Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Euclid Fashions, Inc., is introducing a sports jacket. A standard cost card has been prepared for the new jacket, as shown below: Standard Quantity or

Euclid Fashions, Inc., is introducing a sports jacket. A standard cost card has been prepared for the new jacket, as shown below:

Standard Quantity or Hours Standard Price or Rate Standard Cost
Direct materials 2.0 yards $ 4.60 per yard $ 9.20
Direct labor 1.4 hours $ 10.00 per hour 14.00
Manufacturing overhead (1?6 variable) 1.4 hours $ 12.00 per hour 16.80


Total standard cost per jacket $ 40.00





The following additional information relating to the new jacket is available:

a.

The only variable selling and administrative cost will be $4 per jacket for shipping. Fixed selling and administrative costs will be (per year):

Salaries $ 90,000
Advertising and other 384,000


Total $ 474,000





b.

Because the company manufactures many products, no more than 21,000 direct labor-hours per year can be devoted to production of the new jackets.

c.

An investment of $900,000 will be necessary to carry inventories and accounts receivable and to purchase some new equipment. The company

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Budget Bible Budgeting Made Simple

Authors: Jessica Charise Brant, Adrienne Homet Hand

979-8218059880

More Books

Students also viewed these Accounting questions