Using the information in Problem 9 58, complete the following Current Proposed Materials and purchased parts $ 60 00 $ 15 00 Direct labor 12 50 13 75 Variable overhead 25 00 30 00 Fixed overhead 40 00 20 00 Manufacturing information for CB3668 Number of setups 3,000 2,300 Batch size 50 50 Cost per ...

1 Setup costs are 300 per setup and there are 3000 setups so total setup costs must be 900000 3000 x 300 Thus the total fixed costs for the current ma ...

Using the information in Problem 9-58, complete the following: Current Proposed Materials and purchased parts $ 60.00

Question:

Using the information in Problem 9-58, complete the following:

	Current	Proposed
Materials and purchased parts	$ 60.00	$ 15.00
Direct labor	12.50	13.75
Variable overhead	25.00	30.00
Fixed overhead	40.00	20.00
Manufacturing information for CB3668
Number of setups	3,000	2,300
Batch size	50	50
Cost per setup	$ 300	$ 300
Machine hours	$ 88,000	$ 55,000

Required

1. Compute the breakeven in units for both the current and proposed manufacturing plans, assuming that setup costs vary with the number of batches. Assume that setup costs are the only costs that vary with the number of batches.

2. Compare your solution above to that for Problem 9-58 and interpret the difference.