Ignore any calculations from prior questions. Information pertaining to Radakovich Corporation's estimated manufacturing overhead for 2022 is given below. Radakovich uses an activity-based costing (ABC) system to assign manufacturing overhead to products. Among its products is G12B, that the company only manufactures for special orders. BobCo Inc. has requested a bid on 1,000 units of G12B. Radakovich's production managers estimate the order to require 10,000 parts and 600 inspection-hours. This product's direct materials are estimated to cost $40.00 per unit and direct labor is estimated at $60.00 per unit.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Ignore any calculations from prior questions. Information pertaining to
Radakovich Corporation's estimated manufacturing overhead for 2022 is given
below. Radakovich uses an activity-based costing (ABC) system to assign
manufacturing overhead to products. Among its products is G12B, that the company
only manufactures for special orders. BobCo Inc. has requested a bid on 1,000
units of G12B. Radakovich's production managers estimate the order to require
10,000 parts and 600 inspection-hours. This product's direct materials are
estimated to cost $40.00 per unit and direct labor is estimated at $60.00 per
unit.
Activity
Activity Rate
Cost Driver
Assembly
$25.00
number of machine hours
Material Handling
$1.00
number of parts
Inspection
$50.00
number of inspection-hours
Activity Rates are quoted per unit of cost driver activity.
Radakovich also estimates that marketing and administrative costs on the
Bobco order will equal $25.00 per unit. However, there is considerable
uncertainty about the number of machine hours that will be used since a change
in the quality of materials available could effect machine time. If the bid
price is $175 per unit, what is the number of machine hours that (for all units
in total) that would result in the special order just breaking even? (Round to
the nearest whole unit.)
Transcribed Image Text:Ignore any calculations from prior questions. Information pertaining to Radakovich Corporation's estimated manufacturing overhead for 2022 is given below. Radakovich uses an activity-based costing (ABC) system to assign manufacturing overhead to products. Among its products is G12B, that the company only manufactures for special orders. BobCo Inc. has requested a bid on 1,000 units of G12B. Radakovich's production managers estimate the order to require 10,000 parts and 600 inspection-hours. This product's direct materials are estimated to cost $40.00 per unit and direct labor is estimated at $60.00 per unit. Activity Activity Rate Cost Driver Assembly $25.00 number of machine hours Material Handling $1.00 number of parts Inspection $50.00 number of inspection-hours Activity Rates are quoted per unit of cost driver activity. Radakovich also estimates that marketing and administrative costs on the Bobco order will equal $25.00 per unit. However, there is considerable uncertainty about the number of machine hours that will be used since a change in the quality of materials available could effect machine time. If the bid price is $175 per unit, what is the number of machine hours that (for all units in total) that would result in the special order just breaking even? (Round to the nearest whole unit.)
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