Company is capable of turning out fifteen completed units every 30 seconds. The plant normally operates five days a week on a two eight-hours shift. Each year, the factory is closed 12 working days for holidays. Machinery is idle 750 hours for cleaning, oiling and maintenance. Normal sales averages 110,000 units a year over five-year period. The expected sales volume for the year is 112,500 units. The fixed cost of operating the plant amounted to 385,000 per year. 1. compute the idle capacity cost under normal capacity if the plant operated at 3,400 hrs 2. Compute the fixed unit costs under practical capacity
Company is capable of turning out fifteen completed units every 30 seconds. The plant normally operates five days a week on a two eight-hours shift. Each year, the factory is closed 12 working days for holidays. Machinery is idle 750 hours for cleaning, oiling and maintenance. Normal sales averages 110,000 units a year over five-year period. The expected sales volume for the year is 112,500 units. The fixed cost of operating the plant amounted to 385,000 per year. 1. compute the idle capacity cost under normal capacity if the plant operated at 3,400 hrs 2. Compute the fixed unit costs under practical capacity
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter17: Activity Resource Usage Model And Tactical Decision Making
Section: Chapter Questions
Problem 6E: Elliott, Inc., has four salaried clerks to process purchase orders. Each clerk is paid a salary of...
Related questions
Question
Company is capable of turning out fifteen completed units every 30 seconds. The plant normally operates five days a week on a two eight-hours shift. Each year, the factory is closed 12 working days for holidays. Machinery is idle 750 hours for cleaning, oiling and maintenance. Normal sales averages 110,000 units a year over five-year period. The expected sales volume for the year is 112,500 units. The fixed cost of operating the plant amounted to 385,000 per year.
1. compute the idle capacity cost under normal capacity if the plant operated at 3,400 hrs
2. Compute the fixed unit costs under practical capacity
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning