Question
In: Accounting
Martin Mfg produces 1000 lens per month. The following per unit data apply for sales. Direct...
Martin Mfg produces 1000 lens per month. The following per unit data apply for sales.
Direct materials$400; Direct labor$25; Variable overhead $50 and Fixed overhead $60.
The plant has capacity for 1500 lens.
Solve:
(a)What is the total cost of producing 1000 lens?
(b) What is the total cost of producing 1200 lens and
(c) What is the per unit cost of producing 1200 lens? (Budgeted overhead is $90,000).
Solutions
Expert Solution
| a) | Total cost of producing 1000 lens: | |
| Direct materials = 1000*400 = | $ 4,00,000 | |
| Direct labor = 1000*25 = | $ 25,000 | |
| Variable overhead = 1000*50 = | $ 50,000 | |
| Fixed overhead | $ 90,000 | |
| Total cost of producing 1000 lens | $ 5,65,000 | |
| b) | Total cost of producing 1200 lens: | |
| Direct materials = 1200*400 = | $ 4,80,000 | |
| Direct labor = 1200*25 = | $ 30,000 | |
| Variable overhead = 1200*50 = | $ 60,000 | |
| Fixed overhead | $ 90,000 | |
| Total cost of producing 1200 lens | $ 6,60,000 | |
| c) | Per unit cost of producting 1200 lens = 660000/1200 = | $ 550 |
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test plus feedback to client)
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Selling and administration
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Production overhead (e.g., rent
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165
Outsourced test analysis
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Production overhead
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Selling and administration
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14
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The following data apply to the provision of psychological testing services: Sales price per unit (1...
The following data apply to the provision of psychological testing
services:
Sales price
per unit (1 unit = 1 test plus feedback to client)
$
340
Fixed costs
(per month):
Selling and
administration
16,000
Production
overhead (e.g., rent of testing facilities)
25,000
Variable costs
(per test):
Labor for
oversight and feedback
145
Outsourced
test analysis
15
Materials used
in testing
6
Production
overhead
11
Selling and
administration (e.g., scheduling and billing)
20
Number of
tests per month
2,000
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Data
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Direct labor
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Variable manufacturing overhead
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Fixed manufacturing overhead per year
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