Stampout Plastics Produces Different Kinds of Products,all in One Manufacturing

question 176

Essay

Stampout 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:
$$\begin{array} { l l l } \text { Materials management } & \$ 12.00 & \text { Per purchape order } \\\text { Chemical processing } & \$ 7.50 & \text { Per metric ton } \\\text { Molding } & \$ 24.00 & \text { Per direct labor hour } \\\text { Parkaging } & \$ 0.10 & \text { Per unit }\end{array}$$ Engineering design shows that the order will require direct materials that cost $540; direct labor cost will be $90.The order will also require four purchase orders to be placed,use two metric tons of chemical base,and need eight direct labor hours.The size of the order is to produce 3,000 units of product.Calculate the total production of the order.

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Definitions:

Deadweight Loss

It refers to the loss of economic efficiency when the equilibrium outcome is not achievable or is not achieved.

Monopoly

A market condition where a single firm has exclusive control over a product or service, allowing it to limit competition and set prices.

Total Cost

The sum of all costs incurred by a firm in the production of goods or services, including fixed and variable costs.

Total Revenue

The total income generated from the sale of goods or services before any expenses are subtracted.