Comfy Limited manufactures glass ornaments and housewares. The business makes use of unskilled labour and provides training to do hand crafting of the goods. In January, they decided to add a fruit bowl to the range. It took 45.60 hours to complete the first two fruit bowls. It was found that labour hours reduced as cumulative output increased, and it is expected that this trend will continue until 64 fruit bowls have been manufactured. The total number of hours to complete the next two fruit bowls was 41.04 hours. The labour and material costs to manufacture the first four fruit bowls, which have already been sold, were as follows: Direct materials: Direct labour: Additional information: . Ⓡ . Required: a) b) R1 360 R1 420 A gift shop owner saw these fruit bowls and has asked for a quotation for 12 to add to its range of products. Since the first four fruit bowls were manufactured, the price of material increased by 8%, and the cost of labour by 15%. Comfy Limited paid the designer of the fruit bowl R1 600. They have committed to producing and selling only 64 of these fruit bowls which will be complete within the next few months. Sundry materials amount to R1.50 per fruit bowl. Other variable manufacturing overheads are allocated at R1.00 per direct labour hour. Monthly fixed costs of the business amount to R15 200, of which 10% applies to the above order. Calculate the learning curve Calculate the quotation price for the 12 fruit bowls if the business requires a profit margin of 25% on quotation price. Note: round off ALL calculations to the nearest two decimal places. c) Calculate the total time required to manufacture units 17 to 32 Note: Round off all calculations to two decimal places.
Comfy Limited manufactures glass ornaments and housewares. The business makes use of unskilled labour and provides training to do hand crafting of the goods. In January, they decided to add a fruit bowl to the range. It took 45.60 hours to complete the first two fruit bowls. It was found that labour hours reduced as cumulative output increased, and it is expected that this trend will continue until 64 fruit bowls have been manufactured. The total number of hours to complete the next two fruit bowls was 41.04 hours. The labour and material costs to manufacture the first four fruit bowls, which have already been sold, were as follows: Direct materials: Direct labour: Additional information: . Ⓡ . Required: a) b) R1 360 R1 420 A gift shop owner saw these fruit bowls and has asked for a quotation for 12 to add to its range of products. Since the first four fruit bowls were manufactured, the price of material increased by 8%, and the cost of labour by 15%. Comfy Limited paid the designer of the fruit bowl R1 600. They have committed to producing and selling only 64 of these fruit bowls which will be complete within the next few months. Sundry materials amount to R1.50 per fruit bowl. Other variable manufacturing overheads are allocated at R1.00 per direct labour hour. Monthly fixed costs of the business amount to R15 200, of which 10% applies to the above order. Calculate the learning curve Calculate the quotation price for the 12 fruit bowls if the business requires a profit margin of 25% on quotation price. Note: round off ALL calculations to the nearest two decimal places. c) Calculate the total time required to manufacture units 17 to 32 Note: Round off all calculations to two decimal places.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
9
Transcribed Image Text:Comfy Limited manufactures glass ornaments and housewares. The business makes use of unskilled labour and provides
training to do hand crafting of the goods. In January, they decided to add a fruit bowl to the range. It took 45.60 hours to
complete the first two fruit bowls. It was found that labour hours reduced as cumulative output increased, and it is expected that
this trend will continue until 64 fruit bowls have been manufactured. The total number of hours to complete the next two fruit
bowls was 41.04 hours. The labour and material costs to manufacture the first four fruit bowls, which have already been sold,
were as follows:
Direct materials:
Direct labour:
Additional information:
.
Ⓡ
●
Required:
a)
b)
R1 360
R1 420
A gift shop owner saw these fruit bowls and has asked for a quotation for 12 to add to its range of products.
Since the first four fruit bowls were manufactured, the price of material increased by 8%, and the cost of labour by
15%.
Comfy Limited paid the designer of the fruit bowl R1 600. They have committed to producing and selling only 64
of these fruit bowls which will be complete within the next few months.
Sundry materials amount to R1.50 per fruit bowl.
Other variable manufacturing overheads are allocated at R1.00 per direct labour hour.
Monthly fixed costs of the business amount to R15 200, of which 10% applies to the above order.
Calculate the learning curve
Calculate the quotation price for the 12 fruit bowls if the business requires a profit margin of 25% on quotation
price. Note: round off ALL calculations to the nearest two decimal places.
c) Calculate the total time required to manufacture units 17 to 32
Note: Round off all calculations to two decimal places.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 5 steps with 3 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education