NEW MyLab Accounting with Pearson eText -- Access Card -- for Financial Accounting
NEW MyLab Accounting with Pearson eText -- Access Card -- for Financial Accounting
10th Edition
ISBN: 9780133437287
Author: Walter T. Harrison Jr., Charles T. Horngren, C. William Thomas
Publisher: PEARSON
Question
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Chapter 12, Problem 12.25E

1.

a.

To determine

To calculate: The amount and cost of unused manufacturing capacity.

Given information:

Actual units of capacity at starting of 2014 is 250 units

Actual units sold in 2014 are 210 units.

Conversion cost per unit of capacity is $8,100

b.

To determine

To calculate: The amount and cost of unused selling and customer-service capacity.

Given information:

Selling and customer service capacity at starting of 2014 is 100 customers.

Selling and customer service capacity in 2014 is 80 customers.

Selling and customer service capacity cost per customer is $9,900.

2.

To determine

To calculate: The maximum amount of cost that S could save in 2014 by downsizing manufacturing capacity.

Given information:

Conversion cost per unit of capacity is $8,100.

Downsizing the manufacturing capacity by 30 units.

3.

To determine

To identify: The reason for not downsize the capacity.

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