India specializes in the manufacture and sale of candles. It needs your expertise to calculate and...

   

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India specializes in the manufacture and sale of candles. It needs your expertise to calculate and analyze its costs. The company has 2 production workshops: The wax melting workshop produces unscented wax loaves and lemongrass- scented wax loaves. This process results in a loss of 10% of the material consumed, i.e. to obtain 90 kg of loaves, 100 kg of wax must be used. The waste is disposed of directly, as the wax is unsuitable for further use. The unit of work is the MOD hour. The wax loaves are then sent to the molding workshop to be transformed into ready-to-sell candles. The unit of output is the number of candles produced. A maintenance center adjusts and cleans the machines, since wax leaves greasy marks on all machines. The work unit is the hour of maintenance. Initial stocks are as follows: Wax: 80 kg at €5 per kg Wick: 3000 meters at 0.20€ per meter Perfume: 5 liters at 115€ per liter The company uses the weighted average cost method (calculated on the basis of initial inventory and purchases for the period) to value inventory withdrawals. During the month. the company purchased 900kg of wax at €6 per kg and 25 liters of perfume at €104 per liter. Production during the month was: -9000 unscented candles - 3125 scented candles Consumption of wax loaves, wicks and perfume was as follows: 15 kg loaf of unscented wax produces 100 (square) candles 16 kg loaf of scented wax produces 125 (round) candles. The unscented wax blocks required 1600 meters of wick. Scented wax blocks required 8 liters of perfume and 400 meters of wick. 700 hours of MOD (including 400 hours for unscented candles) were required in the wax melting workshop. The hourly rate is €15.50. In the molding workshop, payroll costs amounted to 3400€. The maintenance center worked 50h for the casting workshop, 80h for the molding workshop. The hourly rate is €12.50. Sales for the month : Unscented candles: 7500 units at €4 each Scented candles: 3,000 units at €5.20 each We also know that the accounts recorded: -overheads of €4 500 for the molding - overheads of €4,500 for the molding workshop - indirect costs of €1,000 for the maintenance center - direct costs of €2,500 for scented candles. Calculate the full production costs per unit for each model produced, using the homogeneous section method. Determine the profit on sales of scented and unscented candles. India specializes in the manufacture and sale of candles. It needs your expertise to calculate and analyze its costs. The company has 2 production workshops: The wax melting workshop produces unscented wax loaves and lemongrass- scented wax loaves. This process results in a loss of 10% of the material consumed, i.e. to obtain 90 kg of loaves, 100 kg of wax must be used. The waste is disposed of directly, as the wax is unsuitable for further use. The unit of work is the MOD hour. The wax loaves are then sent to the molding workshop to be transformed into ready-to-sell candles. The unit of output is the number of candles produced. A maintenance center adjusts and cleans the machines, since wax leaves greasy marks on all machines. The work unit is the hour of maintenance. Initial stocks are as follows: Wax: 80 kg at €5 per kg Wick: 3000 meters at 0.20€ per meter Perfume: 5 liters at 115€ per liter The company uses the weighted average cost method (calculated on the basis of initial inventory and purchases for the period) to value inventory withdrawals. During the month. the company purchased 900kg of wax at €6 per kg and 25 liters of perfume at €104 per liter. Production during the month was: -9000 unscented candles - 3125 scented candles Consumption of wax loaves, wicks and perfume was as follows: 15 kg loaf of unscented wax produces 100 (square) candles 16 kg loaf of scented wax produces 125 (round) candles. The unscented wax blocks required 1600 meters of wick. Scented wax blocks required 8 liters of perfume and 400 meters of wick. 700 hours of MOD (including 400 hours for unscented candles) were required in the wax melting workshop. The hourly rate is €15.50. In the molding workshop, payroll costs amounted to 3400€. The maintenance center worked 50h for the casting workshop, 80h for the molding workshop. The hourly rate is €12.50. Sales for the month : Unscented candles: 7500 units at €4 each Scented candles: 3,000 units at €5.20 each We also know that the accounts recorded: -overheads of €4 500 for the molding - overheads of €4,500 for the molding workshop - indirect costs of €1,000 for the maintenance center - direct costs of €2,500 for scented candles. Calculate the full production costs per unit for each model produced, using the homogeneous section method. Determine the profit on sales of scented and unscented candles.

Answer rating: 100% (QA)

To calculate the full production costs per unit for each model produced using the homogeneous section method we need to consider the direct costs indirect costs and overhead costs associated with the ... View the full answer