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dearash1730
01.04.2021 •
Business
g Foxx Company incurs $330000 overhead costs each year in its three main departments, setup ($15000), machining ($225000), and packing ($90000). The setup department performs 40 setups per year, the machining department works 5000 hours per year, and the packing department packs 500 orders per year. Information about Foxx’s two products is as follows: Product A1 Product B1 Number of setups 20 20 Machining hours 1000 4000 Orders packed 150 350 Number of products manufactured 600 400 Using ABC, how much overhead is assigned to Product A1 each year? $250500 $165000 $79500 $66000
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Ответ:
Total allocated costs= $79,500
Explanation:
First, we need to calculate the allocation rates:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
setup= 15,000/40= $375 per setup
machining= 225,000/5,000= $45 per hour
packing= 90,000/500= $180 per order
Now, we can allocate costs to Product A1:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
setup=375*20= 7,500
machining= 45*1,000= 45,000
packing= 180*150= 27,000
Total allocated costs= $79,500
Ответ:
should stay in business for a while longer until its fixed costs expire.
Explanation:
price exceeds the average variable cost, the firm should continue to operate in the short run
If price is less than the average total cost in the long run, the firm should exit in the long run