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SMU corp produces 96,000 videophones per year. The company estimates its direct material costs for the videophones to be $220 per unit and its conversion
SMU corp produces 96,000 videophones per year. The company estimates its direct material costs for the videophones to be $220 per unit and its conversion (direct labor plus support) costs to be $320 per unit. Annual inventory carrying costs, not included in these costs are estimated to be 12%.SMUs average inventory levels are estimated as follows.
ACC 613 Profit Planning& Control (Online 2 () Homework: Chapter 7 Homework Score: 0 of 3 pts E7-31 (similar to) SMIU Corporation produces 96,000 ideophones per year The company estimates its deect mateial costs for the videophone to be 5220 per unt and ts comersion (direct labor plus suppor) costs to be $320 per unit. Annual nventory carrying costs, not included in these costs, are esomated to be f ventory levels are estimated an felows Requirenent Compute the annual ventsry carryng costs fer SMU Coprn Frst calculiate the inventory value, then calculate the annual inventory caryng costs Direct matenals Work in process Fireshed goods Data Tabwe Direct material 3 months of production and 40% for conversion) Fnished goods 1 month of peeductio Total vetory ale Print Done Direct Materials- 3 Months of production
Work in process- (100% complete for materials & 40% for conversion) 3 Months of production
Finished Goods-1 Month of production.
Compute the the inventory value for the categories listed above, and then compute the total annual inventory carrying costs for the company.
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