collective overhead. The overhead and direct labor dollars for model years 1987 through 1990 is stated in Appendix A‚ as presented in the Harvard Business School 9-190-085 case study. For the 1987 model year‚ overhead was applied to the products as a percentage of direct labor cost for the production of the respective product. This overhead percentage was calculated “at budget time” and then applied throughout the 1987 production year. 2. TRENDS FOR MODEL YEARS The overhead and direct labor
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that per unit production time reduced at an unvarying rate Since then‚ learning curves (also known as progress functions) have been applied to all types of work INTRODUCTION A graphical representation of the changing rate of learning (in the average person) for a given activity or tool The underlying hypothesis is that the direct labor man-hours necessary to complete a unit of production will decrease by a constant percentage each time the production quantity is doubled EXAMPLE FUNDAMENTAL
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History and Background Anagene is a biotechnology firm started by Mark Hansen and Harold Bergman in 1993. Hansen and Bergman planned to combine microelectronics and molecular biology to develop products that would have broad commercial applications in genomics and other fields. Anagene’s mission was to facilitate breakthrough genetic analysis. The company went public in the year 1998 and raised $42.9 million. The company’s core product was a cartridge which had to be analyzed with a Anagene-designed
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product has established the following standards for its variable overhead. The company uses direct labor-hours (DLHs) as its measure of activity. [pic] The following data pertain to operations for the last month: [pic] Brewer - Chapter 09 2. What is the variable overhead efficiency variance for the month? A. $504 U B. $1‚120 U C. $1‚120 F D. $1‚144 F SH = 2‚400 ( 0.7 = 1‚680 Variable overhead efficiency variance = SR (AH - SH) = $14.30 (1‚600 - 1‚680) = $1
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Direct Labour will be projected at: o 0.75 hours of Direct Labour per unit o Direct Labour Cost: $8.50/hour The Facilities Manager has estimated that the Manufacturing Overhead will be projected at: o Variable Overhead Rate to be $8 per Direct Labour hours o Fixed Overhead Rate to be $3‚000 per month The Accounting Department Manager has provided the following information: Selling and Administrative Expenses are projected to be a monthly cost of:
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| Palms Hospital | Memo To: From: CC: Date: [ 7/30/2010 ] Re: Ambulatory Surgical Center Executive Summary The Palms Hospital is considering an expansion project that would utilize land previously purchased. By expanding into ambulatory surgical services‚ the hospital has the opportunity to increase revenues and capture market share in this area. Investigation in the NPV of the project and a scenario analysis reveal that the project would be profitable. Debt Financing This project
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Morrissey Forgings‚ Inc. This heavily disguised case is set in the "mature" woodstoves business in 1986. It is not based on The Vermont Castings Company. The issue is product line strategy based on product line profitability. In early 1986‚ Tim Morrissey was reviewing the disappointing 1985 results of operations for his company (see Exhibit 1). The business had been founded in 1938 by Tim’s grandfather as a modernization of an older iron forge company which Tim’s great-great-grandfather had
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1 Conversion cost consists of which of the following? a. Manufacturing overhead cost. b. Direct materials and direct labor cost. c. Direct labor cost. d. Direct labor and manufacturing overhead cost. 2. Transportation costs incurred by a manufacturing company to ship its product to its customers would be classified as which of the following? a. Product cost b. Manufacturing overhead c. Period cost d. Administrative cost 3. The salary of the president of a manufacturing company
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overdraft at an annual rate of 6%. The 10% debenture is secured on fixed assets of the company. Hendil plc plans to invest £1 million in a new product range and has forecast the following financial information: Year Sales volume (units) Average selling price (£/unit) Average variable costs (£/unit) Incremental cash fixed costs (£/year) 1 70‚000 40 30 500‚000 2 90‚000 45 28 500‚000 3 100‚000 51 27 500‚000 4 75‚000 51 27 500‚000 The
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Absorption costing prorates the fixed overheads between units in inventory and units sold based on machine hours. Absorption costing net income is higher than under variable costing by $1.2 million. This means that inventories under absorption costing are higher by $1.2 million. The ending work-in-process inventory contains 20‚000 more machine hours than the beginning inventory (90‚000 – 70‚000 machine hours). From the data given‚ the fixed overhead rate applied to products is $60 per machine
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