The Uniforever Corporation sells a lip balm called Fruity which is sold in a lipstick-type tube....

 

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The Uniforever Corporation sells a lip balm called Fruity which is sold in a lipstick-type tube. The company manufactures both the empty tube and the lip balm that goes in the tube. The product will be sold to wholesalers in boxes of 250 tubes for $840 per box. Fixed costs of $710,000 will be allocated to this product. Expected sales and production volume is 71.000 boxes of Fruity. The following are the costs of production per box. Direct labor $230 per box Direct materials $290 per box Total overhead (variable and fixed) $170 per box Total $690 per box Uniforever Corporation has approached a supplier to discuss the possibility of purchasing empty tubes. The purchase price of the empty tubes from the supplier would be $150 per 250 tubes. If the Uniforever Corporation accepts the purchase proposal, it is estimated that direct labor and variable overhead costs would be reduced by 20% and direct material costs would be reduced by 30%. a) What is the variable overhead rate per box of Fruity? Total overhead rate per box: $ Fixed overhead allocated per box: $ Variable overhead rate per box: $ b) If the empty tubes are purchased, what is the total savings per box? Savings on direct labor: $ Savings on direct materials: $ Savings on variable overhead: $ The Uniforever Corporation sells a lip balm called Fruity which is sold in a lipstick-type tube. The company manufactures both the empty tube and the lip balm that goes in the tube. The product will be sold to wholesalers in boxes of 250 tubes for $840 per box. Fixed costs of $710,000 will be allocated to this product. Expected sales and production volume is 71.000 boxes of Fruity. The following are the costs of production per box. Direct labor $230 per box Direct materials $290 per box Total overhead (variable and fixed) $170 per box Total $690 per box Uniforever Corporation has approached a supplier to discuss the possibility of purchasing empty tubes. The purchase price of the empty tubes from the supplier would be $150 per 250 tubes. If the Uniforever Corporation accepts the purchase proposal, it is estimated that direct labor and variable overhead costs would be reduced by 20% and direct material costs would be reduced by 30%. a) What is the variable overhead rate per box of Fruity? Total overhead rate per box: $ Fixed overhead allocated per box: $ Variable overhead rate per box: $ b) If the empty tubes are purchased, what is the total savings per box? Savings on direct labor: $ Savings on direct materials: $ Savings on variable overhead: $

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a What is the variable overhead rate per box of Fruity Total overhead per box 170 Fix... View the full answer