The Smart Company has been in business for 10 years and is located in Toronto, Ontario. The company manufactures two products, blenders, and radios. The company has estimated its overhead in its inspection department to be $240,000. The company produces 60,000 blenders and 80,000 radios each year. Blender production requires 20,000 machine hours, radio production requires 30,000 machine hours. The company completes 120 inspections per year, 40 inspections for blenders, and the remainder for radios.

Calculate how much of the inspection overhead should be allocated to blenders and radios? If there is a difference in the allocated overhead, explain why.

The Smart Company has been in business for 10 years and is located in Toronto, Ontario.

The Smart Company has the following financial data:

1. Total sales are $500,000
2. 5.000 units were sold
3. The unit variable cost is $60
4. The fixed costs are $400,000 for manufacturing and $100,000 for selling

Calculate the Contribution Margin per unit, the break even in units and the break even in sales, the net income or loss if only 10,000 units are sold. Explain, will the unit cost for variable and fixed change with the change in the total number of units manufactured.

Answer rating: 100% (QA)

Calculate how much of the inspection overhead should be allocated to blenders and radios If there is a difference in the allocated overhead explain why ANSWER If the company allocates its overhead bas... View the full answer