This paper circulates around the core theme of PROBLEM 2–17 High-Low Method; Predicting Cost [LO3, LO4] Echeverria SA is an Argentinian… 1 answer below » PROBLEM 2–17 High-Low Method; Predicting Cost [LO3, LO4] Echeverria SA is an Argentinian manufacturing company whose total factory overhead c together with its essential aspects. It has been reviewed and purchased by the majority of students thus, this paper is rated 4.8 out of 5 points by the students. In addition to this, the price of this paper commences from £ 99. To get this paper written from the scratch, order this assignment now. 100% confidential, 100% plagiarism-free.
EXERCISE 2–9 Cost Classification [LO1, LO2, LO3, LO7] Several years ago Medex Company purchased a… 1 answer below » EXERCISE 2–9 Cost Classification [LO1, LO2, LO3, LO7] Several years ago Medex Company purchased a small building adjacent to its manufacturing plant in order to have room for expansion when needed. Since the company had no immediate need for the extra space, the building was rented out to another company for rental revenue of $40,000 per year. The renter’s lease will expire next month, and rather than renewing the lease, Medex Com- pany has decided to use the building itself to manufacture a new product. Direct materials cost for the new product will total $40 per unit. It will be View complete question » EXERCISE 2–9 Cost Classification [LO1, LO2, LO3, LO7] Several years ago Medex Company purchased a small building adjacent to its manufacturing plant in order to have room for expansion when needed. Since the company had no immediate need for the extra space, the building was rented out to another company for rental revenue of $40,000 per year. The renter’s lease will expire next month, and rather than renewing the lease, Medex Com- pany has decided to use the building itself to manufacture a new product. Direct materials cost for the new product will total $40 per unit. It will be necessary to hire a supervisor to oversee production. Her salary will be $2,500 per month. Workers will be hired to manufacture the new product, with direct labor cost amounting to $18 per unit. Manufacturing operations will occupy all of the building space, so it will be necessary to rent space in a warehouse nearby in order to store finished units of product. The rental cost will be $1,000 per month. In addi- tion, the company will need to rent equipment for use in producing the new product; the rental cost will be $3,000 per month. The company will continue to depreciate the building on a straight-line basis, as in past years. Depreciation on the building is $10,000 per year. Advertising costs for the new product will total $50,000 per year. Costs of shipping the new product to customers will be $10 per unit. Electrical costs of operating machines will be $2 per unit. To have funds to purchase materials, meet payrolls, and so forth, the company will have to liqui- date some temporary investments. These investments are presently yielding a return of $6,000 per year. Required: Prepare an answer sheet with the following column headings: List the different costs associated with the new product decision down the extreme left col- umn (under Name of the Cost). Then place an X under each heading that helps to describe the type of cost involved. There may be X’s under several column headings for a single cost. (For example, a cost may be a fixed cost, a period cost, and a sunk cost; you would place an X under each of these column headings opposite the cost.) View less » Dec 07 2015 05:40 PM
