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MBA560 Financial and Managerial Accounting Module 6 Test (2 Problems)

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Question;Saint Leo University (Graduate;Business Studies);MBA560 Financial and Managerial;Accounting;Module 6 Test;Problem 1.;The following information is for a product manufactured and sold by;Rivera Corporation;Sales price per unit 30;Variable cost per unit 20;Total fixed costs;200,000;Last year, Rivera earned a profit of $60,000;Required;1) How many units did Rivera sell last year?;2) Rivera's managers are considering decreasing the sales price to $28;in an effort to increase market share. Also, the company wants a profit of;$80,000. How many units would it have to sell at the lower selling price to;achieve this target?;Problem 2.;The management accountant at Melrose, Inc. provided the following;estimated costs for producing 5,000 units of a specialty product manufactured;by the firm;Direct Materials;10,000;Direct Labor (1 hour per unit);50,000;Unit level support costs;10,000;Batch level support costs;5,000;Product level support costs;3,000;Facility level support costs;7,000;The company believes that direct labor hours are the most appropriate;cost driver for assigning overhead costs to its product.;Required;1) Compute the predetermined overhead rate for this company.;2) Compute the specialty product's total estimated cost per unit.;3) Why do firms assign overhead costs using a predetermined overhead;rate instead of assigning actual costs?

 

Paper#37683 | Written in 18-Jul-2015

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