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The company Ingeniero Prez, in its infinite eagerness to grow and extend its business tentacles, has acquired a company in the home appliance sector that
The company Ingeniero Prez, in its infinite eagerness to grow and extend its business tentacles, has acquired a company in the home appliance sector that was on the verge of bankruptcy. Now it is the managers' turn to get down to work and analyze the new acquisition in depth to start generating profits. The acquired company focused mainly on washing machines and dryers. However, due to the differences between the two machines (which were not noticeable to the public), it did not manufacture the machines 100%, but acquired a large part of the components from other specialised companies and simply assembled and completed the production process. To sum up the situation, the company had unallocated costs of EUR 750 000, in addition to other identified labour and component costs. The available data in question are detailed in the table below. Units Dryers 4.200 40 50 Washing machines 5.000 20 75 Labour cost (/unit) Components (/unit) Questions: 1. Make a distribution of the unallocated costs according to the number of units, labour costs, component costs, and total cost. Point out the differences
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