A cement company produces preformed concrete blocks that requires three (3) hours of machine time. Machine hours are a scarce resource as a result of the productive capacity of the machines The company has 70 machines. Each machine works 7 hours per day. The factory operates five (5) days per week and 50 weeks annually. The company sells each unit of this product for $360 and the product uses direct material costing $60 per unit. The total factory operating cost includes direct labour and production overheads. The average direct labour hour rate is $25 per hour. The company has 95 employees during the period who actually worked 8 hours per day. Overheads are absorbed using direct labour hours. The budgeted overheads for the period are $3,500,000. While the budgeted direct labour hours were 100,000 hours. Required: (a) Calculate the return per factory hour. (b) Calculate the cost per factory hour. (c) Calculate the TPAR.

A cement company produces preformed concrete blocks that requires three (3) hours of machine time. Machine hours are a scarce resource as a result of the productive capacity of the machines The company has 70 machines. Each machine works 7 hours per day. The factory operates five (5) days per week and 50 weeks annually. The company sells each unit of this product for $360 and the product uses direct material costing $60 per unit. The total factory operating cost includes direct labour and production overheads. The average direct labour hour rate is $25 per hour. The company has 95 employees during the period who actually worked 8 hours per day. Overheads are absorbed using direct labour hours. The budgeted overheads for the period are $3,500,000. While the budgeted direct labour hours were 100,000 hours. Required: (a) Calculate the return per factory hour. (b) Calculate the cost per factory hour. (c) Calculate the TPAR.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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