Question 4A Joe worked on his accounting homework for one and one half hours. Du

Question

Question 4A
Joe worked on his accounting homework for one and one half hours. During that time, he completed 6 problems. What is the cycle time for one problem?

a 15 minutes

b 90 minutes

c 4 minutes

d 10 minutes

e 6 minutes




Question 4B
A company is considering a special order for 1,000 units to be priced at $8.90 (the normal price would be $11.50). The order would require specialized materials costing $4.00 per unit. Direct labor and variable factory overhead would cost $2.15 per unit. Fixed factory overhead is $1.20 per unit. However, the company has excess capacity and acceptance of the order would not raise total fixed factory overhead. The warehouse, however, would have to add capacity costing $1,300. Which of the following is relevant to the special order?

a $11.50 normal selling price

b $1.20 fixed factory overhead per unit

c $7.35 spent on donuts and coffee

d $8.90 selling price per unit of special order

e none of these

Explanation / Answer

4A Number of Problems completed 6 Time taken to complete them 90 Mins Time taken to complete 1 problem 90 / 6 15 mins Hence, the answer is a.15 Mins 4B Here the relevant Costs would be : Revenue( 8.9 *1000) 8900 Variable Cost (6.15 * 1000 ) 6150 Additional Warehouse Costs 1300 Total Costs 7450 Relevant Cost s(8900 - 7450 ) 1450 Hence , answer is e.None of these.

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