Answered step by step
Verified Expert Solution
Question
1 Approved Answer
please solve this with expaining not using excel software( do not use excel) DONALD manufactures two units, plates and cups for which the following information
please solve this with expaining not using excel software( do not use excel)
DONALD manufactures two units, plates and cups for which the following information is available: Costs per unit Plates Cups Direct materials $ 450 $ 550 Direct labor 600 750 Variable overhead 750 900 Fixed overhead 600 750 Total cost per unit $2,400 $2.950 Price $3,000 $3,900 Units sold 400 200 The average wage rate is $20 per hour. The plant has a capacity of 21,000 direct labor hours, but current production uses only 19,500 direct labor hours. Required: 1. A new customer has offered to buy 40 units of Cups if the price is lowered to $3,000 per unit. How many direct labor hours are required to produce 40 units of Cups? How much will the profit increase or decrease) if DONALD accepts this proposal? All other prices will remain the same. 2. Suppose that the customer has instead offered to buy 60 units of LAMPS at $3,000 per unit. How much will the profits change if the order is accepted? Assume that the company cannot increase its production capacity to meet the extra demand. 3. Answer the question in requirement (2), assuming instead that the plant can work overtime. Direct labor costs for the overtime production increase to $30 per hour, i.e., variable overhead cost for overtime production are 50% more than for normal productionStep 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