Reference no: EM132764171
The Bertrand company manufactures radiators for the automotive industry. It sells all its Annual production of 80,000 units at a price of $80 per unit. The company wishes to evaluate the possibility of modifying its manufacturing process. This modification would reduce by 30 minutes direct labor time, which represents 25% of the time required in MOD per unit.
- Currently, the time required to manufacture a radiator is 2 hours and the hourly rate is 12$/hour. In addition, this would affect variable manufacturing overhead, as it has been determined that these The latter vary according to the direct labor time. On the other hand, the fees The fixed manufacturing overheads would increase by $240,000 per year.
Additional Data :
Raw materials: $10 per unit
MOD rate: 12$ per hour
Manufacturing overheads
Variables: 8$ per hour
Fixed: $720 000
Selling expenses
Variables: 10% of the selling price
Fixed: $640,000
Since the company sells all its production, there is no beginning and end inventory.
Problem A) Prepare the overall analysis using the full cost method.
Problem B) Prepare the overall analysis using the variable cost method.
Problem C) Prepare the differential analysis of the effects of this change.
Problem D) If the beginning inventory was 5,000 units and the closing inventory was 8,500 units, what is the number of units in the inventory?
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