Daisy Drink Company has the following budget at 500,000 cases of cola: Direct materials $180,000 Direct labor 160,000 Variable factory overhead 150,000 Fixed factory overhead 130,000 $620,000 (1) Compute the cost per case of cola at 500,000 cases. (2) Develop the budget for 550,000 cases. (3) Compute the cost per case at 550,000 dozen.
Daisy Drink Company has the following budget at 500,000 cases of cola: Direct materials $180,000 Direct labor 160,000 Variable factory overhead 150,000 Fixed factory overhead 130,000 $620,000 (1) Compute the cost per case of cola at 500,000 cases. (2) Develop the budget for 550,000 cases. (3) Compute the cost per case at 550,000 dozen.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Daisy Drink Company has the following budget at 500,000 cases of cola:
|
Direct materials |
$180,000 |
|
Direct labor |
160,000 |
|
Variable factory |
150,000 |
|
Fixed factory overhead |
130,000 |
|
|
$620,000 |
(1) Compute the cost per case of cola at 500,000 cases.
(2) Develop the budget for 550,000 cases.
(3) Compute the cost per case at 550,000 dozen.
(4) Explain why the difference in the cost per dozen occurs at the different levels of volume.
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