The following particulars are extracted from the records of a company. Particulars Product A Product B Sale price per unit |Consumption of material Material cost OMR 100 OMR 240 4 kg 6 kg OMR20 OMR 30 Direct labour cost 30 20 Direct expenses 10 12 Machine hours used 4 Fixed overheads per unit Variable overheads per unit OMR 10 OMR 20 30 40 Direct labour per hour is OMR 10. Comment on the profitability of each product [both use same raw material] when, I] total sales potential in units is limited II] total sales potential in value is limited III] raw material is in short supply IV} production capacity [in terms of machine hours] is limited. Assuming raw material as the key factor, availability of which is 20,000 kg and maximum sales potential of each product being 7000 units, find out the product mix which will yield maximum profits.

The following particulars are extracted from the records of a company. Particulars Product A Product B Sale price per unit |Consumption of material Material cost OMR 100 OMR 240 4 kg 6 kg OMR20 OMR 30 Direct labour cost 30 20 Direct expenses 10 12 Machine hours used 4 Fixed overheads per unit Variable overheads per unit OMR 10 OMR 20 30 40 Direct labour per hour is OMR 10. Comment on the profitability of each product [both use same raw material] when, I] total sales potential in units is limited II] total sales potential in value is limited III] raw material is in short supply IV} production capacity [in terms of machine hours] is limited. Assuming raw material as the key factor, availability of which is 20,000 kg and maximum sales potential of each product being 7000 units, find out the product mix which will yield maximum profits.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 11E: Ripley, Inc., costs products using a normal costing system. The following data are available for...

See similar textbooks

Similar questions

A company has the following information relating to its production costs: Compute the actual and applied overhead using the companys predetermined overhead rate of $23.92 per machine hour. Was the overhead over applied or under applied, and by how much?
Ripley, Inc., costs products using a normal costing system. The following data are available for last year: Overhead is applied on the basis of direct labor hours. Required: 1. What was the predetermined overhead rate? 2. What was the applied overhead for last year? 3. Was overhead over- or underapplied, and by how much? 4. What was the total cost per unit produced (carry your answer to four significant digits)?
Find: 1. Total Manufacturing Cost during the current year2. Cost of goods Manufactured during the current year 3. Over or Under applied Overhead
The following particulars are extracted from the records of a company. Particulars Product A Product B Sale price per unit OMR 100 OMR 240 Consumption of material 4 kg 6 kg Material cost OMR20 OMR 30 Direct labour cost 30 20 Direct expenses 10 12 Machine hours used 6 4 Fixed overheads per unit OMR 10 OMR 20 Variable overheads per unit 30 40 Direct labour per hour is OMR 10. Comment on the profitability of eachproduct [both use same raw material] when, I] total sales potential in unitsis limited II] total sales potential in value is limited III] raw material is in short supply IV} production capacity [in terms of machine hours] is limited.Assuming rawmaterial asthe key factor, availability of which is 20,000 kg andmaximumsales potential of each product being 7000 units, find out the product mix which will yield maximum profits.
The following data relates to the operations of company A; direct material cost per unit- ghc5, direct labour cost/unit- ghc20 @ ghc2/hour, indirect production expense is made up of- depreciation- 50000, indirect material- ghc30000, and indirect labour- ghc20000. The company plans to produce 5000units and absorb overhead based on direct labour hours. What is the cost per unit? A. Ghc45 B. Ghc40 C. Ghc35 D. Ghc30 Reset Selection
services XYZ industries applies overhead based on direct labor cost. The following information was available for the last year: Actual manufacturing overhead OMR50,000; Underapplied manufacturing overhead OMR10,400; Actual Prime cost OMR52,000; Actual Direct material cost OMR19,000; Estimated direct labor cost OMR41,000 overhead for the year? What was the estimated man turi Select one: O a. OMR49,200 O b.OMR39,600 O c. None of the answers given O d. OMR46,800 e OMRS1,600 ge Next page
The T-account showing the manufacturing overhead activity for Kenneth Corp. for 2018 is as follows: Manufacturing Overhead 210,000 196,000 Read the requirements. Requirement 1. What is the actual manufacturing overhead? Actual manufacturing overhead: S Requirement 2. What is the allocated manufacturing overhead? Allocated manufacturing overhead: S Requirement 3. Is manufacturing overhead underallocated or overallocated? By how much? Manufacturing overhead is by $
Total Labour Cost is 315000 OMR. Total labour Fixed cost is 50000 OMR. Calculate Total labour Variable cost Select one: a. 105000 OMR O b. 265000 OMR O c. 50000 OMR O d. 165000 OMR
For each of the following independent cases (A through E), compute the missing values in the table: Total Manufacturing Cost Case AB с COE D Prime Cost 6,890 11,650 Conversion Cost 11,620 7,960 20,620 Direct Materials $ 2,110 $ 2,290 1,410 3,310 Direct Manufacturing Labor Overhead 1,160 $ 3,210 1,970 3,620 7,020 3,040 9,370 5,990
Total Labour Cost is 315000 OMR. Total labour Fixed cost is 115000 OMR. Calculate Total labour Variable cost a. 105000 OMR b. 165000 OMR c. 50000 OMR d. 200000 OMR
The following information was gathered for the Greensprings Corporation for the most recent year. Manufacturing overhead is allocated using machine hours, Actual machine hours Allocated manufacturing overhead. Estimated manufacturing overhead costs Actual manufacturing overhead costs By how much is manufacturing overhead over or underallocated? A. $82,000 overallocated B. $82,000 underallocated OC. $8,000 underallocated OD. $8,000 overallocated 139,000 $1,130,000 $1,056,000 $1,138,000
For each of the following independent cases (A through E), compute the missing values in the table: Case A BCDE Prime Cost 6,840 11,610 Conversion Cost 11,570 7,930 20,560 Direct Materials $ 2,140 $ 2,300 1,440 3,500 Direct Labor Manufacturing Overhead 1,010 S 3.120 1,910 3,560 7,030 3,050 Total Manufacturing Cost 9,370 5,900