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MBA560 module 6 test




Question;Problem 1. The following information is for a product;manufactured and sold by Rivera Corporation;Sales price per unit, $30Variable cost per unit, $20Total fixed costs, $200,000Last year, Rivera earned a profit of;$60,000Required;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;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#41470 | Written in 18-Jul-2015

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