Part (10 points) The Sompter Meter Company has improved its production planning
ID: 2248999 • Letter: P
Question
Part (10 points) The Sompter Meter Company has improved its production planning schedule and would like to go this over with you from a financial standpoint. The four products are made and their costs are shown below: Minimum Demand Maximum Demand Raw Material Cost Price Product (Units per (Units per Month) ($/Unit) (S/Unit) Month) Product A Product B Product Product D $1.20 $2.50 $3.50 4.50 $8.00 $12.00 $25.00 $30.00 500 250 50 30 800 400 100 50 The time taken to make each product is also shown below: Time Taken for Assembly Product A Product B Product C Product D 3 mins/unit 6 mins/unit 15 mins/unit 18 mins/unit Monthly Overhead costs as well as the number of workers in the facility and their hourly pay rates are given in the following table below: Overhead Costs (Monthly) 5,000.00 Number of Workers Hourly Pay rate $12.00 The production plan calls for product A -700, B-350, C-80 and D-42 to be made. Calculate the following using the traditional method of accounting A. B. C. D. How long does it take for each product to be made based on the production plan? Raw Material Cost per product? Labor Costs of Plan per product? Allocated overhead costs per product? (Please use the fractional labor hours here to determine this) Total cost per product? E.Explanation / Answer
A.)To make product A-700 it takes 2100 minutes.
To make product B-350 it takes-2100 minutes.
To make product C-80 it takes-1200 minutes.
To make product D- It takes-756 minutes.
B.) PRODUCT A(700)=$840
PRODUCT B(350)=$875
PRODUCT C(80)=$280
PRODUCT D(42)=$189
C)LABOUR COSTS:-
PRODUCT A(700)=$420
PRODUCT B(350)=$420
PRODUCT C(80)=$1.67
PRODUCT D(42)=$5.25
D.)ALLOCATED OVERHEAD COST PER PRODUCT:-
PRODUCT A(700)=$243.056
PRODUCT B(350)=$243.056
PRODUCT C(80)=$138.89
PRODUCT D(42)=$7.12