Question: how do i calculate overhead? /ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress=false Zee-Drive Ltd. Is a computer manufacturer. One of the Items they make is monitors. Zee-Drive has the opportunity to
how do i calculate overhead?

/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress=false Zee-Drive Ltd. Is a computer manufacturer. One of the Items they make is monitors. Zee-Drive has the opportunity to purchase 16,000 monitors from an outside supplier for $203 per unit. One of the company's cost-accounting Interns prepared the following schedule of Zee-Drive's cost to produce 16,000 monitors: Total cost of producing 16,000 monitors Unit cost Direct materials $ 1,936,000 $ 121 Direct labor 1,056,000 66 Variable factory overhead 464,000 29 Fixed manufacturing overhead 416,000 26 Fixed non-manufacturing overhead 608,000 38 $ 4,480,000 $ 280 You are asked to look over the intern's estimate before the information is shared with members of management who will decide to continue to make the monitors or buy them. The company's controller believes that the estimate may be Incorrect because it includes costs that are not relevant. If Zee-Drive buys the monitors, the direct labor force currently employed in producing the monitors will be terminated and there would be no termination costs incurred. There are no materials on hand and no commitments to suppliers to purchase materials, so all materials would need to be purchased to make the monitors. Variable overheads are avoidable if monitors are bought. Fixed manufacturing overhead costs would be reduced by $52,300, but non-manufacturing costs would remain the same if monitors are bought. Check My Work Previous
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