ch 19 B worksheets 16th-2

43 4000 7143 inspection 40 5000 20 5000 shipping

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Unformatted text preview: ……………………………………………………. Total manufacturing cost per unit …………………………….. PROBLEM 19.2B THE PARVEE COMPANY (continued) Since the cost per unit of PAR is below the target cost of $90, it is earning a return greater than the desired rate. The cost per unit of VEE is above the target cost of $180, so it is not earning the desired e. return. fixed overhead activities that are value-added are machining and shipping. The proportion of The only these costs to total fixed overhead is: f. Reducing the number of setups needed to produce VEE would be a logical activity to start with in trying to reach the target cost. This activity is non-value-added and VEE appears to require a disproportionate number ofthe number of setups required for one product while not reducing the related overhead cost will Reducing them. change the allocation rate per setup and the total manufacturing cost per unit for each product. New allocation rate per setup = = Total fixed overhead allocated per unit: PAR VEE PAR V...
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This note was uploaded on 03/13/2014 for the course ACCOUNTING 102 taught by Professor Foote during the Summer '12 term at Fullerton College.

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