Question
TeleTech Corporation manufactures two different color printers for the business market. Cost estimates for the two models for the current year are as follows: _______________________________________________Basic
TeleTech Corporation manufactures two different color printers for the business market. Cost estimates for the two models for the current year are as follows: _______________________________________________Basic System Advanced System Direct material............................................................................$400..................$800 Direct labor (20 hours at $15 per hour)........................................300....................300 Manufacturing overhead*............................................................400....................400 Total........................................................................................$1,100................$1,500 Each model of printer requires 20 hours of direct labor. The basic system requires 5 hours in department A and 15 hours in department B. The advanced system requires 15 hours in department A and 5 hours in department B. The overhead costs budgeted in these two production departments are as follows: ___________________________________Department A Department B Variable cost................................................. $16 per direct-labor hour...$4 per direct-labor hour Fixed cost................................................................ $200,000...............................$200,000 The firm s management expects to operate at a level of 20,000 direct-labor hours in each production department during the current year. (This estimate is based on the practical capacity
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