Question

Question :Writers company produces 2 products presently The information related to manufacturing is given below WRITERS'...

Question :Writers company produces 2 products presently

The information related to manufacturing is given below

WRITERS' Company

Yr 2018-19

Fountain Pen

Ball point

Units

10000

20000

Area occupied (sq feet)

7000

8000

Variable cost – Direct

32

25

Fixed Cost - Direct (per unit)

10

8

Rent - Fixed Cost per

month (Indirect - common for all products)

3,00,000.00

The Fixed indirect cost of Rent of Rs 3,00,000/- is to be allocated to both the products The company was doing this on the "number of units" basis till now

  1. Please compute cost per unit of each product basis the above method.

You have researched and advised Writers' Company to have Activity Based Costing and have gathered data to support the allocation of the Fixed indirect cost as follows :

Break-up of Indirect Fixed Costs                                                                                            Allocation basis

Rent

3,00,000

Area of

operations

b. Please compute cost per unit of each product on the new method of allocation

Writers' Company produces 2 products presently

The information related to manufacturing is given below.

WRITERS' Company

Yr 2018-19

Fountain Pen

Ball point

Units

10000

20000

Area occupied (sq feet)

7000

8000

Variable cost – Direct

32

25

Fixed Cost - Direct (per unit)

10

8

Rent - Fixed Cost per month (Indirect

- common for all products)

3,00,000.00

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
6 .Isle company produces two products. Information on the 2 products is as follows – A...
6 .Isle company produces two products. Information on the 2 products is as follows – A B Selling price per unit $10 $4 Variable cost per unit $7 $2 Labour hours per unit 1 hr. 2 hrs. Market limitation 50,000 units 20,000 units Total labour hours available 75,000 hrs Total fixed cost $100,000 7. Using the information from question 6, assume there was no market limitation. What would be the best decision? a. Produce 50,000 units of A and 12,500...
1. Use this information to do questions 42-48 Jones company makes two products A & B....
1. Use this information to do questions 42-48 Jones company makes two products A & B. Here is some financial information about those products.                          A    B     Combined total cost of cost drivers Direct labor    $45,000 $35,000 Direct materials              $40,000 $30,000 Cost drivers                Set ups 6    4 $10,000              Inspections    4    6 $5,000                  Test Runs 12     8 $25,000                  Units produced    1000 1000 Using ABC Costing for overhead, what is the...
Use the information below to answer the following question(s): Cruise Company produces a part that is...
Use the information below to answer the following question(s): Cruise Company produces a part that is used in the manufacture of one of its products. The unit manufacturing costs of this part, assuming a production level of 6,000 units, are as follows: Direct materials $4.00 Direct labour $4.00 Variable manufacturing overhead $3.00 Fixed manufacturing overhead $1.00 Total cost $12.00 The fixed overhead costs are unavoidable. Assuming Cruise Company can purchase 6,000 units of the part from Suri Company for $17...
Wanda Company produces three products with the following information: Product Good Better Best Selling price per...
Wanda Company produces three products with the following information: Product Good Better Best Selling price per unit $17 $19 $26 Variable cost per unit $8 $10 $12 Machine-hours per unit (MH/unit) 2 3 4 The company has a limit of 14,300 machine-hours available per month and a monthly fixed cost of $21,000. The demand for each of the products is 2,500 units per month. The company’s goal is to maximize its profitability. Suppose the company can rent a machine that...
Lee Company's standards for the most recent period are given below. Fixed and variable manufacturing overhead...
Lee Company's standards for the most recent period are given below. Fixed and variable manufacturing overhead costs are applied to products on the basis of machine hours. The denominator volume of machine hours is 9,000. Standard Quantity or Hours per unit Standard Price or Rate per unit Standard Cost per unit Direct Materials 3 feet $6 per foot $18 Direct Labor 1.5 direct labor hours $10 per direct labor hour $15 Variable Overhead 2 machine hours $12 per machine hour...
Question 15   using the information below. Schmidt Corporation produces a part that is used in the...
Question 15   using the information below. Schmidt Corporation produces a part that is used in the manufacture of one of its products. The costs associated with the production of 10,000 units of this part are as follows: Direct materials $45,000 Direct labour 65,000 Variable factory overhead 30,000 Fixed factory overhead 70,000 Total costs $210,000 Of the fixed factory overhead costs, $30,000 is avoidable. Assuming accepting the offer creates excess facility capacity that can be used to produce 2,000 units of...
Check my homework: Overhead is applied to products on the basis of direct labor-hours. At the...
Check my homework: Overhead is applied to products on the basis of direct labor-hours. At the beginning of the current year, management estimated that $600,000 in overhead costs would be incurred and the company would produce and sell 1,000 units of the flexible model and 10,000 units of the regular model. The flexible model requires 2 hours of direct labor time per unit, and the regular model requires 1 hour. Direct materials and labor costs per unit are given below:...
Gilmore's Company's standards for the most recent period are given below. Fixed and variable manufacturing overhead...
Gilmore's Company's standards for the most recent period are given below. Fixed and variable manufacturing overhead costs are applied to products on the basis of machine hours. The denominator volume of machine hours is 9,000. Standard Quantity or Hours per unit Standard Price or Rate per unit Standard Cost per unit Direct Materials 3 feet $6 per foot $18 Direct Labor 1.5 direct labor hours $10 per direct labor hour $15 Variable Overhead 2 machine hours $12 per machine hour...
Lee Company's standards for the most recent period are given below. Fixed and variable manufacturing overhead...
Lee Company's standards for the most recent period are given below. Fixed and variable manufacturing overhead costs are applied to products on the basis of machine hours. The denominator volume of machine hours is 9,000. Standard Quantity or Hours per unit Standard Price or Rate per unit Standard Cost per unit Direct Materials 3 feet $6 per foot $18 Direct Labor 1.5 direct labor hours $10 per direct labor hour $15 Variable Overhead 2 machine hours $12 per machine hour...
Coronado Manufacturing produces two products in its Saratoga plant, balzene and galvene. Since it opened its...
Coronado Manufacturing produces two products in its Saratoga plant, balzene and galvene. Since it opened its doors in 1965, Coronado has been using a single manufacturing overhead pool to accumulate overhead costs. Overhead has been allocated to products based on direct labor hours. Until recently, Coronado was the sole producer of galvene in the country and was therefore able to dictate the selling price. However, last year Marcella Products began marketing a comparable product at $56 per unit—a price that...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT