please make it simple and easy way 7- 18Test Bank for Managerial Accounting, Sixth EditionOrtiz Co. produces 5,000 units of part A12E. The following costs were incurred for thatlevel of production:Direct materialsDirect labor79.$ 55,000160,000Variable overheadFixed overhead75,000175,000If Ortiz buys the part from an outside supplier, $40,000 of the fixed overhead is avoidable.What is the relevant cost per unit of part A12E?a. $58b. $85C. $93d. $66

Correct Answer:- Relevant cost per unit is B :- 85

Answered: elevant cost per unit of part A1

Business

Accounting

elevant cost per unit of part A1

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter4: Job Order Costing

Section: Chapter Questions

Problem 2PB: Rulers Company is a neon sign company that estimated overhead will be $60,000, consisting of 1,500...

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The following is the standard cost card for X Company's only product:Direct materials, 4 metres at $4.00Direct labour, 5 hours at $10.00Variable overhead. 1.5 hours at $3.00Fixed overhead, 1.5 hours at $7.00Standard cost per unit $16.00 $15.00 $4.50 $10.50 $46.00 The company manufactured and sold 18,000 units of product during the year. A total of 70,200 metres of material was purchased during the year at cost of $4.20 per metre. All of this material was used to manufacture the 18,000 units. The company records showed no beginning or ending inventories for the year. The company worked 29,250 direct labour hours during the year at a cost of $9.75 per hour. Overhead cost is applied to products on the basis of direct labour hours. The denominator activity level (direct labour hours) was 22,500 hours. Budgeted fixed overhead costs as shown on the flexible budget were $157,500, while actual fixed overhead costs were $156,000. Actual variable overhead costs were $90,000 Required: Compute…
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The DAC-95559 company's total overhead cost at various levels of activity is presented below: Month March April May June Machine Hours 5,000 4,000 6,000 8,000 Total Overhead Cost $ 41,250 $ 33,000 $ 49,500 $ 59,000 Assume that the overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 4,000 machine-hour level of activity is as follows: Utilities (considered variable) $12,000 Supervisory salaries (considered fixed) $4,000 $17,000 $33,000 Maintenance (considered mixed) Total overhead cost Suppose the company uses the high-low method to estimate a cost formula for mixed costs. What is the total maintenance cost the company expects to incur at an activity level of 6,800 machine hours? $26,800 $27,100 $26,500 $27,500
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