7 Required information [The following information applies to the questions displ

Question

7 Required information [The following information applies to the questions displayed below.j John Boyd Corporation manufactures and sells 1,000 tractors each month. The primary component in each tractor is the motor. John Boyd has the monthly capacity to produce 1,300 motors. The variable costs associated with manufacturing each motor are shown below: Part 1 of 2 2.85 points Direct materials Direct labor Variable manufacturing overhead $ 24 $ 16 $ 29 Skipped Fixed manufacturing overhead per month (for up to 1,300 units of production) averages $27,000. Joan Reid, Inc. has offered to purchase 200 motors from John Boyd per month to be used in its own outboard motors. If Joan Reid's order is rejected, what will be John Boyd 's average unit cost of manufacturing each motor?

Explanation / Answer

1 If order is rejected Per unit Amount Direct material 24 24000 Direct labor 16 16000 Variable manufacturing cost 29 29000 Fixed manufacturing cost 27000 Total manufacturing cost 96000 Average unit cost of manufacturing each motor 96 (96000/1000) 2 Incremental cost of producing each motor Direct material 24 Direct labor 16 Variable manufacturing cost 29 Total 69

Related Questions

Navigate

• Browse (All)
• Browse 7
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.