Maine Temps, a large labour contractor, supplies contract labour to building-construction companies. For the year, Maine Temps has budgeted to supply 88,000 hours of contract labour. Its variablecosts are $10 per hour, and its fixed costs are $176,000. Roger Mason, the general manager, has proposed a cost-plus approach for pricing labour at full cost plus 10%.RequiredRequired1. Calculate the price per hour that Maine Temps should charge based on Mason'sproposal.2. The marketing manager supplies the following information on demand levels atdifferent prices:Price perHourDemand(Hours)13129,00015106,0001788,0001875,0002066,000Maine Temps can meet any of these demand levels. Fixed costs will remainunchanged for all the demand levels. On the basis of this additional information,calculate the price per hour that Maine Temps should charge to maximizeoperating income.3. Comment on your answers to requirements 1 and 2. Why are they the sameor different?Xosal.calculate the price. (Complete all answer boxes. Round the price per hour to two

Variable costs are costs that varies with the change in the level of output.Fixed costs are costs…

Answered: Tane Temps, a large labo actor,…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 7PB: Remarkable Enterprises requires four units of part A for every unit of Al that it produces....

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Colonels uses a traditional cost system and estimates next years overhead will be $480,000, with the estimated cost driver of 240,000 direct labor hours. It manufactures three products and estimates these costs: If the labor rate is $25 per hour, what is the per-unit cost of each product?
Gent Designs requires three units of part A for every unit of Al that it produces. Currently, part A is made by Gent, with these per-unit costs in a month when 4.000 units were produced: Variable manufacturing overhead is applied at $1.00 per unit. The other $0.30 of overhead consists of allocated fixed costs. Gent will need 6,000 units of part A for the next years production. Cory Corporation has offered to supply 6,000 units of part A at a price of $7.00 per unit. It Gent accepts the offer, all of the variable costs and $1,200 of the fixed costs will be avoided. Should Gent Designs accept the offer from Cory Corporation?
Remarkable Enterprises requires four units of part A for every unit of Al that it produces. Currently, part A is made by Remarkable, with these per-unit costs in a month when 4,000 units were produced: Variable manufacturing overhead is applied at $1.60 per unit. The other $0.50 of overhead consists of allocated fixed costs. Remarkable will need 8,000 units of part A for the next years production. Altoona Corporation has offered to supply 8,000 units of part A at a price of $8.00 per unit. If Remarkable accepts the offer, all of the variable costs and $2,000 of the fixed costs will be avoided. Should Remarkable accept the offer from Altoona Corporation?
Patterson Corporation expects to incur 70,000 of factory overhead and 60,000 of general and administrative costs next year. Direct labor costs at 5 per hour are expected to total 50,000. If factory overhead is to be applied per direct labor hour, how much overhead will be applied to a job incurring 20 hours of direct labor? a. 120 b. 260 c. 28 d. 140
Box Springs, Inc., makes two sizes of box springs: twin and double. The direct material for the twin is $25 per unit and $40 s used in direct labor, while the direct material for the double is $40 per unit, and the labor cost is $50 per unit. Box Springs estimates it will make 5,000 twins and 9,000 doubles in the next year. It estimates the overhead for each cost pool and cost driver activities as follows: How much does each unit cost to manufacture?
Georgia Temps, a large labor contractor, supplies contract labor to building-construction companies. For 2017, Georgia Temps has budgeted to supply 84,000 hours of contract labor. Its variable costs are $13 per hour, and its fixed costs are $168,000. Roger Mason, the general manager, has proposed a cost-plus approach for pricing labor at full cost plus 20%. Q. Calculate the price per hour that Georgia Temps should charge based on Mason’s proposal.
K Company estimates that overhead costs for the next year will be $5,125,000 for indirect labor and $1,050,000 for factory utilities. The company uses direct labor hours as its overhead allocation base. If 130,000 direct labor hours are planned for this next year, what is the company's plantwide overhead rate? $0.25 per direct labor hour. O $47.50 per direct labor hour. O $39.42 per direct labor hour. O $8.08 per direct labor hour. O $0.12 per direct labor hour.
K Company estimates that overhead costs for the next year will be $4,000,000 for indirect labor and $970,000 for factory utilities. The company uses direct labor hours as its overhead allocation base. If 140,000 direct labor hours are planned for this next year, what is the company's plantwide overhead rate? Multiple Choice $0.03 per direct labor hour. O $0.14 per direct labor hour. $6.93 per direct labor hour. O $28.57 per direct labor hour. O $35.50 per direct labor hour.
Muspest Supplies is currently evaluating the cost of manufacturing some of the components utilised in their products. Currently the company expects to need 6 000 parts each month. A supplier of the part has been identified and the total cost of purchasing the parts on a monthly basis would be $97 000. In analysing the part costs, the direct labour and materials cost would be $64 000 and the variable overheads would be $22 000.Based only on the relevant cost per unit, which would be the preferred option of Muspest Supplies?HD EDUCATIONA. Unit costs to produce the part would be $14.33 with the unit cost to purchase of $ 16.17. In this case, the best option would be to commence purchasing the part.B. Unit costs to produce the part would be $10.67 with the unit cost to purchase of $ 16.17. In this case, the best option would be to continue to make the part.C. None of the other answers D. Unit costs to produce the part would be $14.33 with the unit cost to purchase of $ 16.17. In this case,…
Pittmon Corporation is developing direct labor standards. The basic direct labor wage rate is $14.70 per hour. Employment taxes are 10% of the basic wage rate. Fringe benefits are $4.78 per hour. A particular product requires 1.20 direct labor-hours per unit. The allowance for breaks and personal needs is 0.10 direct labor-hours per unit. The allowance for cleanup, machine downtime, and rejects is 0.14 direct labor-hours per unit. Required: a. Determine the standard rate per direct labor-hour. (Round your answer to 2 decimal places. Omit the "S" sign in your response.) Standard rate $ per DLHs b. Determine the standard direct labor-hours per unit of product. (Round your answer to 2 decimal places.) Standard direct labor-hours per unit c. Determine the standard labor cost per unit of product. (Round your intermediate and final answer to 2 decimal places. Omit the "$" sign in your response.) Standard labor cost $ per unit
Apex Corporation estimates that its production for the coming year will be 10,000 units with the following unit costs: Direct materials P40 Direct labor P60 Direct labor is paid at the rate of P24 per hour. The machine should be run for 20 minutes to produce one unit. Total estimated overhead is expected to consist of P400,000 for variable overhead and P400,000 for fixed overhead. What is the predetermined overhead rate based on direct labor hours? A P32 per direct labor hour B) P35 per direct labor hour C) P45 per direct labor hour D) P40 per direct labor hour
Palladium Inc. produces a variety of household cleaning products. Palladium’s controller has developed standard costs for the following four overhead items: Overhead Item Total Fixed Cost Variable Rate per DirectLabor Hour Maintenance $ 86,000 $0.20 Power 0.45 Indirect labor 140,000 2.10 Rent 35,000 Next year, Palladium expects production to require 90,000 direct labor hours. Required: 1. Prepare an overhead budget for the expected level of direct labor hours for the coming year. Palladium Inc. Overhead Budget For the Coming Year Variable costs: Rate per Hour Activity Level 90,000 Hours Maintenance $ $ Power Indirect labor Total variable cost $ Fixed costs: Maintenance $ Indirect labor Rent Total fixed costs $ Total overhead costs $ 2. Prepare an overhead budget that reflects…

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