The following data apply to the operation of a particular automated manufacturing system: Direct labor rate =
Question:
The following data apply to the operation of a particular automated manufacturing system:
Direct labor rate = $15.00/h
Number of operators required = 1
Applicable labor factory overhead rate = 40%
Capital investment in system = $300,000
Service life = 7 years
Salvage value = $30,000
Applicable machine factory overhead rate = 50%
The system is operated for one shift (2500 h/yr.). Use a rate of return of 25% to determine the appropriate hourly rate for this worker-machine system.
a. Define labor hourly, then, add overhead to define labor hourly rate
b. Draw cash flow of the equipment
c. Define UAC of using the equipment
d. Define hourly rate of the equipment
e. Adding overhead of hourly rate of equipment
f. Combing labor and equipment hourly rates to hourly rate for this worker-machine system
Accounting concepts and applications
ISBN: 978-0538745482
11th Edition
Authors: Albrecht Stice, Stice Swain