{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

# pe8 - \$288,000 Product Testing = 90 9000 = \$810,000 Machine...

This preview shows page 1. Sign up to view the full content.

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 =
This is the end of the preview. Sign up to access the rest of the document.

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 Company’s 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 Company’s declining profits....
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online