4.(Points: 1) Using the data from the question three calculate the overhead cost

Question

4.(Points: 1)


Using the data from the question three calculate the overhead costs assigned to one unit of product A. However, now assume we are using machine hours as a single volume driver to assign overhead costs? Round all calculations to the nearest dollar.

a. $700
b. $693
c. $690
d. $780
e. None of the above figures are within $10 of my answer.

6. Boom-Boom Engines used to manufacture turbine engines for the United States Army on a cost-plus basis. The U. S. Army discontinued purchasing this engine due to changes in operational requirements. The cost for a single engine was:
Direct Materials

$200,000
Direct Labor

150,000
Overhead:


Fringe Benefits on Direct Labor

15,000
Depreciation

12,000
Allocated Factory Rent

11,000
Total Cost

$388,000



The Army now wants to place a special order for the turbine engine because they found they made a bad decision. Currently, Boom-Boom has enough idle capacity for the order. Fringe benefits average 10% of direct labor costs. The minimum sales price Boom-Boom Engines can accept is:

a. $365,000
b. $385,000
c. $397,000
d. $408,000
e. None of the above are correct.

7.Christopher’s Stadium Seats can buy 1,000 standard stadium seats from a Indonesian firm for $50 a piece net of all shipping costs. Each standard seat sells for $80 net of marketing and shipping costs. Each standard chair can be processed further and converted into a deluxe seat by adding extra padding and a cooler package to sell for $120 each. The cost card for the deluxe seat includes:
Direct material - standard seat $ 50
Direct material - additional material 30
Direct labor 10
Variable overhead 5
Fixed overhead 30
Total cost per unit $125


Calculate the breakeven selling price for the deluxe chair. That is, the selling price where Christopher’s Stadium Seats would be indifferent between selling the seats as standards or deluxe.

a. $75
b. $95
c. $80
d. $125
e. none of the above

Explanation / Answer

6. a. $365,000 7.b. $95 For first question. the question itself is not posted...

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