Nexus Star Inc

question 2

Essay

Nexus Star Inc.produces various kinds of oils.One of its product,Product X,is made from castor oil,beeswax,aloe vera,and a base compound.
For the next 12 months,the company's purchasing agent believes that the cost of ingredients will be as follows:

The direct labor time standard is 3.50 hours per unit at a standard direct labor rate of $12.00 per hour.The standard overhead rates are $15.00 per direct labor hour for the standard variable overhead rate and $13.00 per direct labor hour for the standard fixed overhead rate.
a.Using these production standards,compute the standard unit cost of direct materials per unit if it takes 0.50 gallon of castor oil,1 pound of beeswax,0.25 gallon of aloe vera,and 1 gallon of base compound to produce one unit of product X.Round values to two decimal places.
b.Using the standard unit cost of direct materials per case determined in (a)and the production standards given for direct labor and overhead,compute the standard unit cost of one unit of product X.

Understand the concept and implications of the production possibility frontier (PPF) and its shape.

Recognize the effects of economic decisions and external factors on the production possibility frontier.

Identify and explain the factors contributing to economic growth and their impact on the PPF.

Differentiate between capital goods and consumer goods and their implications for an economy’s future.

---

Definitions:

Federal Government

The national government of a federal country, where powers are divided between the central authority and constituent political units.

Provoking War

The act or strategy of taking actions or making statements that are likely to lead to war.

Jefferson Davis

The President of the Confederate States of America during the American Civil War from 1861 to 1865.

Centralization

The concentration of administrative power and decision-making authority in a central location or governing body.