Sheffield’s Nut House is a processor and distributor of a variety of different nuts. The company buys nuts from around the world and roasts, seasons, and packages them for resale. Sheffield’s Nut House currently offers 15 different types of nuts in one-pound bags through catalogs and gourmet shops. The company’s major cost is that of the raw nuts; however, the predominantly automated roasting and packing processes consume a substantial amount of manufacturing overhead cost. The company uses relatively little direct labor. Some of Sheffield’s nuts are very popular and sell in large volumes, but some of the newer types sell in very low volumes. Sheffield’s prices its nuts at cost (including overhead) plus a markup of 50%. If the resulting prices of certain nuts are significantly higher than the market price, adjustments are made. Although the company competes primarily on the quality of its products, customers are price conscious. Data for the annual budget include manufacturing overhead of $ 8,763,000, allocated on the basis of each product’s direct labor cost. The annual budgeted direct labor cost totals $ 1,752,600. Based on the sales budget and raw materials standards, purchases and use of raw materials are expected to total $ 9,000,000 for the year. The unit raw material and direct labor costs of a one-pound bag of two of the company’s products follows. Question: Purchasing $__________ per order Material handling $__________ per set up Quality control $__________ per batch
Sheffield’s Nut House is a processor and distributor of a variety of different nuts. The company buys nuts from around the world and roasts, seasons, and packages them for resale. Sheffield’s Nut House currently offers 15 different types of nuts in one-pound bags through catalogs and gourmet shops. The company’s major cost is that of the raw nuts; however, the predominantly automated roasting and packing processes consume a substantial amount of
Some of Sheffield’s nuts are very popular and sell in large volumes, but some of the newer types sell in very low volumes. Sheffield’s prices its nuts at cost (including overhead) plus a markup of 50%. If the resulting prices of certain nuts are significantly higher than the market price, adjustments are made. Although the company competes primarily on the quality of its products, customers are price conscious.
Data for the annual budget include manufacturing overhead of $ 8,763,000, allocated on the basis of each product’s direct labor cost. The annual budgeted direct labor cost totals $ 1,752,600. Based on the sales budget and raw materials standards, purchases and use of raw materials are expected to total $ 9,000,000 for the year.
The unit raw material and direct labor costs of a one-pound bag of two of the company’s products follows.
Question:
Purchasing $__________ per order
Material handling $__________ per set up
Quality control $__________ per batch
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