Microsoft produces two types of software packages, Office Home and Office Professional. The following cost data is
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Question:
Microsoft produces two types of software packages, Office Home and Office Professional. The following cost data is provided:
Cost Item | Office Home | Office Professional |
Direct Material | $50/unit | $80/unit |
Direct Labor | $20/unit | $30/unit |
Overhead | 150% of direct labor cost | 140% of direct labor cost |
Additional Information:
- Production for Office Home: 100,000 units
- Production for Office Professional: 80,000 units
Requirements:
- Calculate the total cost for Office Home and Office Professional.
- Determine the cost per unit for each software package.
- Prepare a cost sheet for both software packages.
- Compare the cost structures and suggest which package is more cost-effective.
- Recommend pricing strategies based on cost analysis and market trends.
Related Book For
Horngrens Cost Accounting A Managerial Emphasis
ISBN: 978-0134475585
16th edition
Authors: Srikant M. Datar, Madhav V. Rajan
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