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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:
- Compute the total manufacturing cost for each car model.
- Determine the total overhead applied to each car model.
- Prepare a cost sheet for each model.
- 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.
- Evaluate the cost structure and suggest areas for improvement.
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