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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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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 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? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about 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? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 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?.
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? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about 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? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 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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