Shelby Shelving Data for Current Production Schedule Machine requirements (hours

Question

Shelby Shelving Data for Current Production Schedule Machine requirements (hours per unit) Given monthly overhead cost data Model S Model LX Fixed Variable S Variable LX Stamping 0.3 0.3 Stamping $125,000 $80 $90 Forming 0.25 0.5 Forming $95,000 $120 $170 Model S Assembly $80,000 $165 $0 Model S Model LX Model LX Assembly $85,000 $0 $185 Current monthly production 400 1400 Standard costs of the shelves -- based on the current production levels Hours spent in departments Model S Model LX Model S Model LX Totals Direct materials $1,000 $1,200 Stamping 120 420 540 Direct labor: Forming 100 700 800    Stamping $35 $35    Forming $60 $90 Percentages of time spent in departments    Assembly $80 $85 Model S Model LX Total direct labor $175 $210 Stamping 22.2% 77.8% Overhead allocation Forming 12.5% 87.5%    Stamping $149 $159    Forming $150 $229 Unit selling price $1,800 $2,100    Assembly $365 $246 Total overhead $664 $635 Assembly capacity 1900 1400 Total cost $1,839 $2,045 QUESTION 3 3] Fixed costs in cell G5:G8 are large because each of these costs is a function of output produced. True False QUESTION 4 [4] Given the resurce constraints provided in this problem it is economically possible for the business to produce at full capacity O True False

Explanation / Answer

Question 3

Fixed cost are cost which are fixed. These are independent of the output produced so the given statement is false.

Question 4

No, it is not economically posibille as Assembly capacity iss slack variable here.

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