The following annual data related manufacturing company for July 2022. The company produces two types of cheeses, namely, Happy cow Slices and Herbs Cheese.

DetailsBudgetedActualSlicesHerbsMachine Hrs22500900450Direct Labour hrs450001200900Direct Labour Costs63000033.75/hour33.75/hourManufacturing Overhead cost8190007600076000

The company uses machine hours as the cost driver.

REQUIRED:

A. Calculate the companys predetermined plant-wide rate.

B. Estimate the overhead costs of each of the two products

C. Compare the actual overhead cost to the amount of overhead applied to the two products in July.

QUESTION 2

Two companies have identical products, total fixed costs, and variable costs per unit, yet one company is able to set a lower price for its product and still be as profitable as the other company. Explain how this can happen with a suitable example.

QUESTION 3

A car rental company rents small, medium, and family-sized cars. What assumptions would be made for the purpose of a cost volume product analysis? Does this mean that CVP is of little value to the business? Explain your answer.