Wallace's Wrench Company Manufactures Socket Wrenches

question 145

Essay

Wallace's Wrench Company manufactures socket wrenches.
∙ For next month,the vice CEO of production plans on producing 4400 wrenches per day.
∙ The company can produce as many as 5000 wrenches per day,but is more likely to produce 4500 per day.
∙ The demand for wrenches for the next three years is expected to average 4250 wrenches per day.
∙ Fixed manufacturing costs per month total $336 600.
∙ The company works 20 days a month.
∙ Fixed manufacturing overhead is charged on a per-wrench basis.
Required:
a.What is the theoretical fixed manufacturing overhead rate per wrench?
b.What is the practical fixed manufacturing overhead rate per wrench?
c.What is the normal fixed manufacturing overhead rate per wrench?
d.What is the budgeted fixed manufacturing overhead rate per wrench?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

---

Definitions:

Concept Testing

The process of evaluating consumer response to an idea before introducing a product or service to the market, to ascertain its potential success.

Visual Models

Diagrams or representations used to illustrate complex information or processes, facilitating easier understanding and analysis.

Potential Product

The concept of what a product could become or the highest value that a product can deliver to a consumer, incorporating all possible augmentations and transformations the product might undergo.

Idea Generation

The creative process of generating, developing, and communicating new ideas, where an idea is understood as a basic element of thought that can be tangible or intangible.