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Per Sweater Selling price Cost to manufacture: 26.00 Raw materials: buttons, thread, lining $ 2.00 $ 12.00 $ 14.00 Wool yarn Total raw materials Direct labor Fixed Mfg. Overhead 6.20 $ 9.30 $ 29.50 Mfg. profit (loss) (3.50) Per Spindle of Yarn Selling price Cost to manufacture: Raw materials (wool) Direct labor Fixed Mfg. Overhead Mfg. profit (loss) 16.00 $ 6.00 $ 2.40 $ 3.60 $ 12.00 4.00 Mfg. OH is assigned to products based on 150% of direct labor cost. Materials and direct labor costs are variable. %24

Per Sweater Selling price Cost to manufacture: 26.00 Raw materials: buttons, thread, lining $ 2.00 $ 12.00 $ 14.00 Wool yarn Total raw materials Direct labor Fixed Mfg. Overhead 6.20 $ 9.30 $ 29.50 Mfg. profit (loss) (3.50) Per Spindle of Yarn Selling price Cost to manufacture: Raw materials (wool) Direct labor Fixed Mfg. Overhead Mfg. profit (loss) 16.00 $ 6.00 $ 2.40 $ 3.60 $ 12.00 4.00 Mfg. OH is assigned to products based on 150% of direct labor cost. Materials and direct labor costs are variable. %24

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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What is the financial advantage (in dollars) for processing one spindle of yarn into a sweater?  Here are the details I have together so far:

 

Per Sweater Selling price 26.00 Cost to manufacture: Raw materials: buttons, thread, lining 2.00 $ 12.00 $ 14.00 Wool yarn Total raw materials Direct labor Fixed Mfg. Overhead 6.20 9.30 $ 29.50 Mfg. profit (loss) $ (3.50) Per Spindle of Yarn Selling price 16.00 Cost to manufacture: Raw materials (wool) Direct labor Fixed Mfg. Overhead Mfg. profit (loss) 6.00 2.40 3.60 $ 12.00 4.00 Mfg. OH is assigned to products based on 150% of direct labor cost. Materials and direct labor costs are variable. %24 %24 %24 SSS S %24
Transcribed Image Text:Per Sweater Selling price 26.00 Cost to manufacture: Raw materials: buttons, thread, lining 2.00 $ 12.00 $ 14.00 Wool yarn Total raw materials Direct labor Fixed Mfg. Overhead 6.20 9.30 $ 29.50 Mfg. profit (loss) $ (3.50) Per Spindle of Yarn Selling price 16.00 Cost to manufacture: Raw materials (wool) Direct labor Fixed Mfg. Overhead Mfg. profit (loss) 6.00 2.40 3.60 $ 12.00 4.00 Mfg. OH is assigned to products based on 150% of direct labor cost. Materials and direct labor costs are variable. %24 %24 %24 SSS S %24
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