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KARATE Corp. is capable of turning out 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 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

KARATE Corp. is capable of turning out 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 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

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter13: The Balanced Scorecard: Strategic-based Control
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KARATE Corp. is capable of turning out 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 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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