The XYZ Company has purchased from ABC, Inc. 70,000 circuit boards annually. The price has increased...

 

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The XYZ Company has purchased from ABC, Inc. 70,000 circuit boards annually. The price has increased each year, reaching $68 per unit last year. Because the purchase price has increased significantly, XYZ management has asked that an estimate be made of the cost to manufacture it in its own facilities. The company has little experience with products requiring assembly. The engineering, manufacturing, and accounting departments have prepared a report for management which included the following estimates: An assembly run of 10,000 units. Additional production employees would be hired to manufacture the subassembly. However, no additional equipment, space, or supervision would be needed. The report states that total costs (1) for 10,000 units are estimated at $947,000 The current purchase price is $68 a unit, so the report recommends a continued purchase of the product. Components (outside purchases) $150,000 Assembly labor (2) 300,000 Manufacturing overhead (3) 450,000 General and administrative overhead (4) 87,000 Total costs $947,000 (1) The cost is estimated in a relevant range of 100,000 units. (2) Assembly labor consists of hourly production workers. (3) Manufacturing overhead is applied to products on a direct labor dollar basis. Variable overhead costs vary closely with direct labor dollars. (3) Manufacturing overhead is applied to products on a direct labor dollar basis. Variable overhead costs vary closely with direct labor dollars. Fixed overhead 50% of direct labor dollars Variable overhead 100% of direct labor dollars Manufacturing overhead rate 150% of direct labor dollars (4) General and administrative overhead is applied at 10% of the total manufacturing costs The production cost for each circuit board produced with no learning is cumulative average learning curve The production cost for each circuit board produced 85% with the is Round your answers only to the nearest dollar with no $ sign or period. The XYZ Company has purchased from ABC, Inc. 70,000 circuit boards annually. The price has increased each year, reaching $68 per unit last year. Because the purchase price has increased significantly, XYZ management has asked that an estimate be made of the cost to manufacture it in its own facilities. The company has little experience with products requiring assembly. The engineering, manufacturing, and accounting departments have prepared a report for management which included the following estimates: An assembly run of 10,000 units. Additional production employees would be hired to manufacture the subassembly. However, no additional equipment, space, or supervision would be needed. The report states that total costs (1) for 10,000 units are estimated at $947,000 The current purchase price is $68 a unit, so the report recommends a continued purchase of the product. Components (outside purchases) $150,000 Assembly labor (2) 300,000 Manufacturing overhead (3) 450,000 General and administrative overhead (4) 87,000 Total costs $947,000 (1) The cost is estimated in a relevant range of 100,000 units. (2) Assembly labor consists of hourly production workers. (3) Manufacturing overhead is applied to products on a direct labor dollar basis. Variable overhead costs vary closely with direct labor dollars. (3) Manufacturing overhead is applied to products on a direct labor dollar basis. Variable overhead costs vary closely with direct labor dollars. Fixed overhead 50% of direct labor dollars Variable overhead 100% of direct labor dollars Manufacturing overhead rate 150% of direct labor dollars (4) General and administrative overhead is applied at 10% of the total manufacturing costs The production cost for each circuit board produced with no learning is cumulative average learning curve The production cost for each circuit board produced 85% with the is Round your answers only to the nearest dollar with no $ sign or period.

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Production Cost For each circuit Board produced with no learning curve ADD Component... View the full answer