Tucson.

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