Turner Food Products manufactures a popular line of microwaveable meals. There a

Question

Turner Food Products manufactures a popular line of microwaveable meals. There are 32 employees devoted to one production line. The employees work 40 hours per week and receive $15.60/hour plus 18% In benefits. The product takes 1.30 minutes to produce one meal. The food used in the product costs $2.80/meal. The yield rate is 82%. Ninety-five percent of the product is acceptable for shipment. The plants overhead and indirect labor costs are $27280/week. This particular product use 35% of the production capacity. a.) Determine the cost to produce a meal. (Note: Solutions I can't follow will receive 0 points.)

Explanation / Answer

Time to produce meal 1.30 Minutes Employee cost per hour                15.60 Benefits @18%(15.6*18%) per hour                  2.81 Total employee Cost per hour                18.41 Total employee Cost per meal                  0.40 Food cost per meal                  2.80 Total cost per meal(.39884+2.8)                  3.20 Food Acceptable                  0.95 Since loss is normal we have to consider normal loss as our cost Total Variable cost per meal(3.19884/.95)                  3.37 No of employees                32.00 Hours per week                40.00 Total hours available in Week          1,280.00 Total meals produced(1280*60/1.30)        59,076.92 Meals acceptable @95%        56,123.08 Total fixed cost per week        27,280.00 FC Attributable to meals @35%          9,548.00 Meals acceptable @95%        56,123.08 FC per meal                  0.17 Total Cost of meal(FC+VC)                  3.54

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