The Patience Corporation operates six days a week (Monday – Saturday) on a two-eight hour shifts. The plant which can complete ten (10) units per hour is closed twelve working days each year for holidays, machines are repaired, oiled and cleaned for about 616 hours during the period. Normal sales demand for its products averages 40,000 units a year over a five-year period. The expected sales volume for the year is 35,000 units. The fixed costs amount to P210,000 per year. REQUIRED: A. Compute the fixed costs per hour under each of the four capacities B. Compute the idle capacity costs under each of the four capacities if the plant operates at 3,400 hours.
The Patience Corporation operates six days a week (Monday – Saturday) on a two-eight hour shifts. The plant which can complete ten (10) units per hour is closed twelve working days each year for holidays, machines are repaired, oiled and cleaned for about 616 hours during the period. Normal sales demand for its products averages 40,000 units a year over a five-year period. The expected sales volume for the year is 35,000 units. The fixed costs amount to P210,000 per year. REQUIRED: A. Compute the fixed costs per hour under each of the four capacities B. Compute the idle capacity costs under each of the four capacities if the plant operates at 3,400 hours.
Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter16: Job Order Costing
Section: Chapter Questions
Problem 4CMA: Patterson Corporation expects to incur 70,000 of factory overhead and 60,000 of general and...
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The Patience Corporation operates six days a week (Monday – Saturday) on a two-eight hour
shifts. The plant which can complete ten (10) units per hour is closed twelve working days each
year for holidays, machines are repaired, oiled and cleaned for about 616 hours during the period.
Normal sales demand for its products averages 40,000 units a year over a five-year period. The
expected sales volume for the year is 35,000 units. The fixed costs amount to P210,000 per year.
REQUIRED:
A. Compute the fixed costs per hour under each of the four capacities
B. Compute the idle capacity costs under each of the four capacities if the plant operates at
3,400 hours.
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