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ACCT 556 Week 1 Homework Problems
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ACCT 556 Week 1 Homework
The new president of the Wernecke Company was stumped. Why had
profits gone down? He had directed the sales department to push the
product with the highest contribution margin, and the sales department
had come through with flying colors. The percent of flams sold had
increased from 25% of units sold to 37.5% of units sold. So what
happened?
Required:
1.
Calculate the Wernecke Company’s estimated direct labor hours
to produce flims and flams.
2.
Calculate the predetermined variable overhead rate that will be
used in the coming year using a traditional costing system based upon
direct labor hours.
3.
Using a traditional costing system based upon direct labor hours,
compute the unit product costs for flims and flams as well as
contribution margin per unit.