With the info provided make a calculation of the direct cost,
direct labor and determine the base cost of raw material and the
labor base cost according to the following lists.
The company KIA motors SA de CV presents the following
materials:
1. #12 steel sheets, $ 1500 each.
2. High quality industrial iron, $ 45,000 per ton
3. Industrial rubber # 23 at a cost of $ 13,500 per ton
4. Electronic sensors package for a unit at a cost of $
4,500.
5. Set of lights for one unit $ 12,500
6. Engine of 5 horses of 16 valves, 33,500 per unit
7. Game of internal accessories of the vehicle, $ 1,200 per unit
package
8. Set of screws for a total assembly, $ 9,800 per game
9. Industrial nylon for protection of the units, $ 4,500 per
ton
10. Transfer of finished units to the warehouse, $ 250 per
unit
Labour expenses
1. 10 specialized technicians, each one receives a salary of $
4,500
2.15 auxiliary technicians, each one receives $ 750 per day.
3. A plant supervisor with a monthly salary of $ 35,000
4. 3 auxiliary supervisors with a monthly salary of $ 15,000
5. The technicians generate a social security tax of 26% monthly on
salaries.
6. A 5% monthly tax is paid to Health insurance.
7. A monthly payroll tax is paid on the technicians.
8. Finally it takes some unforeseen extra hours for auxiliary technicians of 9 hours per week.
1.Determine the base cost of the car per unit if for the case of
the materials 10 cars are produced with
the materials of point 2, 3 and 9 and for the case of point 1,4
steel sheets are used, in all the others a set of units.
2. Determine the base cost of labor and
consider that for the construction of a car they do it in 3 hours a
day.
3. Determine the total production cost if 300 cars are produced per
month.
2. Base cost of Labor calculations
Given that 300 cars are produced per month. Also that 1 car requires 3 hours of labor.
So, Labor hours per month = 300 cars x 3 hours per car = 900 hours per type of labor.
We'll first compute the labor cost per car for each labor separately.
Specialized Technicians
10 technicians
monthly salary = $ 4500 per technician
Social Security tax = 26% on Salary = 26% of $4500 = $1170
Health Insurance = 5% of Salary = 5% of $4500 = $225
Total costs of 1 Specialized technician per month = $4500 + $1170 +
$225 = $5895
Total costs towards 10 Technicians = $58,950
900 hours of work is done per month.
So, Labor cost of Specialized Technicians per hour = $58,950 / 900
hours per month = $65.5 per hour
Auxiliary Technicians
In the absence of information of working hours per day and
working days per month, we will assume that the auxiliary
technicians also work for the same time per day as Specialized
technicians work( which is 9 hours per day)
So, each auxiliary technician works 9 hours a day
15 technicians (as the pay is per technician per day, number of
technicians become irrelevant here, as we will make calculations in
terms of number of technician days)
Daily pay = $ 750 per technician
Work required per month = (3 hours x 300 cars) + (9 unforeseen
hours x 4 weeks) = 900 + 36 = 936 hours
Number of work days required per month = 936 hours / 9 hours per
day = 104 technician days
Monthly pay to Auxiliary Technicians = 104 technician days x $750
per day = $78,000
Social Security tax = 26% on $78000 = $20,280
Health Insurance = 5% of $78,000 = $3900
Total costs towards Auxiliary technicians per month = $78000 +
$20280 + $3900 = $102180
So, Labor cost of Auxiliary Technicians per hour = $102180 / 936
hours per month = $109.17 per hour
Plant Supervisor
1 Supervisor
monthly salary = $ 35000 per month
Social Security tax = Payable only for technicians, not
supervisors
Health Insurance = 5% of Salary = 5% of $35000 = $1750
Total costs towards 1 Plant Supervisor per month = $35000 + $1750 =
$36750
900 hours of work is done per month.
So, Labor cost of Plant Supervisor per hour = $36750 / 900 hours
per month = $40.83 per hour
Auxiliary Supervisor
3 Supervisors
monthly salary = $ 15000 per month
Social Security tax = Payable only for technicians, not
supervisors
Health Insurance = 5% of Salary = 5% of $15000 = $750
Total costs towards 3 Auxiliary Supervisors per month = ($15000 +
$750) x 3 = $47250
900 hours of work is done per month.
So, Labor cost of Plant Supervisor per hour = $47250 / 900 hours
per month = $52.50 per hour
Base Cost of Labor per hour
With the info provided make a calculation of the direct cost, direct labor and determine the...
With the following information make a calculation of the direct cost, direct labor and determine the base cost of raw material and the labor base cost according to the following lists. The company KIA motors SA de CV presents the following materials: 1. #12 steel sheets, $ 1500 each. 2. High quality industrial iron, $ 45,000 per ton 3. Industrial rubber # 23 at a cost of $ 13,500 per ton 4. Electronic sensors package for a unit at a...
With the following information make a calculation of the direct cost, direct labor and determine the base cost of raw material and the labor base cost according to the following lists. The company KIA motors SA de CV presents the following materials: 1. #12 steel sheets, $ 1500 each. 2. High quality industrial iron, $ 45,000 per ton 3. Industrial rubber # 23 at a cost of $ 13,500 per ton 4. Electronic sensors package for a unit at a...
Cost per Equivalent Unit The cost of direct materials transferred into the Rolling Department of Oak Ridge Steel Company is $523,800. The conversion cost for the period in the Rolling Department is $273,600. The total equivalent units for direct materials and conversion are 2,700 tons and 4,800 tons, respectively. Determine the direct materials and conversion costs per equivalent unit. Direct materials cost per equivalent unit: $ Conversion cost per equivalent unit: $ per ton per ton
Direct materials Direct labor Variable manufacturing overhead Total standard cost per unit Standard Quantity or Hours 2.50 ounces 0.50 hours 0.50 hours Standard Price or Rate $28.00 per ounce $13.00 per hour $ 3.60 per hour Standard Cost $ 70.00 6.50 1.80 $ 78.30 For the month of August, Yankee Distilling recorded the following activity related to the production of Ripit: a. Materials purchased, 13,500 ounces at a cost of $361,800. b. There was no beginning inventory of materials; however,...
Cost per Equivalent Unit The cost of direct materials transferred into the Rolling Department of Oak Ridge Steel Company is $636,000. The conversion cost for the period in the Rolling Department is $302,100. The total equivalent units for direct materials and conversion are 3,000 tons and 5,300 tons, respectively. Determine the direct materials and conversion costs per equivalent unit. Direct materials cost per equivalent unit: $ per ton Conversion cost per equivalent unit: per ton
The cost of direct materials transferred into the Rolling Department of Oak Ridge Steel Company is $606,000. The conversion cost for the period in the Rolling Department is $312,000. The total equivalent units for direct materials and conversion are 3,000 tons and 5,200 tons, respectively. Determine the direct materials and conversion costs per equivalent unit. Direct materials cost per equivalent unit: $ per ton Conversion cost per equivalent unit: $ per ton
Sales, Production, Direct Materials Purchases, and Direct Labor Cost Budgets The budget director of Gourmet Grill Company requests estimates of sales, production, and other operating data from the various administrative units every month. Selected information concerning sales and production for July is summarized as follows: a. Estimated sales for July by sales territory: Maine: Backyard Chef 310 units at $700 per unit Master Chef 150 units at $1,200 per unit Vermont: Backyard Chef 240 units at $750 per unit Master...
able to apparent inefficient use of labor time? cost is not of concern? between this efficiency variance and the labor efficiency variance? rances computed in Standard Quantity or Hours Standard Price or Rate Standard Cost Variable manufacturing overhead Total standard cost per unit. 2.5 ounces 1.4 hours 1.4 hours $20.00 per ounce $22.50 per hour $3.50 per hour $50.00 31.50 4.90 $86.40 PROBLEM)-14 Basic Variance Analysis L010-1, L010-2, LO10-3 Fludex, is prepared using an elaborate distilling process. The company has...
Sales, Production, Direct Materials Purchases, and Direct Labor Cost Budgets The budget director of Gourmet Grill Company requests estimates of sales, production, and other operating data from the various administrative units every month. Selected information concerning sales and production for July is summarized as follows: a. Estimated sales for July by sales territory: Maine: Backyard Chef 310 units at $700 per unit Master Chef 150 units at $1,200 per unit Vermont: Backyard Chef 240 units at $750 per unit Master...
Sales, Production, Direct Materials Purchases, and Direct Labor Cost Budgets The budget director of Gourmet Grill Company requests estimates of sales, production, and other operating data from the various administrative units every month. Selected information concerning sales and production for July is summarized as follows: a. Estimated sales for July by sales territory: Maine: Backyard Chef 310 units at $700 per unit Master Chef 150 units at $1,200 per unit Vermont: Backyard Chef 240 units at $750 per unit Master...