1) Alpha Electric Motors manufactures a single model of all purpose electric motor. Frank Flores, the production manager, has just completed reviewing product costdata for the last year in preparation for the upcoming budget session with top management. Under normal conditions, the company produces 100,000 motors per year andthat is considered 100% capacity. Flores is contemplating a look at product costs over a range of potential capacity levels to determine realistic costs per unit for the year.He has arrived at the following budget information:Raw Material Costs per unit$15Purchased Components per unit23Labor Cost per unit (by grade):Grade 1Grade 29Grade 312Variable Factory Overhead16Total Fixed Factory Overhead$300,000Required: a) Prepare budgets for the Total Costs at 70% & 85%b) From the total budgeted production costs in (a) above, calculate: 1. variable cost per unit, 2. fixed cost per unit, and 3. total unit cost for the four (2) capacity.

Fixed cost is the cost which does not change with the production capacity, while variable cost is…

1) Alpha Electric Motors manufactures a single model of all purpose electric motor. Frank Flores, the production manager, has just completer data for the last year in preparation for the upcoming budget session with top management. Under normal conditions, the company produces 1 that is considered 100% capacity. Flores is contemplating a look at product costs over a range of potential capacity levels to determine realistic He has arrived at the following budget information: Raw Material Costs per unit $15 Purchased Components per unit 23 Labor Cost per unit (by grade): Grade 1 6 Grade 2 9 Grade 3 12 Variable Factory Overhead 16 Total Fixed Factory Overhead $300,000 Required: a) Prepare budgets for the Total Costs at 70% & 85%

1) Alpha Electric Motors manufactures a single model of all purpose electric motor. Frank Flores, the production manager, has just completer data for the last year in preparation for the upcoming budget session with top management. Under normal conditions, the company produces 1 that is considered 100% capacity. Flores is contemplating a look at product costs over a range of potential capacity levels to determine realistic He has arrived at the following budget information: Raw Material Costs per unit $15 Purchased Components per unit 23 Labor Cost per unit (by grade): Grade 1 6 Grade 2 9 Grade 3 12 Variable Factory Overhead 16 Total Fixed Factory Overhead $300,000 Required: a) Prepare budgets for the Total Costs at 70% & 85%

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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