ACCT 434 Dreams Come True /uophelp.com ACCT 434 Dreams Come True /uophelp.com | Page 31

There were 30,000 units of finished goods in inventory at the beginning of June . Plans are to have an inventory of finished products that equal 20 % of the unit sales for the next month . Five pounds of materials are required for each unit produced . Each pound of material costs $ 8 . Inventory levels for materials are equal to 30 % of the needs for the next month . Materials inventory on June 1 was 15,000 pounds . Prepare production budgets in units for July , August , and September . Question 3 . Question : ( TCO 3 ) As part of his job as cost analyst , Max Thompson collected the following information concerning the operations of the Machining Department : Observation Machine-hours Total Operating Costs January 4,000 $ 45,000 February 4,600 49,500 March 3,800 45,750 April 4,400 48,000 May 4,500 49,800 Use the high-low method to determine the estimating cost function with machine-hours as the cost driver . Question 4 . Question : ( TCO 5 ) Lewis Auto Company manufactures a part for use in its production of automobiles . When 10,000 items are produced , the costs per unit are : Direct materials $ 12 Direct manufacturing labor 60 Variable manufacturing overhead 24 Fixed manufacturing overhead 32 Total $ 128 Monty Company has offered to sell Lewis Auto Company 10,000 units of the part for $ 120 per unit . The plant facilities could be used to manufacture another part at a savings of $ 180,000 if Lewis Auto accepts the supplier ' s offer . In addition , $ 20 per unit of fixed manufacturing overhead on the original part would be eliminated . A . What is the relevant per unit cost for the original part ? B . Which alternative is best for Lewis Auto Company ? By how much ? ========================================= ACCT 434 Week 1 Quiz ( New )