Springfield Manufacturing Produces Electronic Storage Devices,and Uses the Following Three-Part

question 60

Essay

Springfield Manufacturing produces electronic storage devices,and uses the following three-part classification for its manufacturing costs: direct materials,direct manufacturing labour,and indirect manufacturing costs.Total indirect manufacturing costs for January were $300 million,and were allocated to each product on the basis of direct manufacturing labour costs of each line.Summary data for January for the most popular electronic storage device,the Big Bertha,was:

Required:
a.Compute the total manufacturing cost per unit for each product produced in January.
b.Suppose production will be reduced to 30,000 units in February.If indirect manufacturing costs include fixed costs then explain if the total cost per unit be higher or lower than in January.

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Definitions:

Assumes Risk

The act of knowingly exposing oneself to danger or harm, often in contexts where one voluntarily takes on a risk that is inherent to an activity.

Risk-Contemplated

A term related to considering or evaluating potential risks in decision-making or planning.

Comparative Negligence

A theory in tort law under which the liability for injuries resulting from negligent acts is shared by all parties who were negligent (including the injured party) on the basis of each person’s proportionate negligence.

Alleging Negligence

The act of accusing someone of failing to take proper care in doing something, leading to damage or injury.