Netherfield Ltd is considering a contract to produce a particular product. The product will require the use of eight hours skilled labour and four hours semi-skilled labour. The skilled employee is paid £16
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A: Given is: Standard time to complete the job = 13 hours Day rate = P90 per hour
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A:
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- Tamar Builders Ltd has been asked to build a conservatory for a customer. The conservatory will require 15 hours' supervision time by a foreman who is paid £10 per hour. The foreman has spare capacity during normal working hours but it is estimated that 10 hours of the supervision will have to be undertaken outside normal working hours and will be paid at £12 per hour, Semi-skilled workers will be required for the job for 150 hours in total. The current rate per hour is £7. The business has some spare capacity, at present, and so these workers have been undertaking jobs that are normally undertaken by unskilled workers. If the semi-skilled workers are required to build the conservatory, they will be taken off the unskilled jobs that will be done by unskilled workers who are normally paid £5 per hour. However, because the unskilled workers are already fully occupied, they will do the jobs outside normal working hours at an overtime rate of £6 per hour. What is the relevant cost of…A company is planning to bid for a one-month contract. It has sufficient spare labour and machine capacity to carry out the contract without affecting other activities. Costs associated with the contract would be as follows: Direct materials Direct labour Variable overheads Depreciation $ 12,440 18,300 6,020 2,000 In addition, it is estimated that a supervisor will need to spend 50% of their time on that contract. The supervisor is paid $3,500 a month. What is the relevant cost of the contract? O $18,460 O $14,190 O $12,440 O $20,210oncorde Ltd has been asked to quote a price for an order of 8 units of Product Delta. Making this product will require skilled labour, which is currently in hort supply and is paid £15 an hour. If the order is accepted, all necessary labour will have to be transferred from existing work. As a result, other orders will be lost. It is estimated that for each hour transferred to this contract £45 will be lost (calculated as lost sales revenue £75, less materials £15 and labour 15). The production manager believes that, owing to a learning process, the time taken to make each unit will reduce, from 20 hours to make the first one, by one hour a unit made. (That is 20 hours to make the first one, 19 hours to make the second, 18 hours to make the third one and so on.) What is the total relevant cost of skilled labour for the purposes of the order? The relevant cost for skilled labour will be will be £. ... Time Remaining: 00:43:50 Next
- Agean Consultancy Service has been asked to quote a price for a contract that will take two weeks to complete. Information relating to staffing for the contract is as follows: Grade Manager Senior Analyst Junior Analyst Hours Required 14 32 38 Base rate/hour £s 45 30 18 A shortage of managers means that the necessary staff to undertake the contract would have to be moved from other work that is currently yielding an excess of sales income over staff and other costs of £45 an hour. The total relevant cost is Senior analysts are currently being paid their normal salaries to undertake work suitable for junior analysts. If the relevant members of staff are moved to work on the contract, junior analysts will have to be employed for the period to replace them. The junior analysts actually needed to work on the contract will be specifically employed for the period of the contract. What is the total relevant cost of wages for the contract?Finch Construction Company is a building contractor specializing in small commercial buildings. The company has the opportunity to accept one of two jobs; it cannot accept both because they must be performed at the same time and Finch does not have the necessary labor force for both jobs. Indeed, it will be necessary to hire a new supervisor if either job is accepted. Furthermore, additional insurance will be required if either job is accepted. The revenue and costs associated with each job follow. Cost Category Contract price Unit-level materials. Unit-level labor Unit-level overhead Supervisor's salary Rental equipment costs Depreciation on tools (zero market value) Allocated portion of company-wide facility-sustaining Insurance cost for job Required Required A B costs Required a. Assume that Finch has decided to accept one of the two jobs. Fill in the information relevant to selecti versus the other. Recommend which job to accept. one job b. Assume that Job A is no longer available.…Finch Construction Company is a building contractor specializing in small commercial buildings. The company has the opportunity to accept one of two jobs; it cannot accept both because they must be performed at the same time and Finch does not have the necessary labor force for both jobs. Indeed, it will be necessary to hire a new supervisor if either job is accepted. Furthermore, additional insurance will be required if either job is accepted. The revenue and costs associated with each job follow. Cost Category Contract price Unit-level materials. Unit-level labor Unit-level overhead Supervisor's salary Rental equipment costs Depreciation on tools (zero market value) Allocated portion of company-wide facility-sustaining costs Insurance cost for job Required Assume that Finch has decided to accept one of the two jobs. Fill in the information relevant to selecti versus the other. Recommend which job to accept. Required Required A B one job b. Assume that Job A is no longer available.…
- Wanda Instrumentation produces navigational equipment for ships, aircraft (both staffed and drones), and land vehicles. The parts are produced to specification by their customers. Depending on the customer and the type of job, the customer pays according to the terms of either a "fixed-price" contract (the price does not depend directly on the cost of the job) or of a "cost-plus" contract (the price is equal to recorded cost plus a fixed fee). Wanda expects only two clients (Ivanhoe Aviation and Rolf's Shipyard) in Year 2. The work done for Ivanhoe will all be done under cost-plus contracts while the work done for Rolf's will all be done under fixed-price contracts. Selected budget data for Year 2 include the following: Direct labor cost ($000) Direct materials cost ($000) Manufacturing overhead ($000) Ivanhoe Aviation $ 660 1,980 Required A Required B Required: a. Compute the predetermined rate assuming that Wanda Instrumentation uses direct labor costs to apply overhead. b. Compute…Wanda Instrumentation produces navigational equipment for ships, aircraft (both staffed and drones), and land vehicles. The parts are produced to specification by their customers. Depending on the customer and the type of job, the customer pays according to the terms of either a "fixed-price" contract (the price does not depend directly on the cost of the job) or of a "cost-plus" contract (the price is equal to recorded cost plus a fixed fee). Wanda expects only two clients (Ivanhoe Aviation and Rolf's Shipyard) in Year 2. The work done for Ivanhoe will all be done under cost-plus contracts while the work done for Rolf's will all be done under fixed-price contracts. Selected budget data for Year 2 include the following: Ivanhoe Aviation Rolf's Shipyard Unassigned Direct labor cost ($000) $ 660 $ 2,340 Direct materials cost ($000) 1,980 1,620 Manufacturing overhead ($000) $ 6,480 Required: Compute the predetermined rate assuming that Wanda Instrumentation uses…Beto Company pays $6.90 per unit to buy a part for one of the products it manufactures. With excess capacity, the company is considering making the part. Making the part would cost $7.80 per unit for direct materials and $1.00 per unit for direct labor. The company normally applies overhead at the predetermined rate of 200% of direct labor cost. Incremental overhead to make the part would be 80% of direct labor cost. (a) Prepare a make or buy analysis of costs for this part. (Enter your answers rounded to 2 decimal places.) (b) Should Beto make or buy the part? (a) Make or Buy Analysis Direct materials Direct labor Overhead Cost to buy Cost per unit Cost difference (b) Company should: Make Buy
- The financial manager of IDO, a company that manufactures and installs lifts (elevators), has to prepare a price for an order for a new lift for company A. Because A is a long-standing customer, IDO is prepared to provide this at a price that covers its relevant costs, with no mark-up-in order to secure a large future order. The lifts are manufactured to order in IDO’s factory. 180 hours of labour is needed at a cost of R14/hour. IDO currently has 120 hours of unused labour that could be utilized. The raw materials needed to make the lift will cost R61 000. The installation of the lift is done by sub-contractors. A site review has already been conducted at a cost of R3 000 and the sub-contractor has offered to undertake the job at a further cost of R81 000. IDO has just received an order from company B for a lift that needs to be installed urgently. The total profit of this job would be R48 000. IDO does not have the machine capacity to deliver lifts for both A and B. Which price…A company currently pays $5 per unit to buy a key part for a product it manufactures. It can make the part for $1.50 per unit for direct materials and $2.50 per unit for direct labor. The company normally allocates overhead costs at the rate of 50% of direct labor. Incremental overhead costs to make this part are $0.75 per unit. Should the company make or buy the part?A company is calculating the relevant cost of the material to be used on a particular contract. The contract requires 4,200 kgs of material H and this can be bought for $6.30 per kg. The company bought 10,000 kgs of material H some time ago when it paid $4.50 per kg. Currently 3,700 kgs of this remains in inventory. The inventory of material H could be sold for $3.20 per kg. The company has no other use for material H other than on this contract, but it could be modified it at a cost of $3.70 per kg and use it as a substitute for material J. Material J is regularly used by the company and can be bought for $7.50 per kg. What is the relevant cost of the material for the contract? A $17,210 B $19,800 C $26,460 D $30,900
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