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Tesla Inc. produces three types of cars: Model S, Model 3, and Model X. The following data is available: Model S: Direct Materials: $50,000,000; Direct

Tesla Inc. produces three types of cars: Model S, Model 3, and Model X. The following data is available:

  • Model S: Direct Materials: $50,000,000; Direct Labor: $25,000,000; Overhead Rate: 170%
  • Model 3: Direct Materials: $45,000,000; Direct Labor: $20,000,000; Overhead Rate: 170%
  • Model X: Direct Materials: $60,000,000; Direct Labor: $30,000,000; Overhead Rate: 170%

Requirements:

  1. Compute the total manufacturing cost for each car model.
  2. Determine the total overhead applied to each car model.
  3. Prepare a cost sheet for each model.
  4. Calculate the break-even point in units if the selling prices are $70,000, $50,000, and $80,000 for Model S, Model 3, and Model X, respectively.
  5. Evaluate the cost structure and suggest areas for improvement.

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