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...

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