14. PQR Company expects to incur the following costs at the planned production level of 10,000 units: Direct materials Direct labor Variable overhead Fixed overhead The selling price is P50 per unit. The company currently operates at full capacity of 10,000 units. Capacity can be increased to 13,000 units by operating overtime. Variable costs increase by P14 per unit for overtime production. Fixed overhead costs remain unchanged when overtime operations occur. PQR Company has received a special order from a wholesaler who has offered to buy 2,000 units at P45 each. P100,000 120,000 60,000 30,000 What is the incremental cost associated with this special order? d. P42,000 a. P84,000 b. P31,000 c. P62,000

14. PQR Company expects to incur the following costs at the planned production level of 10,000 units: Direct materials Direct labor Variable overhead Fixed overhead The selling price is P50 per unit. The company currently operates at full capacity of 10,000 units. Capacity can be increased to 13,000 units by operating overtime. Variable costs increase by P14 per unit for overtime production. Fixed overhead costs remain unchanged when overtime operations occur. PQR Company has received a special order from a wholesaler who has offered to buy 2,000 units at P45 each. P100,000 120,000 60,000 30,000 What is the incremental cost associated with this special order? d. P42,000 a. P84,000 b. P31,000 c. P62,000

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Description: Answer with solutions 14. PQR Company expects to incur the following costs at the planned production level of 10,000units:Direct materialsDirect laborVariable overheadFixed overheadP100,000120,00060,00030,000The selling price is P50 per unit. The com

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter4: Job Order Costing

Section: Chapter Questions

Problem 3PA: Pocono Cement Forms expects $900,000 in overhead during the next year. It does not know whether it...

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Hatch Manufacturing produces multiple machine parts. The theoretical cycle time for one of its products is 65 minutes per unit. The budgeted conversion costs for the manufacturing cell dedicated to the product are 12,960,000 per year. The total labor minutes available are 1,440,000. During the year, the cell was able to produce 0.6 units of the product per hour. Suppose also that production incentives exist to minimize unit product costs. Required: 1. Compute the theoretical conversion cost per unit. 2. Compute the applied conversion cost per minute (the amount of conversion cost actually assigned to the product). 3. Discuss how this approach to assigning conversion cost can improve delivery time performance. Explain how conversion cost acts as a performance driver for on-time deliveries.
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