Question

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$200 each $5,000 $150 each $4,000 $100 each $1 each bike Let build a car / bike and dertemine its cost and selling price: 1. Cash balance $500,000 2. Purchase direct material to build the bike. 3. Two assembly workers to build the bike get paid $40 per hour. It will take 8 hours to build a 4. One Production Manager get paid $500 per day. 5. One Factory supervisor to perform quality control on the car built get paid $100 per hour Factory Supervisor's total work hour will be equal half of total hours required to build a 6. Utility expense is $500 per day. 7. Factory equipment depreciation is $800 per day 8. Factory Insurance expense is $500 per day. 9. The applied Factory overhead will be calculated at 200% of total Direct Labor cost. 10. Selling and marketing expense will be 10% of Cost of Goods Sold. 11. Manager wants to make 25% mark up of Total Costs on the bike. Determine the selling price. bike. !!! Assume each business day is 8 hour.

Answer 1

8 Hours Particulars Amount Working Total Direct Material $9,706 5000 + 4000 + 200 + (150 2) + (100 X 2) + (1x6) Total time to build the bike Given Total direct Labour $640 8 hours x 2 labours x 40 per hour Total Factory Overhead $2,700 WN1 Total Factory Overhead applied $1,280 640 x 200% Total Cost of good manufactured $13,046 Direct Material + Direct Labour + Factory overhead Total product cost for Finished Products $13,046 Same as no office expenses Total Cost of goods sold $13,046 same as no opening and closing inventory Selling and marketing expenses $1,305 10% of cost of goods sold 13046 x 10 % Cost of Sales/Total Cost $14,351 COGS + Selling Expenses Total Selling Price $17,938 Total Cost x 125% Ending cash balance after Sale $5,04,387 500000 - 13046 - 1305 + 800 + 17938 Note: All Expenses are considered to produce one bike WN1 Total Factory Overhead Production manager Factory Supervisor $400 100 per hour x 4 hour (half of labour hours) Utility Expenses Factory Equipment Depreciation $800 Factory Insurance Expenses $500 Total Factory Overhead $2,700 $500 $500