30. Richardson Motors uses ten units of Part Number T305 each month in the production of large diesel engines. The cost to manufacture one unit of T305 is presented below: Direct materials P2,000 Material Handling (20% of DM cost) 400 Direct labor 16,000 Manufacturing overhead (150% of DL) Total manufacturing cost 24.000 P 42,400 Material handling, which is not included in the manufacturing overhead, represents the direct reliable costs of the Receiving Department that are applied to direct materials and purchased components on the basis of their cost. Richardson's reliable vendors, has offered to supply T305 at a unit price of P30,000. Assume Richardson Motors is able to rent all idle capacity for P50,000 per month. If Richardson decides to purchase the ten units from Simpson Castings, Richardson's monthly cost for T305 would increase (decrease) by (put (-) if negative; no decimal)
30. Richardson Motors uses ten units of Part Number T305 each month in the production of large diesel engines. The cost to manufacture one unit of T305 is presented below: Direct materials P2,000 Material Handling (20% of DM cost) 400 Direct labor 16,000 Manufacturing overhead (150% of DL) Total manufacturing cost 24.000 P 42,400 Material handling, which is not included in the manufacturing overhead, represents the direct reliable costs of the Receiving Department that are applied to direct materials and purchased components on the basis of their cost. Richardson's reliable vendors, has offered to supply T305 at a unit price of P30,000. Assume Richardson Motors is able to rent all idle capacity for P50,000 per month. If Richardson decides to purchase the ten units from Simpson Castings, Richardson's monthly cost for T305 would increase (decrease) by (put (-) if negative; no decimal)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:30. Richardson Motors uses ten units of Part Number T305 each
month in the production of large diesel engines. The cost to
manufacture one unit of T305 is presented below:
Direct materials
P2,000
Material Handling (20% of DM cost)
400
Direct labor
16,000
Manufacturing overhead (150% of DL)
Total manufacturing cost
24,000
P 42,400
Material handling, which is not included in the manufacturing
overhead, represents the direct reliable costs of the Receiving
Department that are applied to direct materials and purchased
components on the basis of their cost. Richardson's reliable
vendors, has offered to supply T305 at a unit price of P30,000.
Assume Richardson Motors is able to rent all idle capacity for
P50,000 per month. If Richardson decides to purchase the ten
units from Simpson Castings, Richardson's monthly cost for T305
would increase (decrease) by (put (-) if negative; no decimal)
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