Echo Sports Company produces home basketball goal systems consisting of a stand,
ID: 2759883 • Letter: E
Question
Echo Sports Company produces home basketball goal systems consisting of a stand, backboard, rim, and net. The company has sufficient orders and capacity to produce 800 goal systems per month. Manufacturing costs and other costs are shown below: Administrative salary 2,400.00 Depreciation on office equipment 400.00 Depreciation on production equipment 1,800.00 Electric and other factory utilities 1,400.00 Factory supervisor salary 2,000.00 Fiberglass backboards purchased from another manufacturer 30,400.00 Insurance on factory building and contents 600.00 Maintenance costs on factory equipment 1,200.00 Nets and rims purchased from another manufacturer 6,400.00 Rent on factory building 2,000.00 Sales commissions 1,600.00 Steel pipe for stand fabrication 14,920.00 Supplies for administrative office 600.00 Wages for production workers 14,720.00 80,440.00 Enter each manufacturing cost in the appropriate column. Direct Direct Manufacturing Leave blank if it does not fit in any column. Materials Labor Overhead Administrative salary Depreciation on office equipment Depreciation on production equipment Electric and other factory utilities Factory supervisor salary Fiberglass backboards purchased from another manufacturer Insurance on factory building and contents Maintenance costs on factory equipment Nets and rims purchased from another manufacturer Rent on factory building Sales commissions Steel pipe for stand fabrication Supplies for administrative office Wages for production workers Totals Compute the cost to produce 1 basketball goal system (cost per unit): What will the cost per unit be if we increase production by 100 units with a proportional cost increase for direct materials and direct labor, but no increase in overhead cost? Echo Sports Company produces home basketball goal systems consisting of a stand, backboard, rim, and net. The company has sufficient orders and capacity to produce 800 goal systems per month. Manufacturing costs and other costs are shown below: Administrative salary 2,400.00 Depreciation on office equipment 400.00 Depreciation on production equipment 1,800.00 Electric and other factory utilities 1,400.00 Factory supervisor salary 2,000.00 Fiberglass backboards purchased from another manufacturer 30,400.00 Insurance on factory building and contents 600.00 Maintenance costs on factory equipment 1,200.00 Nets and rims purchased from another manufacturer 6,400.00 Rent on factory building 2,000.00 Sales commissions 1,600.00 Steel pipe for stand fabrication 14,920.00 Supplies for administrative office 600.00 Wages for production workers 14,720.00 80,440.00 Enter each manufacturing cost in the appropriate column. Direct Direct Manufacturing Leave blank if it does not fit in any column. Materials Labor Overhead Administrative salary Depreciation on office equipment Depreciation on production equipment Electric and other factory utilities Factory supervisor salary Fiberglass backboards purchased from another manufacturer Insurance on factory building and contents Maintenance costs on factory equipment Nets and rims purchased from another manufacturer Rent on factory building Sales commissions Steel pipe for stand fabrication Supplies for administrative office Wages for production workers Totals Compute the cost to produce 1 basketball goal system (cost per unit): What will the cost per unit be if we increase production by 100 units with a proportional cost increase for direct materials and direct labor, but no increase in overhead cost?Explanation / Answer
Answer
Answer 1
Figures in $
Particulars
Direct material
Direct Labour
Manufacturing overhead
Administrative Salary
Depreciation on office equipment
Depreciation on Production equipment
1800
Electric and other factory utilities
1400
Factory Supervisor salary
2000
Fiberglass backboards purchased from another manufacturer
30400
Insurance on factory building and Contents
600
Maintenance costs on factory equipment
1200
Net & rims purchased from another manufacturer
6400
Rent on factory building
2000
Sales Commissions
Steel pipe for stand Fabrication
14920
Supplies for administrative office
Wages for production workers
14720
Total
51720
14720
9000
Answer 2
Figures in $
Particulars
Amount
Direct material
a
51720
Direct labor
b
14720
Manufacturing overhead
c
9000
Total cost of production (a+b+c)
d
75440
Total goal systems
e
800
cost to produce 1 basketball goal system (d/e)
94.30
Answer 3
Figures in $
Particulars
Amount
Direct material
a
58185
(51720*900)/800
Direct labor
b
16560
(14720*900)/800
Manufacturing overhead
c
9000
Total cost of production (a+b+c)
d
83745
Total goal systems (800+100)
e
900
cost to produce 1 basketball goal system (d/e)
93.05
Figures in $
Particulars
Direct material
Direct Labour
Manufacturing overhead
Administrative Salary
Depreciation on office equipment
Depreciation on Production equipment
1800
Electric and other factory utilities
1400
Factory Supervisor salary
2000
Fiberglass backboards purchased from another manufacturer
30400
Insurance on factory building and Contents
600
Maintenance costs on factory equipment
1200
Net & rims purchased from another manufacturer
6400
Rent on factory building
2000
Sales Commissions
Steel pipe for stand Fabrication
14920
Supplies for administrative office
Wages for production workers
14720
Total
51720
14720
9000
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