CHAPTER ESTIMATING ENGINEERING COSTS AND BENEFITS Tech Engineering in TN is maki
ID: 1132422 • Letter: C
Question
CHAPTER ESTIMATING ENGINEERING COSTS AND BENEFITS Tech Engineering in TN is making a product for the overseas market The following cost data for the product has been compiled Cost $167 $25/unit 2 hrs at $20 per hour 1,400,000 Selling price s and parchased parts Direct Labor Fived Cost Problem 2-1 Ifthe overhead expenses are charged at 80 % of labor cost, determine the mult ctrng co t per A. $72 B. 597 C.S65 D. None of these Problem 2-2 The breakeven volume for this prodact is A, 14,433 B. 8,383 C. 20,000 D. None of these Preblem 2-3 What is the profit per unit if 30,000 units are sold? A. $23.33 B. $20.81 C.$24.35 D. Nonc of thosc Problem 2-4 To reduce the breakeven volume to 15,000 units, what should be the selling price? A. $210.33 B. $190.33 C.S241.3 D. None of theseExplanation / Answer
Data of the problem Items Cost Selling Price $167 Materials and purchased Parts $25 /unit Direct labour 2hrs at $20 per hour Fixed cost $1,400,000 Problem 2.1 if the overhead expenses are charged at at 80% of labour cost, determine the manufacturing cost per unit Particulars amount Materials and purchased Parts 25 Labour cost (2 x 20) 40 Overhead cost = 80% of labour cost 32 manufacturing cost per unit 97 Correct Answer Option B 2.2 the breakeven volume for this product is Total fixed cost 1400000 variable cost per unit 97 selling price 167 Contribution per unit = (Selling price - variable cost per unit) 70 breakeven volume = Total fixed cost / Contribution per unit 20000 Correct Answer Option C 2.3 what is the profit per unit if 30,000 units are sold Total revenue at 30,000 unit = Selling price x 30,000 5010000 Total variable cost = AVC x 30000 2910000 total fixed cost 1400000 total cost = TFC + TVC 4310000 profit = Total revenue - total cost 700000 profit per unit = total profit / units 23.33333 Correct Answer Option A 2.4 to produce the berakeven volume to 15,000 units, what should be the selling price berakeven volume is 15000 variable cost per unit 97 Total fixed cost 1400000 break even ouptput = TFC / (selling price - variable cost per unit) Price = (TFC + AVC x Q) /Q 190.3333 Correct Answer Option B