(Cost driver and pre-determined overhead) Memories, Inc. (MI) produces souvenir
ID: 2556483 • Letter: #
Question
(Cost driver and pre-determined overhead) Memories, Inc. (MI) produces souvenir figurines that are sold wholesale to gift They have created a new line of dolls representing historical figures. The ops. ompany's goal is to produce and sell 350,000 dolls each year. MI plans to keep pproximately a one-month supply of dolls in finished goods inventory MI will have 10 production lines. Each of the five workers on each line will be esponsible for one of the five stages of production: molding, cleaning, painting ishing, and packaging. Each of the 10 production lines can produce 20 dolls per hour. deals exclusively with Quality Materials, Inc. to purchase raw materials and quipment. All materials (plastic, molds, paint, etc.) are delivered within two days of prdering and MI generally holds only a one- or two- day supply in raw materials nventory The projected materials costs are: Material cost per doll Plastic Doll molds Varnish Paint Packaging $.12 .20 .08 .30 .04Explanation / Answer
0.74
b. Actual per unit direct labour cost = Actual direct labour cost/ actual number of dolls produced
Actual per unit direct labour cost= 840082/336033 =2.5
c.
a.Projected per unit material cost Plastic 0.12 Doll Molds 0.2 Varnish 0.08 Paint 0.3 Packaging 0.04 Projected per unit material cost0.74
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