The Lolitasut Company has designed a new product X301 for aerospace industry. Based on internal research and market study. Alerus estimates this new product could be sold for P1,000 er unit. The senior leadership team required a gross profit margin of at least 40% on the selling price to cover the total marketing and administration costs and to generate an acceptable level of profit. Consider the data below on the production cost estimate of the new product.: Direct Material A Direct material B P200/unit P90 per meter; each unit of x301 will require four meters of DM2; but here will be loss in production of 10%of the material used P152/hour; each unit of x301 will require 0.50 hours of direct labor time. However, the company expects that there will be unavoidable idle time equal to 5% of the total labor time paid for. belitesut expects that manufacturing overhead will be absorbed into product costs at the rate of P100 per direct labor hour for each active hour worked. Overheads are not absorbed into the cost of the idle time. Direct Labor Factory overhead Tasks: Recommend the target Cost for this product by computing expected costs for x301 and present the cost

The Lolitasut Company has designed a new product X301 for aerospace industry. Based on internal research and market study. Alerus estimates this new product could be sold for P1,000 er unit. The senior leadership team required a gross profit margin of at least 40% on the selling price to cover the total marketing and administration costs and to generate an acceptable level of profit. Consider the data below on the production cost estimate of the new product.: Direct Material A Direct material B P200/unit P90 per meter; each unit of x301 will require four meters of DM2; but here will be loss in production of 10%of the material used P152/hour; each unit of x301 will require 0.50 hours of direct labor time. However, the company expects that there will be unavoidable idle time equal to 5% of the total labor time paid for. belitesut expects that manufacturing overhead will be absorbed into product costs at the rate of P100 per direct labor hour for each active hour worked. Overheads are not absorbed into the cost of the idle time. Direct Labor Factory overhead Tasks: Recommend the target Cost for this product by computing expected costs for x301 and present the cost

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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