Use the Following Information for Problems -If a Rebuilt Oil Pump Costs $28

question 3

Short Answer

Use the following information for problems .

An oil burner needs repair. The technician replaces the parts listed:
$\begin{array}{ll} \text {a. 1 gun nozzle } &\$ 9.85 \\\text {b. 20 feet of 3/8-inch copper fuel line. } &\$ 0.82 \text { per foot } \\\text {c. 1 fuel filter } & \$ 7.45 \\\text {d. 1 new oil pump} & \$ 54.70 \\\text {e. 2 pair oil gun electrodes} &\$ 2.60 \text { for each pair } \\\text {f. Labor (4 1/2 hours)} & \$ 13.50 \text { per hour }\end{array}$
-If a rebuilt oil pump costs $28.50 and takes 2 hours to install. What is the cost of parts and labor if the rebuilt pump is used?

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Definitions:

Manufacturing Overhead

All indirect costs related to manufacturing that cannot be directly traced to specific items produced, such as factory rent, utilities, and equipment depreciation.

Variable Costing

An accounting approach that only considers variable costs—costs that change with the level of output—in product costing and decision-making.

Absorption Costing

A financial technique that encompasses all costs associated with manufacturing (including both fixed and variable expenses) in the pricing of a product.

Contribution Format

A layout for income statements where costs are classified as variable or fixed to show the contribution margin and net operating income.