Carr Company produced a pilot run of seventy units of a recently developed piston used in one of its products. Carr expected to produce and sell 1,950 units annually. The pilot run required an average of 0.55 direct labor hours per piston for 70 pistons. Carr experienced an seventy percent learning curve on the direct labor hours needed to produce new pistons. Past experience indicated that learning tends to cease by the time 1,120 pistons are produced. Carr's manufacturing costs for pistons are presented below. Direct labor Variable overhead Fixed overhead Materials $ 15.00 per direct labor hour 15.00 per direct labor hour 20.00 per direct labor hour 6.00 per unit Carr received a quote of $7 per unit from Truck Machine Company for the additional 1,880 needed pistons. Carr frequently subcontracts this type of work and has always been satisfied with the quality of the units produced by Truck. If the pistons are manufactured by Carr Company, the total direct labor hours for the first 1,120 pistons (including the pilot run) produced is calculated to be (round to two digits after the decimal point): Multiple Choice 159.73. 141.38. 134.80. 147.91 144.64.
Carr Company produced a pilot run of seventy units of a recently developed piston used in one of its products. Carr expected to produce and sell 1,950 units annually. The pilot run required an average of 0.55 direct labor hours per piston for 70 pistons. Carr experienced an seventy percent learning curve on the direct labor hours needed to produce new pistons. Past experience indicated that learning tends to cease by the time 1,120 pistons are produced. Carr's manufacturing costs for pistons are presented below. Direct labor Variable overhead Fixed overhead Materials $ 15.00 per direct labor hour 15.00 per direct labor hour 20.00 per direct labor hour 6.00 per unit Carr received a quote of $7 per unit from Truck Machine Company for the additional 1,880 needed pistons. Carr frequently subcontracts this type of work and has always been satisfied with the quality of the units produced by Truck. If the pistons are manufactured by Carr Company, the total direct labor hours for the first 1,120 pistons (including the pilot run) produced is calculated to be (round to two digits after the decimal point): Multiple Choice 159.73. 141.38. 134.80. 147.91 144.64.
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Carr Company produced a pilot run of seventy units of a recently developed piston used in one of its products. Carr expected to produce and sell 1,950 units annually. The pilot run required an average of 0.55 direct
labor hours per piston for 70 pistons. Carr experienced an seventy percent learning curve on the direct labor hours needed to produce new pistons. Past experience indicated that learning tends to cease by the time
1,120 pistons are produced.
Carr's manufacturing costs for pistons are presented below.
Direct labor
Variable overhead
Fixed overhead
Materials
$ 15.00 per direct labor hour
15.00 per direct labor hour
20.00 per direct labor hour
6.00 per unit
Carr received a quote of $7 per unit from Truck Machine Company for the additional 1,880 needed pistons. Carr frequently subcontracts this type of work and has always been satisfied with the quality of the units
produced by Truck.
If the pistons are manufactured by Carr Company, the total direct labor hours for the first 1,120 pistons (including the pilot run) produced is calculated to be (round to two digits after the decimal point):
Multiple Choice
159.73.
141.38.
134.80.
147.91
144.64.
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