Question
A company produces 2000 units of a product with regular selling price of $50 per unit. The costs incurred by the company for producing a
A company produces 2000 units of a product with regular selling price of $50 per unit. The costs incurred by the company for producing a unit are: Direct material $15, direct labor $10, Variable manufacturing overheads $7 and fixed manufacturing overhead $7. The company has a capacity to produce 3000 units. What should be the minimum price per unit the company should charge for special order of above 1000 units?
Select one:
a. Cannot be determined
b. $32
c. $24
d. $25
e. $39
X and Y are the two production departments with distributed production overhead of $12000 and $6000 respectively. Dept. X consumes a total of 5000 labor hours while as dept. Y Consumes 4000 labor hours. Assuming labor hours as allocation base, the overhead rate for dept. X is
Select one:
a. $2.00
b. $1.50
c. Cannot be determined
d. $3.00
e. $2.40
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