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I need help with this question ASAP. Please and thank you The Canadian Motorcycle Company (CMC) produces two models of motorcycles: Faster and Slower. The
I need help with this question ASAP. Please and thank you
The Canadian Motorcycle Company (CMC) produces two models of motorcycles: Faster and Slower. The company has five categories of overhead costs: purchasing, receiving, machine operating costs, handling, and shipping. Each category represents the following percentages of total overhead costs, which amount to $6.4 million: Purchasing 25.0% Handlin g 10.0% Receiving 12.5% Shipping 15.0% Machine operating 37.5% Current capacity is 160,000 machine hours, and the current production uses 100% of the available hours. The sales mix is 45% Faster and 55% Slower. The overhead costs are applied to each model based on machine hours. The production costs for each model of motorcycle and other relevant information are as follows: Faste r Slower Direct materials per unit $5,400 $4,100 Direct labour per unit $1,250 $1,300 Applied overhead ? ? 1,000 1,100 Number of purchases 9 8 Number of shipments received 6 6 50% 50% Number of units produced Percentage of machine hours consumed by each product Number of moves in handling Number of kilometres to ship to customers 75 100 4,000 4,200 CMC determines its prices by adding 40% to the cost of direct materials and direct labour. Determine if this pricing policy is appropriate. (Round answers to 0 decimal places, e.g. 1,525.) Faste r Slower $ $ Applied overhead Full cost Selling price Yes or No Faste r Slower $ $ $ $ Use an activity-based approach to determine whether CMC can make a profit if it sells the Faster model for $10,043. (Round answer to 0 decimal places, e.g. 1,525.) Profit per unit Yes or No $Step by Step Solution
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