A cost analyst for Stamper Manufacturing Co. has assembled the following data ab
ID: 2427708 • Letter: A
Question
A cost analyst for Stamper Manufacturing Co. has assembled the following data about the Model 24 stamp pad:
The piece of sheet metal from which 7 pad cases can be made costs $0.15.
This amount is based on the number of sheets in a 4,200-pound bundle of sheet metal, which is the usual purchase quantity.
The foam pad that is put in the case costs $0.08, based on the number of pads that can be cut from a large roll of foam.
Production standards, based on engineering analysis recognizing attainable performance, provide for the manufacture of 1,530 pads by 6 workers in an eight-hour shift. The standard direct labor pay rate is $11.15 per hour.
Manufacturing overhead is applied to units produced using a predetermined overhead application rate of $16.0 per direct labor hour, of which $6.45 per hour is fixed manufacturing overhead.
Calculate the standard absorption cost of a package of 20 stamp pads. (Do not round your intermediate calculations. Round final answer to 2 decimal places.)
Stamper Manufacturing Co.'s management is considering a special promotion that would result in increased sales of 2,000 packages of 20 pads per package. Calculate the cost per package that is relevant for this analysis. (Do not round your intermediate calculations. Round final answer to 2 decimal places.)
A cost analyst for Stamper Manufacturing Co. has assembled the following data about the Model 24 stamp pad:
Explanation / Answer
Answer : Standard absorption cost
Particluars Amt (for 20 Units)
Material
Metal Sheet (0.15/7*20) 0.43
Foam (0.08*20) 1.60
Labor (48/1530*20)*11.15 7.00
Variable overhead ((16-6.45)*0.62) 5.92
Fixed overhead 4.04
Total Cost of 20 Pads $ 18.99
Answer Cost for 2000 packages of 20 Pads
Particulars Unit (40000)
Material
Metal sheet (5715*0.15) 857.25
Foam (40000*0.08) 3200.00
Labour (1255*11.15) 13993.25
Variable over heads (1255*9.55) 11985.25
Fixed Over head (1255* 6.45) 8094.75
Total cost for 40000 units 38130.50
Cost per package = 38130.50/40000*20
= $ 19.07
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