1- A manufacturing firm has a single plant. The following information is collected from the last...

  

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1- A manufacturing firm has a single plant. The following information is collected from the last year: the total direct labor cost was $850000. The total production quantity of the plant was 50000 pieces. The material cost per unit is $17 per piece. Additionally, last year the following costs are incurred in this manufacturing firm: Cost Item Maintenance Plant Security Sales and Marketing Human Resources department Accounting department Finance department Shipping and receiving costs Equipment depreciation Heating and air conditioning of the plant Research and development Office space Lightning of the plant Administrative support personnel Corporate executives Insurance of the machinery Material handling costs Cost ($) 120,000 20,000 120,000 40,000 60,000 80,000 90,000 140,000 92,000 110,000 190,000 25,000 220,000 220,000 75,000 110,000 a. Calculate the factory overhead rate and corporate overhead rates. b. (In this part, suppose that the manufacturing firm had a second plant in which the direct labor cost was $450000 and the production quantity was 60000 pieces last year. Since this plant is in another city, the material cost per unit is different from Plant 1 and it is $26 which is different from Plant 1. Total factory expenses appeared to be $725760. Calculate the factory overhead rate for this plant. If necessary, recalculate the factory overhead rate for Plant 1 and corporate overhead rates that are calculated in the first part of the question with the inclusion of this new plant. c. Assume that a customer order of 325 parts to be processed in one of these plants. Plant 2 is a more automated system than Plant 1. The total time to process a single part is 45 min in Plant 1 and 41 min in Plant 2. The direct labor rates are14 $/hr and 11 $/hr in Plants 1 and 2, respectively. The material cost of each product for this order is 22 $/piece in Plant 1 and 26 $/piece in Plant 2. Additionally, the tooling cost Plant 1 is 20 $/piece and in Plant 2 it is23 $/piece. What are the costs of processing the whole job in Plant 1 and Plant 2? Which plant should be used for this production? d. Now suppose that the unit process time in the second plant is unknown. For what values of this unit process time the total cost of producing this job in Plant 2 is less than Plant 1. 1- A manufacturing firm has a single plant. The following information is collected from the last year: the total direct labor cost was $850000. The total production quantity of the plant was 50000 pieces. The material cost per unit is $17 per piece. Additionally, last year the following costs are incurred in this manufacturing firm: Cost Item Maintenance Plant Security Sales and Marketing Human Resources department Accounting department Finance department Shipping and receiving costs Equipment depreciation Heating and air conditioning of the plant Research and development Office space Lightning of the plant Administrative support personnel Corporate executives Insurance of the machinery Material handling costs Cost ($) 120,000 20,000 120,000 40,000 60,000 80,000 90,000 140,000 92,000 110,000 190,000 25,000 220,000 220,000 75,000 110,000 a. Calculate the factory overhead rate and corporate overhead rates. b. (In this part, suppose that the manufacturing firm had a second plant in which the direct labor cost was $450000 and the production quantity was 60000 pieces last year. Since this plant is in another city, the material cost per unit is different from Plant 1 and it is $26 which is different from Plant 1. Total factory expenses appeared to be $725760. Calculate the factory overhead rate for this plant. If necessary, recalculate the factory overhead rate for Plant 1 and corporate overhead rates that are calculated in the first part of the question with the inclusion of this new plant. c. Assume that a customer order of 325 parts to be processed in one of these plants. Plant 2 is a more automated system than Plant 1. The total time to process a single part is 45 min in Plant 1 and 41 min in Plant 2. The direct labor rates are14 $/hr and 11 $/hr in Plants 1 and 2, respectively. The material cost of each product for this order is 22 $/piece in Plant 1 and 26 $/piece in Plant 2. Additionally, the tooling cost Plant 1 is 20 $/piece and in Plant 2 it is23 $/piece. What are the costs of processing the whole job in Plant 1 and Plant 2? Which plant should be used for this production? d. Now suppose that the unit process time in the second plant is unknown. For what values of this unit process time the total cost of producing this job in Plant 2 is less than Plant 1.

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Answer of Part a Calculation of Factory Overheads Rate Calculation of Corporate Overhead rate Cost Item Cost Cost Item Cost Maintenance 120000 Sales a... View the full answer