Answered: ElectroCore manufactures circuit…

Essentials of Business Analytics (MindTap Course List)

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter12: Integer Linear Optimization_models

Section: Chapter Questions

Problem 4P: Hawkins Manufacturing Company produces connecting rods for 4- and 6-cylindcr automobile engines...

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ElectroCore manufactures circuit modules for solar power inverters. Each module has a standard cost of $72. Standards require three modules per inverter. In August, the company purchased 150modules for $10,650. The company used 132 modules in the production of 40 inverters, with six modules damaged during assembly. The standard quantity of labor is 18 hours per inverter, with a standard wage rate of $23.50. In August, the company incurred 760 labor hours at a cost of $18,620. How much is the labor rate variance? Answer

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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