Onandomba Pty (Ltd) provides skilled labour to the construction of low-cost apartments. They have recently been asked by a builder NHE to bid for a kitchen fitting contract for a new development of 600 identical apartments. Onandomba Pty (Ltd) has not worked for this builder before. Cost information for the new contract is as follows: Labour for the contract is available. Onandomba expects that the first kitchen will take 24 man-hours to fit but thereafter the time taken will be subject to a 95% learning rate. After 200 kitchens are fitted the learning rate will stop and the time taken for the 200th kitchen will be the time taken for all the remaining kitchens. Labour costs N$15 per hour. All overheads are absorbed on a labour hour basis. Onandomba Pty (Ltd) has collected overhead information for the last four months and this is shown below: Overheads (NS) Hour worked January 115 000 9 300 February 113 600 9 200 April 116 000 9 400 May 116 800 9 600 Onandomba Pty (Ltd) normally works around 150 000 labour hours in a year. Required: Calculate total variable cost that will be needed to complete the total 600 apartment. Assume total labour hours for 600 apartments is 9 800. Note: Learning coefficient should be rounded off to 3 decimals while all other answers be rounded off to 2 decimals. NB: You are not required to enter the unit or currency symbol. Enter a numerical answer with no space. For example: 1000 Answer:
Onandomba Pty (Ltd) provides skilled labour to the construction of low-cost apartments. They have recently been asked by a builder NHE to bid for a kitchen fitting contract for a new development of 600 identical apartments. Onandomba Pty (Ltd) has not worked for this builder before. Cost information for the new contract is as follows: Labour for the contract is available. Onandomba expects that the first kitchen will take 24 man-hours to fit but thereafter the time taken will be subject to a 95% learning rate. After 200 kitchens are fitted the learning rate will stop and the time taken for the 200th kitchen will be the time taken for all the remaining kitchens. Labour costs N$15 per hour. All overheads are absorbed on a labour hour basis. Onandomba Pty (Ltd) has collected overhead information for the last four months and this is shown below: Overheads (NS) Hour worked January 115 000 9 300 February 113 600 9 200 April 116 000 9 400 May 116 800 9 600 Onandomba Pty (Ltd) normally works around 150 000 labour hours in a year. Required: Calculate total variable cost that will be needed to complete the total 600 apartment. Assume total labour hours for 600 apartments is 9 800. Note: Learning coefficient should be rounded off to 3 decimals while all other answers be rounded off to 2 decimals. NB: You are not required to enter the unit or currency symbol. Enter a numerical answer with no space. For example: 1000 Answer:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please help me
Transcribed Image Text:Onandomba Pty (Ltd) provides skilled labour to the construction of low-cost apartments. They have recently been asked by a builder NHE to bid for a kitchen fitting contract for a new development of
600 identical apartments. Onandomba Pty (Ltd) has not worked for this builder before. Cost information for the new contract is as follows:
Labour for the contract is available. Onandomba expects that the first kitchen will take 24 man-hours to fit but thereafter the time taken will be subject to a 95% learning rate. After 200 kitchens are
fitted the learning rate will stop and the time taken for the 200th kitchen will be the time taken for all the remaining kitchens. Labour costs NS15 per hour.
All overheads are absorbed on a labour hour basis. Onandomba Pty (Ltd) has collected overhead information for the last four months and this is shown below:
Overheads (NS)
Hour worked
January
115 000
9 300
February
113 600
9 200
April
116 000
9 400
May
116 800
9 600
Onandomba Pty (Ltd) nomally works around 150 000 labour hours in a year.
Required: Calculate total variable cost that will be needed to complete the total 600 apartment. Assume total labour hours for 600 apartments is 9 800.
Note: Learning coefficient should be rounded off to 3 decimals while all other answers be rounded off to 2 decimals.
NB: You are not required to enter the unit or currency symbol.
Enter a numerical answer with no space. For example: 1000
Answer:
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education