2. Blockbuster Entertainment manufactures digital video equipment. For each unit $500 of direct material is used...

2. Blockbuster Entertainment manufactures digital video equipment. For each unit $500 of direct material is used and there is $1,500 of direct manufacturing labour at $30 per hour. Manufacturing overhead is applied at $35 per direct manufacturing labour hour. Calculate the cost of each unit.
a. $4,975
b. $4,025
c. $3,750
d. $4,150
e. $4,725

3. In an activity-cost pool
a. a measure of the activity performed serves as the cost allocation base.
b. the costs have a cause-and-effect relationship with the cost-allocation base for that activity.
c. the cost pools are homogeneous over time.
d. costs in a cost pool can always be traced directly to products.
e. each pool pertains to a narrow and focused set of costs.

Solutions

Expert Solution

Question 1(No.2 per screen above):-

The cost of each unit can be calculated as follows:-

Particulars	Amount

Direct Material	500
Direct labor	1,500
Manufacturing overhead(50 hours * $35 per hour)	1,750
Cost per unit	3,750

Based on the above calculation, the correct answer is Option C - $3,750.

The number of direct labor hours = $1,500/$30 per labor hour = 50 direct labor hour.

Option A, Option B, Option D and Option E are incorrect because they represent different cost per unit for the product than the actual cost per unit calculated above.

Kindly request you to post the remaining question separately so that we can answer that as well. All the best and please let me know if you have any questions via comments :)

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

2. Blockbuster Entertainment manufactures digital video equipment. For each unit $500 of direct material is used...

Standard cost information: Standard Quantity / Unit Standard Price Standard Cost / Unit Direct Material 2...

Standard cost information: Standard Quantity / Unit Standard Price Standard Cost / Unit Direct Material 2 $0.75 $1.50 Direct Labor 5 $0.35 $1.75 Variable Overhead 3 $1.20 $3.60 Actual cost information: Total Actual Used Total Actual Cost Direct Material 19,500 $19,500 Direct Labor 34,500 $15,750 Variable Overhead 18,000 $22,000 Do not enter dollar signs or commas in the input boxes. Round all Unit values to 2 decimal places. Round all other answers to the nearest whole number. Enter all variances...

Selling price per unit (package of 2 CDs)...................................... $20.00 Variable costs per unit: Direct material............................................................................................................... $4.00...

Selling price per unit (package of 2 CDs)...................................... $20.00 Variable costs per unit: Direct material............................................................................................................... $4.00 Direct labor...................................................................................................................... $5.00 Artist's royalties.............................................................................................................. $3.50 Manufacturing overhead.......................................................................................... $3.00 Selling expenses............................................................................................................ $1.00 Total variable costs per unit............................................................ $16.50 Annual fixed costs: Manufacturing overhead.......................................................................................... $180,000 Selling and administrative....................................................................................... $220,000 Total fixed costs................................................................................ $400,000 Forecasted annual sales volume (120,000 units)......................... $2,400,000 If the company's direct-labor costs do increase by 8%, what selling price per unit of product must it charge to maintain the same contribution margin...

4).Sales is $100 per unit; direct material is $25 per unit; direct labor is $15 per...

4).Sales is $100 per unit; direct material is $25 per unit; direct labor is $15 per unit, overhead is $10 per unit and $20,000 per month; selling and administrative expenses are $5 per unit and $10,000 per month. The company produced 900 units. Gross margin equals: a).$25,000 b).$40,500 c).$90,000 d).$10,500 5).Sales is $100 per unit; direct material is $25 per unit; direct labor is $15 per unit, overhead is $10 per unit and $20,000 per month; selling and administrative expenses...

Frandec Company manufactures, assembles, and rebuilds material handling equipment used in warehouses and distribution centers. One...

Frandec Company manufactures, assembles, and rebuilds material handling equipment used in warehouses and distribution centers. One product, called a Liftmaster, is assembled from four components: a frame, a motor, two supports, and a metal strap. Frandec’s production schedule calls for 4000 Liftmasters to be made next month. Frandec purchases the motors from an outside supplier, but the frames, supports, and straps may be either manufactured by the company or purchased from an outside supplier. Manufacturing and purchase costs per unit...

Video Concepts, Inc. (VCI) manufactures a line of digital cameras that are distributed to large retailers....

Video Concepts, Inc. (VCI) manufactures a line of digital cameras that are distributed to large retailers. The line consists of three models. The following data are available regarding the models: Model Selling Price per unit Variable Cost per unit Demand/Year (units) Model LX1 $175 $100 2,000 Model LX2 $250 $125 1,000 Model LX3 $300 $140 500 VCI is considering the addition of the fourth model to its line (LX4). The model would be sold to retailers for $375. The variable...

A linear programming computer package is needed. Frandec Company manufactures, assembles, and rebuilds material-handling equipment used...

A linear programming computer package is needed. Frandec Company manufactures, assembles, and rebuilds material-handling equipment used in warehouses and distribution centers. One product, called a Liftmaster, is assembled from four components: a frame, a motor, two supports, and a metal strap. Frandec's production schedule calls for 5,500 Liftmasters to be made next month. Frandec purchases the motors from an outside supplier, but the frames, supports, and straps may be either manufactured by the company or purchased from an outside supplier....

The Comet Company's budget contains these standards for materials and direct labor for a unit: Material...

The Comet Company's budget contains these standards for materials and direct labor for a unit: Material 5 lbs. @ $1 per lb. = $5 Labor 2 hrs. @ $5 per hr. = $10 Although 2,500 units were budgeted, 3,000 were actually produced. Materials weighing 16,000 lbs. were purchased for $18,400. Materials weighing 15,500 lbs. were issued to production. Direct Labor costs were $33,075 for 6,750 hrs. A.) What's the materials price variance? B.) What's the materials quantity variance? C.) What's...

Consider two products in the same product area: Sales price (per unit) Direct material cost Direct...

Consider two products in the same product area: Sales price (per unit) Direct material cost Direct labor cost Product 1 $62 $16 $14 Product 2 $78 $34 $12 Assuming the above unit price and costs remain unchanged, calculate the net operating profit margins of these products in 2009 and 2010 using the overhead allocation method as in the case. Which of the two products is more profitable? Overhead allocation rate 2009: .61 2010: .98\ I really need help understanding this....

7) If direct labor and direct material costs increase by $1 each, contribution margin ________. A)...

7) If direct labor and direct material costs increase by $1 each, contribution margin ________. A) increases by $20,000 B) increases by $14,000 C) decreases by $24,000 D) decreases by $14,000 Answer the following questions using the information below: Alex Furniture sells a table for $850. His fixed costs are $25,000, while his variable costs are $500 per table. He currently plans to sell 175 tables this month. 8) What is the budgeted revenue for the month assuming that Alex...

Subjects