Cost Analysis and Break-Even Insights for Manufacturing Pumps
School
Higher Technological Institute**We aren't endorsed by this school
Course
ENGINEERIN MNG101
Subject
Industrial Engineering
Date
Dec 12, 2024
Pages
1
Uploaded by CorporalSeaLionMaster1196
Subject: Cost Concepts and Break-Even Analvsis [1] A manufacturing company produces 500 pumps. The percent markup is 25%. All other relevant cost information is provided in the following table. Compute the production cost and selling price per pump based on this data. Item Description Amount ($) Cost of raw material 3,500,000 Direct labor cost 1,200,000 Direct expenses 100,000 Salaries paid to plant manager and staff 300,000 Plant utilities 25,000 Plant and equipment depreciation 65,000 Warchouse expenses 25,000 Office utilities 3750 Office depreciation 7500 Salary paid to plant engineer 15,000 Engineering expenses incurred on the plant 6500 Administrative staff salaries 35,000 Sales staff salaries and commissions 27,500 Percent markup 25% Number of pumps manufactured 500 |2] The market price of a pump is $5000 and the discount allowed to the distributor is 20% of the market price. It is found that the selling expenses cost 1s Yth the factory cost and if the material cost, labor cost, and factory overhead charges are in the ratio of 1:4:2; what profit is made by the factory on each pump, if material cost is $400? Neglect other overheads. [3] The catalogue price of a motor driven sewing machine is $1,200 and allowable discount to distributor is 15 percent. Manufacturer’s data at a certain time, shows that sum of administrative and selling expenses, and factory cost are in the ratio 1:1 and the materiel cost, labor cost and factory overheads are in the ratio 1:3:2. If the cost of labor on the manufacture of the machine is $240, determine the profit realized on each sewing machine. [4] An automobile company has extra capacity that can be used to produce gears that the company has been buying for $300 each. If the company makes gears, it will incur materials cost of $90 per unit, labor costs of $120 per unit, and variable overhead costs
