Ace Plastics Produces Different Kinds of Products, All in One

question 82

Essay

Ace Plastics produces different kinds of products, all in one manufacturing facility. They have identified four activities for their costing system:
Materials management-allocated by number of purchase orders
Chemical processing-allocated on metric tons
Molding-allocated on direct labor hours
Packaging-allocated by number of units produced
The activity rates are as follows: Engineering design shows that the order will require direct material worth $540, direct labor cost being $90, require 4 purchase orders to be placed, use 2 metric tons of chemical base, need 8 direct labor hours. The size of the order is to produce 3,000 units of product. Calculate total cost of production of the order.

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Definitions:

Shares Outstanding

Refers to all of the shares of a corporation that have been issued and are held by shareholders, including those held by the public as well as restricted shares owned by the company’s insiders.

Par Value

The stated or face amount of a bond, stock, or coupon as declared by the issuer.

Common Stock

Equity securities that represent ownership in a corporation, entitling holders to vote on company matters and receive dividends.

Earnings Per Share

Earnings per share (EPS) is a financial ratio that indicates the portion of a company's profit allocated to each outstanding share of common stock, serving as an indicator of profitability.