Adirondack Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plantwide factory overhead ra

te for allocating overhead to products. However, management is considering moving to a multiple department rate system for allocating overhead. Overhead Total Direct Labor Hours DLH per Product A B Painting Dept. $255,200 10,100 3 11 Finishing Dept. 65,700 11,200 6 7 Totals $320,900 21,300 9 18 Using a single plantwide rate, the factory overhead allocated per unit of Product A in the Painting Department is a.$15.07 per unit b.$75.80 per unit c.$45.21 per unit d.$682.22 per unit

Business

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In 2009, the great recession finally took its toll on the Alamo Title company in San Antonio, Texas. The housing business was in

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Answer:

Theory X management style

Explanation:

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150/12.5

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additional revenue = $26,250

relevant costs:

direct materials = 350 x $82 = $28,700

direct labor = 525 x $15 = $7,875

setup hours = 1 x $5 = $5

inspection costs = 20 x $5 = $100

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total relevant costs = $37,205

1) change in income if order is accepted:

total revenue - total relevant costs = $26,250 - $37,205 = -$10,955

the company will incur a loss of $10,955 if the order is approved.

2) if the cost of direct materials is decreased by $13 per unit = $13 x 350 = $4,550, and if direct labor can be reduced by 0.5 hours per unit = 175 hours (= 175 x $15 = $2,625) ⇒ total relevant costs will be lowered by $7,175.

It results in a $3,780 (= $10,955 - $7,175) loss if the special order is accepted.