Answered step by step
Verified Expert Solution
Question
1 Approved Answer
A firm makes and sells surfboards. The firm sells its surfboards for $110 to its distributors. The surfboards require $32 of foam and fiberglass, 1.0
A firm makes and sells surfboards. The firm sells its surfboards for $110 to its distributors. The surfboards require $32 of foam and fiberglass, 1.0 direct labor hours, and $475,000 in annual fixed costs. The firm compensates its manufacturing employees at the rate fo $25 per hour. The firm also applies variable manufacturing overhead at the rate of 60% of direct labor dollars. If the firm increases the quality of its direct materials, it will incur the following new production costs: $45 direct materials 80% of the orginal labor hours $50,000 more fixed costs Applied overhead rate of 50% of the direct labor dollars What is the increase in break-even point in the units if the firm converts to using higher quality matericals? 6591 2704 2500 1071
| A firm makes and sells surfboards. The firm sells its surfboards for $110 to its distributors. The surfboards | ||||||||||
| require $32 of foam and fiberglass, 1.0 direct labor hours, and $475,000 in annual fixed costs. The firm | ||||||||||
| compensates its manufacturing employees at the rate fo $25 per hour. The firm also applies variable | ||||||||||
| manufacturing overhead at the rate of 60% of direct labor dollars. If the firm increases the quality of its | ||||||||||
| direct materials, it will incur the following new production costs: | ||||||||||
| $45 direct materials | ||||||||||
| 80% of the orginal labor hours | ||||||||||
| $50,000 more fixed costs | ||||||||||
| Applied overhead rate of 50% of the direct labor dollars | ||||||||||
| What is the increase in break-even point in the units if the firm converts to using higher quality matericals? | ||||||||||
| 6591 | ||||||||||
| 2704 | ||||||||||
| 2500 | ||||||||||
| 1071 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Cornerstones of Managerial Accounting
Authors: Maryanne Mowen, Don Hanson, Dan Heitger, David McConomy, Bradley Witt, Jeffrey Pittman
3rd Canadian edition
176530886, 176721231, 978-0176721237
