vinyl total

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Unformatted text preview: .............. Vinyl ................................................................. Total ............................................................ Cost increase 10% .......................................... Cost of cushioned seat ............................. Cushion fabrication labor ($7.50 × 0.5) ..................................................... Variable overhead ($5.00 × 0.5) ..................................................... Total variable cost per cushioned seat .............. Total variable cost per 100-unit lot ..................... 342 $1,329 540 $1,869 $ 2.40 4.00 $ 6.40 × 1.10 $ 7.04 3.75 2.50 $13.29 $1,329 10–32 Continued Overhead Analysis Supplies Indirect labor Supervision Power Heat and light Property taxes and insurance Depreciation Employee benefits: 20% Direct labor 20% Supervision 20% Indirect labor Total Variable Amount Per DLH Total $ 420,000 $1.40 375,000 1.25 Fixed Amount Total Per DLH $ 250,000 140,000 0.47 200,000 1,700,000 180,000 $0.83 0.67 5.67 0.60 450,000 1.50 75,000 $1,500,000 0.25 $5.00 50,000 $2,340,000 0.16* $7.80 *The per DLH amount for supervision has been adjusted down to $0.16 to eliminate the rounding error between the sum of the amounts per DLH and the total divided by 300,000 DLH. Variable overhead rate = ($1,500,000/300,000) = $5.00 per DLH Fixed overhead rate = ($2,340,000/300,000) = $7.80 per DLH Opportunity cost: Labor hour constraint: DLH to make 100 deluxe office stools (1.50 × 100) Less: DLH to make 100 cushioned seats (0.50 × 100) Labor hours available for economy office stool Number of economy office stools 150 hours 50 hours 100 hours = 100 DLH/0.8 hours per stool = 125 stools 343 10–32 Concluded Opportunity cost calculation: Selling price Costs: Materials Labor Variable overhead Total costs CM/unit Units produced Total CM Deluxe Office Stool $58.50 $14.55 11.25 ($7.50 × 1.5) 7.50 ($5.00 × 1.5) $33.30 $25.20 × 100 $2,520 Economy Office Stool $41.60 $15.76 6.00 ($7.50 × 0.8) 4.00 ($5.00 × 0...
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This document was uploaded on 11/26/2013.

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