ch 19 B worksheets 16th-2

The cost per unit of vee 21615 is also above the

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Unformatted text preview: ………………….. Since the cost per unit of PAR is above the target cost of $90, it is not earning the desired 10% return. The cost per unit of VEE is below the target cost of $180, so it is earning a return greater than the desired rate. PROBLEM 19.2B THE PARVEE COMPANY (continued) c. Given that it takes 2 hours ($20 total labor cost per unit/$10 per hr. wage rate) to produce each unit of PAR and 5 hours ($50 total labor cost per unit/$10 per hr. wage rate) to produce each unit of VEE, the total expected labor PAR ×needed for the year are: 30,000 units of hours 2 hours per unit + 10,000 units of VEE × 5 hours per unit If fixed overhead is allocated on the basis of direct labor hours, the allocation rate per hour is equal to $22.73 calculated as follows: Allocation Rate per Unit = Fixed Overhead Total Direct Labor Hours = = Total manufacturing cost per unit: PAR VEE Direct materials cost per unit …………………………………………….. Direct labor cost per unit ……………………...
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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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