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SPs manufactures a variety of equipment for solar power. At the start of 2012, the company estimated it would incur $10,000,000 of direct labor cost,
SPs manufactures a variety of equipment for solar power. At the start of 2012, the company estimated it would incur $10,000,000 of direct labor cost, $30,000,000 of direct material cost, and $40,000,000 of manufacturing overhead ($5,000,000 of which is variable; $35,000,000 fixed.) Solar Power Systems Overhead is applied to jobs based on direct labor hours at a rate of $100 per direct labor hour At SPS, highly skilled employees are paid $50 per hour. Unskilled employees get $15 per hour. In general, obs that require highly skilled employees are more complex and require more support costs such as rolaited to setting up equipment for production. The weighted average direct labor rate is $20 per hour rket with aggressive pricing. In particular, SPS didn't seem to be price competitive on jobs that called for mostly less skilled work. During 2012, mar sales were unexpectedly low due to increased competition from a Swiss firm that entered the y, plant manager, talked to Phil Ryan, VP of Finance: "What's going on here? We're competitive on high end jobs that require a lot of support in t erm s of engineering, material handling, and setting up t we can't compete on relatively simple jobs where, in my opinion, we're really efficient. is assistant to analyze costs related to recent bids for simple" and "complex" jobs. The resuit Job 358 (Simple) Direct Material$40,000 Direct Labor 4.200 210 hours x $20 Overhead 210 hours x $100 Total $65,200 SPs manufactures a variety of equipment for solar power. At the start of 2012, the company estimated it would incur $10,000,000 of direct labor cost, $30,000,000 of direct material cost, and $40,000,000 of manufacturing overhead ($5,000,000 of which is variable; $35,000,000 fixed.) Solar Power Systems Overhead is applied to jobs based on direct labor hours at a rate of $100 per direct labor hour At SPS, highly skilled employees are paid $50 per hour. Unskilled employees get $15 per hour. In general, obs that require highly skilled employees are more complex and require more support costs such as rolaited to setting up equipment for production. The weighted average direct labor rate is $20 per hour rket with aggressive pricing. In particular, SPS didn't seem to be price competitive on jobs that called for mostly less skilled work. During 2012, mar sales were unexpectedly low due to increased competition from a Swiss firm that entered the y, plant manager, talked to Phil Ryan, VP of Finance: "What's going on here? We're competitive on high end jobs that require a lot of support in t erm s of engineering, material handling, and setting up t we can't compete on relatively simple jobs where, in my opinion, we're really efficient. is assistant to analyze costs related to recent bids for simple" and "complex" jobs. The resuit Job 358 (Simple) Direct Material$40,000 Direct Labor 4.200 210 hours x $20 Overhead 210 hours x $100 Total $65,200
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