ENEROW Corp. Is capable of turning out fifteen (15) completed units every 30 seconds. The plant normally operates five days a week on a two eight-hour shift. Each year, the factory is closed twelve (12) working days for holidays. Machinery is idle 750 hours for cleaning, oiling and maintenance. Normal sales averages 110,000 units a year over a five-year period. The expected sales volume for the year is 112,500 units. The fixed cost of operating the plant amounted to P385, 000 per year. 1. Compute the fixed unit costs under Practical capacity 2. Compute the Idle capacity cost under normal capacity if the plant operated at 3,400 hours.
ENEROW Corp. Is capable of turning out fifteen (15) completed units every 30 seconds. The plant normally operates five days a week on a two eight-hour shift. Each year, the factory is closed twelve (12) working days for holidays. Machinery is idle 750 hours for cleaning, oiling and maintenance. Normal sales averages 110,000 units a year over a five-year period. The expected sales volume for the year is 112,500 units. The fixed cost of operating the plant amounted to P385, 000 per year. 1. Compute the fixed unit costs under Practical capacity 2. Compute the Idle capacity cost under normal capacity if the plant operated at 3,400 hours.
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter8: Tactical Decision-making And Relevant Analysis
Section: Chapter Questions
Problem 54P
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ENEROW Corp. Is capable of turning out fifteen (15) completed units every 30 seconds. The plant normally operates five days a week on a two eight-hour shift. Each year, the factory is closed twelve (12) working days for holidays. Machinery is idle 750 hours for cleaning, oiling and maintenance. Normal sales averages 110,000 units a year over a five-year period. The expected sales volume for the year is 112,500 units. The fixed cost of operating the plant amounted to P385, 000 per year.
1. Compute the fixed unit costs under Practical capacity
2. Compute the Idle capacity cost under normal capacity if the plant operated at 3,400 hours.
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