•An unexpected order has been received for a product for which the labour and machine time...
•An unexpected order has been received for a product for which the labour and machine time is available and which requires three types of material A, B, C.
•Material A. This material is used regularly within the firm for various products. The new order will require 1500 kgs. The present stock is 21,000 kgs purchased at £2.50 per kg. The current replenishment price is £2.65 per kg and it is estimated that if 1500 kgs is used on the new order the normal stock replenishment order for A will have to be brought forward 3 weeks at which time it is estimated that the replenishment price will be £2.70 per kg.
•Material B.1000 kgs of this material are in stock purchased at 85p per kg and the new order requires 800 kgs. The current replacement price is 95p per kg. This material is used on no other product and recent enquiries revealed that the material in stock could be sold at 55p per kg.
•Material C.5000 kgs are required for the order and large quantities are in stock purchased at 18p per kgs. Because of heavy usage the materials is purchased weekly and the current price is 21p per kg.
•What is the relevant cost for decision making purposes of each of the three materials?
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•An unexpected order has been received for a product for which
the labour and machine time...
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1.25 hours
Standard price or rate.
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$
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Standard cost per unit
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$
11.25
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Talia Company produces a single product. The company has set
standards as follows for materials and labour:
Direct Materials
Direct Labour
Standard quantity or hours per unit
? kilograms
1.25 hours
Standard price or rate.
? per kilogram
$
10 per hour
Standard cost per unit
?
$
11.25
During the past month, the company purchased 3,000 kilograms of
direct materials at a cost of $8,250. All of this material was used
in the production of 700 units of product....
Talia Company produces a single product. The company has set
standards as follows for materials and labour:
Direct Materials
Direct Labour
Standard quantity or hours per unit
? kilograms
1.25 hours
Standard price or rate.
? per kilogram
$
10 per hour
Standard cost per unit
?
$
11.25
During the past month, the company purchased 3,000 kilograms of
direct materials at a cost of $8,250. All of this material was used
in the production of 700 units of product....
Case 2-59 Part 1 1. Alderon Enterprises is evaluating a special order it has received for a ceramic fixture to be used in aircraft engines. Alderon has recently been operating at less than full capacity, so the firm's management will accept the order if the price offered exceeds the costs that will be incurred in producing it. You have been asked for advice on how to determine the cost of two raw materials that would be required to produce the...
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