Calculations for Rivera Corporation and Melrose Inc.
Not what you're looking for?
Problem 1. The following information is for a product manufactured and sold by Rivera Corporation:
Sales price per unit, $30
Variable cost per unit, $20
Total fixed costs, $200,000
Last year, Rivera earned a profit of $60,000
Required:
1) How many units did Rivera sell last year?
2) Rivera's managers are considering decreasing the sales price to $28 in an effort to increase market share. Also, the company wants a profit of $80,000. How many units would it have to sell at the lower selling price to achieve this target?
Problem 2. The management accountant at Melrose, Inc. provided the following estimated costs for producing 5,000 units of a specialty product manufactured by the firm. The company believes that direct labor hours are the most appropriate cost driver for assigning overhead costs to its product.Please refer to the attachment to view the estimated costs.
Required:
1) Compute the predetermined overhead rate for this company.
2) Compute the specialty product's total estimated cost per unit.
3) Why do firms assign overhead costs using a predetermined overhead rate instead of assigning actual costs?
Purchase this Solution
Solution Preview
Your tutorial includes an Excel spreadsheet and a paragraph giving you two different ...
Education
- BSc, University of Virginia
- MSc, University of Virginia
- PhD, Georgia State University
Recent Feedback
- "hey just wanted to know if you used 0% for the risk free rate and if you didn't if you could adjust it please and thank you "
- "Thank, this is more clear to me now."
- "Awesome job! "
- "ty"
- "Great Analysis, thank you so much"
Purchase this Solution
Free BrainMass Quizzes
Cost Concepts: Analyzing Costs in Managerial Accounting
This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.
Academic Reading and Writing: Critical Thinking
Importance of Critical Thinking
Business Ethics Awareness Strategy
This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.
Production and cost theory
Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.
Transformational Leadership
This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.