question archive Ratliff Appliances Company makes a household appliance with model number RM16
Ratliff Appliances Company makes a household appliance with model number RM16
Subject:AccountingPrice:3.87 Bought7
Ratliff Appliances Company makes a household appliance with model number RM16. The goal for 2020 is to reduce direct materials usage per unit. No defective units are currently produced. Manufacturing conversion costs depend on production capacity defined in terms of RM16 units that can be produced. The industry market size for appliances increased 10% from 2019 to 2020. The following additional data are available for 2019 and 2020:
2019 2020 Units Produced & Sold 33,000 37,950 Selling Price $ 360 $ 345 Direct Materials (square feet) 82,500 87,000 Direct Material Costs per square foot $ 31 $ 33 Manufacturing capacity (units) 41,250 39,850 Total Conversion Costs $ 866,250 $ 797,000 Conversion Costs per unit of capacity $ 21 $ 20
Compute the adjusted units for the flexible / variable resource.
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Solution is as follows,
Step-by-step explanation
Given Units Produced & Sold = 33,000 and 37,950
Given Manufacturing capacity (units) = 41,250 and 39,850
adjusted units for the flexible / variable resource is
2019 = 41,250 - 33,000 = 8,250 units
2020 = 39850 - 37950 = 1900 units
