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PRODUCTION COST ANALYSIS

PRODUCTION COST ANALYSIS PROBLEM

PROBLEM 1 (5 PTS)

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ABC corporation found that its total indirect costs is $10 million per year.ABC employs 100 direct labor who work 40 hours per week over a 50 working weeks per year. What is the overhead burden for this company ? If it takes $10. Of materials and 2 direct labor hour @$20./ lab-hr to make a product, then what is the total cost of making this product?

Overhead burden = (total indirect cost for one year)/ ( total labor hours in one year)=

Cost of a product = material cost /unit + direct labor cost/unit + Overhead cost/unit=

PROBLEM 2 (5PTS)

During the product development stage, a market survey indicated that the expected sales volume of product A will be 100,000 units per year at a price of $10. Per unit. The variable cost per unit will be $2. But the cost of product development will be $100,000. and the cost of sales advertisement (promotion) is expected to be $100,000. Then,

What is the break-even sales volume of the product A for the company?

BEP= (total fixed cost)/(price/unit)-(variable cost/unit) =

Will the company make any profit from selling 100,000 units of product A? If so , how much?

Profit = Revenue Af?cAc‚¬" total cost =

 

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PRODUCTION COST ANALYSIS was first posted on June 28, 2020 at 3:47 pm.
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