Find the unit product cost of each product

Assignment Help Financial Accounting
Reference no: EM1311202

Determine the unit product cost from the given data.

Erte, Inc., manufactures two models of high pressure steam valves, the XR7 model and the ZD5 model. Data regarding the two products follow:

Products

Direct labor-hours

Annual production

Total Direct labor-hours

XR7

0.2 DLHs per unit

20,000 units

4,000 DLHs

ZD5

0.4 DLHs per unit

40,000 units

16,000 DLHs

 

 

 

20,000 DLHs

Additional information about the company follows:

a. Product XR7 requires $35 in direct materials per unit, and product ZD5 requires $25.
b. The direct labor rate is $20 per hour.
c. The company has always used direct labor-hours as the base for applying manufacturing overhead cost to products. Manufacturing overhead totals $1,480,000 per year.
d. Product XR7 is more complex to manufacture than product ZD5 and requires the use of a special milling machine.
e. Because of the special work required in (d) above, the company is considering the use of activity-based costing to apply overhead cost to products. Three activity cost pools have been identified and the first-stage allocations have been completed. Data concerning these activity cost pools appear below:

Assume that the company continues to use direct labor-hours as the bas for applying overhead cost to products.

Determine the unit product cost of each product.

Reference no: EM1311202

Questions Cloud

Computation of net present value of the project : Computation of net present value of the project and Determine the net present value of the projects based on a zero discount rate
Find the activity rate for each activity cost pool : Find the activity rate for each activity cost pool. Also compute the amount of overhead cost that would be applied to each product.
Probabilities of the given events : In a binomial distribution n = 8 and π = 0.2. Determine the probabilities of the following events.
Price discrimination strategy of united airlines : Price Discrimination: Assume that United Airlines knows that it faces the following demand equations and corresponding marginal revenue equations for its (one-way) SFO to Las Vegas route
Find the unit product cost of each product : Assume that the company continues to use direct labor-hours as the bas for applying overhead cost to products - Evaluate the unit product cost of each product
Find weight percent austenite & weight percent proeutectoid : A 0.65 percent C hypoeutctoid plain carbon steel is slowly cooled from about 950°C to a temperature just slightly above 723°C. calculate the weight percent austenite and weight percent proeutectoid ferrite in this steel. Explain it.
Monopoly pricing and elasticity : Explain why a monopolist will never set a price (and produce the corresponding output) at which the demand is price-inelastic.
Determine the predetermined overhead rate : Determine the pre determined overhead rate from the given data -  determine the predetermined overhead rate.
Cartel behavior in coal industry : Assume that the soft coal industry is a competitive industry and it is in long run equilibrium. Now assume that the firms in the industry form a cartel.

Reviews

Write a Review

Financial Accounting Questions & Answers

  Determine the direct materials price and efficiency variance

Determine the direct materials price and efficiency variances for Shirt Company. Evaluate the direct labor price and efficiency variances for Shirt Company.

  Determine the amount of gross profit

Determine the amount of gross profit to be recognized in each of the three years. Prepare all required journal entries for each of the years (credit "Various accounts" for construction costs incurred). Purpose a partial balance sheet for 2009 a..

  Determine the after-tax cost to maturity

For each of the following $1000-par-value bond, assuming annual interest payment and a 40% tax rate, determine the after-tax cost to maturity using the approximation formula.

  Identify two relevant and two non-relevant costs

Identify a decision that has recently been made or will be made in the near future in your organization.  Identify two relevant and two non-relevant costs in this decision.

  When a firm has financial leverage

When a firm has financial leverage and A management that wanted to increase the financial leverage of its firm

  Evaluate ending inventory and cost of goods sold

Evaluate ending inventory and cost of goods sold under each method, and then compare results.

  How much to expense for the present year

Adjusting to $600,000 will add how much to expense for the present year?

  Comparison between consumer price index

Comparison between Consumer Price Index and Producer Price Index and Estimation of Item's Current Price.

  Evaluate the npv of the project

The subsidiary will be sold at the end of three years for an estimated €9.9 million. evaluate the NPV of the project?

  Describe the step approach of non-controlling interest

Purpose a report for Joy, describe the step approach to the computation of Non-Controlling Interest and the effects of the approach in the years after acquisition date

  Evaluate a tolerable difference for analytical procedure

Evaluate a tolerable difference for your analytical procedure.

  Examine the operations of each company

Examine the operations of each company.  How is the company doing in this present economic environment?  Is the world economy affecting the company?  How?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd