Answered: Cost per unit: Direct labor $ 18.00…

Cost per unit: Direct labor $ 18.00 Direct materials 90.00 Factory overhead (Including depreciation) Total cost per unit 112.00 $220.00

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 10MC: Direct material costs $3 per unit, direct labor costs $5 per unit, and overhead is applied at the...

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

Average rate of return-new product

Hana Inc.is considering an invetment in new equipment that will be used to manufacture a smart-phone.The phone is expected to generate additional annual sales of 10,000 units at $300 per unit. The equipment has a cost of $ 4,500,000,residual value of $500,000,and a 10-year life.The equipment can only be used to manufacture the phone.The cost to manufacture the phone follows:

Determine the average rate of return on the equipment.

Cost per unit:
Direct labor
$ 18.00
Direct materials
90.00
Factory overhead (Including depreciation)
Total cost per unit
112.00
$220.00

Definition Definition Percentage gain or loss from a specific investment over time. The rate of return is the difference between the closing and initial values of an investment divided by the initial value of the investment. The closing value includes any intermediate cash flows such as dividends or interest amounts.

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