Homework Answers
a) Year 2 Cost
| Direct material and supplies (47000*1.1) | 51700 |
| Direct labor (2600000*1.15) | 2990000 |
| Variable overhead (11.8*40000) | 472000 |
| Fixed overhead (730000*1.05) | 766500 |
| Total | 4280200 |
b) Cost per billable hour
| Cost per billable hour | |
| Year 1 | (3967000/50000) = 79.34 |
| Year 2 | (4280200/40000) = 107.01 |
2a) Variable cost per machine hour = Change in Cost/Change in machine hour = (109129-96969)/(1606-1288) = 38
Fixed cost = 109129-(1606*38) = 48101
2b) Total fixed cost = 48101+(1400*38) = 101301
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