Accounting Assignment | Custom Assignment Help
October 4th, 2019
ABC Corporation is capable of producing 7,500 widgets per year, assuming no downtime. When factoring in downtime, ABC is capable of producing 5,000 widgets per year. ABC expects short term demand (over the next quarter) to be 750 widgets and long-term demand (over the next 1 year) to be 4,000 widgets. Each widget requires 5 pounds of materials at $7.50 per pound and 2 hours of labor at $22 per hour. The overhead rate is 50% of direct labor dollars. Calculate the dollar amount of direct materials to be used, direct labor to be used and the standard cost of 1 widget under each operating capacity.