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Apple Nigeria limited deals with the production of apple. The material used to produce 1 unit of apple is 5units of sugar. It is the company policy to pay labourers on the basis of January and February which is $25 and $35 respectively and the output produced for that two months is 500,700 respectively. The employees spent 7 hours to produce 1 unit. The fixed overhead cost is $12 and the variable overhead cost is 20% cost plus variable material?
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Apple Nigeria limited deals with the production of apple. The material...
Production Analysis at Apple Nigeria Limited


Material and Labor Costs

Apple Nigeria Limited is a company that deals with the production of apple. The material used to produce 1 unit of apple is 5 units of sugar. This means that for every unit of apple produced, the company requires 5 units of sugar as the main material.


Regarding labor costs, the company follows a policy of paying its laborers based on the months of January and February. In January, the laborers are paid $25, while in February, the payment is increased to $35. The output produced by the laborers for these two months is 500 and 700 units respectively.


Time and Overhead Costs

The laborers spend 7 hours to produce 1 unit of apple. This means that it takes considerable time and effort to produce each unit of the product.


Additionally, the company incurs fixed and variable overhead costs. The fixed overhead cost is $12, which is a constant cost that the company has to bear regardless of the level of production. On the other hand, the variable overhead cost is calculated as 20% of the total cost, including the variable material cost.


Calculation of Variable Material Cost

To calculate the variable material cost, we need to know the cost of 1 unit of sugar. Let's assume the cost of 1 unit of sugar is $2. Therefore, the cost of 5 units of sugar required to produce 1 unit of apple would be 5 * $2 = $10.


Calculation of Total Cost

Now, let's calculate the total cost of production for each month:


January

Number of units produced: 500

Variable material cost per unit: $10

Labor cost per unit: $25

Total cost per unit: Variable material cost + Labor cost = $10 + $25 = $35

Overhead cost per unit: Fixed overhead cost + Variable overhead cost = $12 + 20% * $35 = $12 + $7 = $19

Total cost per unit (including overhead): $35 + $19 = $54

Total cost for January: 500 * $54 = $27,000


February

Number of units produced: 700

Variable material cost per unit: $10

Labor cost per unit: $35

Total cost per unit: Variable material cost + Labor cost = $10 + $35 = $45

Overhead cost per unit: Fixed overhead cost + Variable overhead cost = $12 + 20% * $45 = $12 + $9 = $21

Total cost per unit (including overhead): $45 + $21 = $66

Total cost for February: 700 * $66 = $46,200


Conclusion

Based on the provided information, the production analysis at Apple Nigeria Limited reveals the following:


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Direction: Read the following text and answer the following questions on the basis of the same: Amisha did her MBA from IIM Bangalore and decided to begin her own company. Now she is the proprietor of ABC Foods Pvt. Ltd. which is into the production of packaged foods and beverages. She has started on a small-scale but decided that there will be separate departments for finance, marketing, production and sales in her company so that later on when the scale of operations increases, the functions and processes are streamlined. She has plans for expansion over the next 5 years but plans to limit the major decision making powers to herself as she is yet to build a strong and reliable team. She has also worked out a fair and reasonable structure for the overall pay and compensation to be paid to the employees on the basis of a combination of various methods. She also wants to ensure that her employees stay with the company for longer durations so that the funds invested in their training do not go waste. Thus, she has taken some measures to minimize employee turnover. “…she has taken some measures to minimize employee turnover.”

Direction: Read the following text and answer the following questions on the basis of the same:Amisha did her MBA from IIM Bangalore and decided to begin her own company. Now she is the proprietor of ABC Foods Pvt. Ltd. which is into the production of packaged foods and beverages. She has started on a small-scale but decided that there will be separate departments for finance, marketing, production and sales in her company so that later on when the scale of operations increases, the functions and processes are streamlined. She has plans for expansion over the next 5 years but plans to limit the major decision making powers to herself as she is yet to build a strong and reliable team. She has also worked out a fair and reasonable structure for the overall pay and compensation to be paid to the employees on the basis of a combination of various methods. She also wants to ensure that her employees stay with the company for longer durations so that the funds invested in their training do not go waste. Thus, she has taken some measures to minimize employee turnover.“…fair and reasonable structure for the overall pay and compensation to be paid to the employees…”

Direction: Read the following text and answer the following questions on the basis of the same:Amisha did her MBA from IIM Bangalore and decided to begin her own company. Now she is the proprietor of ABC Foods Pvt. Ltd. which is into the production of packaged foods and beverages. She has started on a small-scale but decided that there will be separate departments for finance, marketing, production and sales in her company so that later on when the scale of operations increases, the functions and processes are streamlined. She has plans for expansion over the next 5 years but plans to limit the major decision making powers to herself as she is yet to build a strong and reliable team. She has also worked out a fair and reasonable structure for the overall pay and compensation to be paid to the employees on the basis of a combination of various methods. She also wants to ensure that her employees stay with the company for longer durations so that the funds invested in their training do not go waste. Thus, she has taken some measures to minimize employee turnover.‘‘…there will be separate departments for finance, marketing, production and sales…”

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Apple Nigeria limited deals with the production of apple. The material used to produce 1 unit of apple is 5units of sugar. It is the company policy to pay labourers on the basis of January and February which is $25 and $35 respectively and the output produced for that two months is 500,700 respectively. The employees spent 7 hours to produce 1 unit. The fixed overhead cost is $12 and the variable overhead cost is 20% cost plus variable material?
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