For many years zapro compnay manufacturing a single product

Assignment Help Accounting Basics

Reference no: EM13597440

For many years, Zapro Compnay manufacturing a single product called a mono-relay. Then three years ago, the company automated a portion of its plant at the same time introduced a second product called a bi-relay that has become increasingly popular. The bi-relay is a more complex product, requiring one hour of direct labor time per unit to manufacture and extensive machining in the automated portion of the plant. The mono-relay requires only 0.75 hours of direct labor time per unit and only a small amount of machining. Manufacturing overhead costs are currently assigned to products on the basis of direct labor-hours.

Despite the growing popularity of the company's new bi-relay, profits have been declining steadily. Management is beginning to believe that there may be a problem with the company's costing system. Maters and labor costs per unit are as follows:

Direct Materials Mono-relay ($35) Bi-relay ($48)
Direct labor (.75 hours and 1.0 hours @ $12/hour) Mono-relay ($9) Bi-relay ($12)

Management estimates that the company will incur $1,000,000 in manufacturing overhead costs during the current year and 40,000 units of the bi-relay will be produced and sold.

REQUIRED:

1.) Compute the predetermined manufacturing overhead rate assuming that the company continues to apply manufacturing overhead cost on the basis of direct labor hours. Using this rate and other data from the problem, determine the unit product cost of each product.

Reference no: EM13597440

Questions Cloud

Hanson co had 200000 shares of common stock 20000 shares of : hanson co. had 200000 shares of common stock 20000 shares of convertible preferred stock and 1000000 of 10 convertible

Record depreciation for two months on the equipment and : record depreciation for two months on the equipment and office furniture by nicole in the following transaction. there

There have been some discussions about the possibility of : there have been some discussions about the possibility of irs applying only a flat tax rate in the future to every

Dec 1 the van loan payment is due on the first of each : dec. 1 the van loan payment is due on the first of each month therefore at dec. 31 one month of interest has accrued

For many years zapro compnay manufacturing a single product : for many years zapro compnay manufacturing a single product called a mono-relay. then three years ago the company

Dec6 delivered the 144 cases of dog food to carls pet store : record them to the corresponded journals and ledgers. 1. sales journal 2. cash receipts journal 3. prchase hournal 4.

You received a memo asking you to compute productivity : you received a memo asking you to compute productivity based on a total daily output of 400 units with labor of 350

Dawes advertising companys trial balance at december 31 : dawes advertising companys trial balance at december 31 shows advertising supplies 8800 and advertising supplies

Collected advanced payments for customers of 5000 during : collected advanced payments for customers of 5000 during the month of may for future legal services. these advance

User Account

All Pages