Solution-What is the product per unit variable

What is the product per unit variable manufacturing cost

Reference no: EM132825146

Question - The chief statistician of Lemy Company has developed the following cost formula:

Y = P150,000 + 3L + 5M

Where: Y = total monthly manufacturing overhead cost

L = labor hours

M = machine hours

The measure of goodness of fit is good and no evidence of multicollinearity exists. The company will use 15,000 labor hours and 4,000 machine hours next month.

REQUIRED -

1. Determine the total manufacturing overhead costs that Aloha should incur next month.

2. Aloha makes a product that has P12.00 in materials costs. It requires two hours of labor time and 30 minutes of machine time. Laborers earn P15 per hour. What is the product's per unit variable manufacturing cost?

3. Suppose that Aloha could reduce the labor time for the product described in requirement 2 by 30 minutes, to 1.50 hours. Machine time will remain the same. By how much would the per unit variable manufacturing cost fall?

Reference no: EM132825146

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What is the product per unit variable manufacturing cost

Reference no: EM132825146

Reference no: EM132825146

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