2. Electric Sound, Inc. manufactures two types of speakers: Deluxe and Extreme. During October, 42 Deluxe...
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2. Electric Sound, Inc. manufactures two types of speakers: Deluxe and Extreme. During October, 42 Deluxe speakers and 319 Extreme speakers were produced. An analysis of the estimated overhead costs reveals the following activities: Activities Cost Drivers Estimated Cost Materials handling Machine setups Quality inspections # of requisitions # of setups # of inspections $140,000 110,000 108,000 $358,000 The cost driver volume for each product was: Cost Driver # of requisitions # of setups # of inspections Deluxe 200 100 Extreme 300 150 500 100 a) Determine the activity rates for each activity. 140000 - 5290reenis it icns 119000 250 =4401setups 105,000 -180 b) How much overhead is assigned to Deluxe? 600 c) How much overhead is assigned to Extreme? d) What is the overhead cost per unit for Deluxe? e) What is the overhead cost per unit for Extreme? 3. Fixed costs = $90,000; Variable cost per unit = $1.20; Selling price per unit = $2 %3D !3! a) What is the break even point in units? 9000 1/2,500 units b) What is the break even point in sales dollars? go000$22s,000 2-1,20 40% c) What is the sales revenue needed to generate a target income of $18,000. (90000+18000)- 40%=270,000 d) What is the margin of safety percentage at the sales level needed to generate the target income of $18,000? 279000 - 22 5o00 16.67% 270,000 2. Electric Sound, Inc. manufactures two types of speakers: Deluxe and Extreme. During October, 42 Deluxe speakers and 319 Extreme speakers were produced. An analysis of the estimated overhead costs reveals the following activities: Activities Cost Drivers Estimated Cost Materials handling Machine setups Quality inspections # of requisitions # of setups # of inspections $140,000 110,000 108,000 $358,000 The cost driver volume for each product was: Cost Driver # of requisitions # of setups # of inspections Deluxe 200 100 Extreme 300 150 500 100 a) Determine the activity rates for each activity. 140000 - 5290reenis it icns 119000 250 =4401setups 105,000 -180 b) How much overhead is assigned to Deluxe? 600 c) How much overhead is assigned to Extreme? d) What is the overhead cost per unit for Deluxe? e) What is the overhead cost per unit for Extreme? 3. Fixed costs = $90,000; Variable cost per unit = $1.20; Selling price per unit = $2 %3D !3! a) What is the break even point in units? 9000 1/2,500 units b) What is the break even point in sales dollars? go000$22s,000 2-1,20 40% c) What is the sales revenue needed to generate a target income of $18,000. (90000+18000)- 40%=270,000 d) What is the margin of safety percentage at the sales level needed to generate the target income of $18,000? 279000 - 22 5o00 16.67% 270,000
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a Activity rate Estimated manufacturing overhead costs estimated activity level Material handling 14... View the full answer
Related Book For
College Mathematics for Business Economics Life Sciences and Social Sciences
ISBN: 978-0321614001
12th edition
Authors: Raymond A. Barnett, Michael R. Ziegler, Karl E. Byleen
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