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Please help on the yellow portions! Given Information Minnesota Office Products (MOP) produces three different paper products at its Vaasa lumber plant: Supreme, Deluxe, and
Please help on the yellow portions!
Given Information Minnesota Office Products (MOP) produces three different paper products at its Vaasa lumber plant: Supreme, Deluxe, and Regular. Each product has its own dedicated production line at the plant. It currently uses the following three-part classification for its manufacturing costs: direct materials, direct manufacturing labor, and manufacturing overhead costs. The total amount of manufacturing overhead cost is allocated to each product line on the basis of the direct manufacturing labor costs of each line. Summary data (in millions) for July 2011 are as follows:Computations 1. Compute the manufacturing cost per unit for each product produced in July 2011: Manufacturing cost per unit:1a. (Not in the textbook) Compute the amount of fixed overhead that has been allocated to each product line: Fixed cost per product line: Fixed cost per unit: Variable cost per unit:2. Suppose that in August 2011, production was 150 million units of Supreme, 190 million units of Deluxe, and 220 million units of Regular. Why might the July 2011 information on manufacturing cost per unit be misleading when predicting total manufacturing costs in August 2011?It is misleading because the level of activity changed for three products from July to August. Unit costs are determined at a specific level of activity mabe change when computed at another level of activity. Decisions based on unit costs hold good when made at the same volume at which such as is determined. If the level of activity changes, the decisions may go wrong and may lead to over or 3 (Not in the textbook) What is the total variable cost per product line if the production volume is as belowStep by Step Solution
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