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A certain specialty product is continually produced by Max Corp. It has produced 8 batches already. At a learning curve of 80%, the company computed
A certain specialty product is continually produced by Max Corp. It has produced 8 batches already. At a learning curve of 80%, the company computed their total production cost at P163,840 for all of the previous 8 batches, of which 30% is labor cost, 10% variable overhead and 60% is material cost, and no allocation for fixed overhead. The variable overhead is allocated using the same cost driver as labor, but on a different rate. a. How much is Max expected to incur if they will produce the same quantity previously made? b. How much is the labor cost for the very first batch produced? c. How much is the total production cost for the first batch produced? d. How much variable overhead was incurred on the second batch of production? *round off your answers to TWO decimal places, and include ".00" in your answers*
A certain specialty product is continually produced by Max Corp. It has produced 8 batches already. At a learning curve of 80%, the company computed their total production cost at P163,840 for all of the previous 8 batches, of which 30% is labor cost, 10% variable overhead and 60% is material cost, and no allocation for fixed overhead. The variable overhead is allocated using the same cost driver as labor, but on a different rate. | |
a. How much is Max expected to incur if they will produce the same quantity previously made? | |
b. How much is the labor cost for the very first batch produced? | |
c. How much is the total production cost for the first batch produced? | |
d. How much variable overhead was incurred on the second batch of production? | |
*round off your answers to TWO decimal places, and include ".00" in your answers* |
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