logo

Current system Manufacturing overhead and costing

6 Pages832 Words327 Views
   

Skyline University College

   

Added on  2020-04-21

About This Document

Required considerations for sales mix strategy 4 Reference 5 Current system Estimated manufacturing cost per unit for deluxe entry door is = ($ 180 + $ 80) = $ 260 Estimated manufacturing cost per unit for standard entry door is = ($ 130 + $ 120) = $ 250 Estimated profit per unit for deluxe entry door is ($ 650 - $ 260) = $ 390 Estimated profit per unit for standard entry door is ($ 475 - $ 250) = $ 225 Explanation for manufacturing overhead Currently, the support manufacturing costs

Current system Manufacturing overhead and costing

   

Skyline University College

   Added on 2020-04-21

ShareRelated Documents
Running head: MANAGERIAL ACCOUNTINGManagerial accountingName of the studentName of the universityAuthor note
Current system Manufacturing overhead and costing_1
1MANAGERIAL ACCOUNTING Table of Contentsa.Current system....................................................................................................................2b.Explanation for manufacturing overhead...........................................................................2c.Machine related cost...........................................................................................................2d.Usage of activity based costing data...................................................................................2e.Profitability of deluxe door.................................................................................................3f.Required considerations for sales mix strategy..................................................................4Reference....................................................................................................................................5
Current system Manufacturing overhead and costing_2
2MANAGERIAL ACCOUNTING a.Current system1.Estimated manufacturing cost per unit for deluxe entry door is = ($ 180 + $ 80) = $260 Estimated manufacturing cost per unit for standard entry door is = ($ 130 + $ 120) =$ 2502.Estimated profit per unit for deluxe entry door is ($ 650 - $ 260) = $ 390Estimated profit per unit for standard entry door is ($ 475 - $ 250) = $ 225b.Explanation for manufacturing overheadCurrently, the support manufacturing costs are allocated on the basis of direct labourlabours. As the deluxe doors manufactured by using the systems of new robotics, it seemsthat less amount of direct labour is required for manufacturing each unit of the deluxe entrydoor (Edmonds et al., 2016).c.Machine related costThe machine related costs are high probably due to the the results for purchasing newrobotics equipments for the purpose of deluxe products. Though the total machine hours foreach of the product is same, the each deluxe product uses (300,000 mh / 50,000 units) = 6machine hours. On the other hand, each standard products use (300,000 mh / 400,000 units) =0.75 machine hours. By analysing the machine hours for each unit instead of total machinehours, the explanation can be clearer (Marshall, 2016).d.Usage of activity based costing data1.Computation of cost driver rate
Current system Manufacturing overhead and costing_3

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
Finance Accounting System PDF
|9
|1040
|334