Conan Electronics Corporation Manufactures and Assembles Electronic Motor Drives for Video

question 77

Multiple Choice

Conan Electronics Corporation manufactures and assembles electronic motor drives for video cameras.The company assembles the motor drives for several accounts.The process consists of a lean cell for each customer.The following information relates only to one customer's lean cell.For the year,planned labor and overhead was $80,000,000; materials costs,$25 per unit.Planned production included 9,600 hours to produce 76,800 motor drives.Actual production for the month of August was 5,200 units,and motor drives shipped amounted to 5,040 units.From the foregoing information,determine the budgeted cell conversion cost per hour.

• A) $8,025
• B) $800
• C) $7,200
• D) $8,333

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Definitions:

Variable Costs

Costs that change in proportion to the volume of goods or services produced.

Accounting Profit

The financial gain calculated by subtracting total expenses from total revenues, as per accepted accounting principles.

Units

Basic quantities or measurements, used as standards for expressing and comparing quantities.

Accounting Profit

The net income for a company after all expenses have been subtracted from total revenue, according to standard accounting practices.