Table 1 Selected production and financial data Product Thickness Coated/Uncoated
ID: 2386345 • Letter: T
Question
Table 1Selected production and financial data
Product Thickness Coated/Uncoated Slit Average Rolls per Batch Materials Cost per Roll Selling Price per Roll
A .013 Coated Yes 50 $4,800 $12,600
B .014 Uncoated No 2 $5,200 $13,500
C .015 Coated Yes 35 $5,600 $14,200
D .020 Coated No 1 $7,400 $19,500
Table 2
Overhead
Total Depreciation is $800,000 = Product Change **$8,000 Slitting $70,000 Net *$722,000
Total Labor is $300,000 = Product Change ** $3,000 Slitting $25,000 Net *$272,000
Total Energy is $500,000 = Product Change **$5,000 Slitting $80,000 Net * $415,000
Total Other is $198,470 = Product Change **$1,000 Slitting $20,000 Net * $177,470
Total Waste is $ 30,000 = Product Change **$30,000 Slitting -0- Net -0-
* Net is equal to total amount minus product change cost and minus slitting cost. This amount represents the general
overhead, ie. Overhead that is not specific to a particular product.
**Product change is required of all four products and the cost is to be divided equally among the four products.
Total product cost is equal to materials, overhead, product cost and where incurred slitting costs.
Requirements
1. Prepare a schedule proving that overhead is currently 105% of material costs.
2. Prepare a schedule showing cost per roll of each of the four products using the 105% overhead rate.
3. As Eastvaco
Explanation / Answer
Thickness Coated/uncoated Slit average rolls/ batch ( c) Material cost per roll (a) Selling price per roll (b) Contribution per roll d=(b-a) Total contribution (c*d) 0.013 Yes 50 4800 12600 7800 390000 0.014 No 2 5200 13500 8300 16600 0.015 Yes 35 5600 14200 8600 301000 0.02 No 175 7400 19...
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