Engines Corp

question 17

Essay

Engines Corp. builds two different types of motors. Model A has averaged 120,000 units annually, and Model B has average 230,000 units annually. The firm has historically used 80,000 direct labor hours and 210,000 hours of machine time per year to build Model A. Also, 250,000 annual direct labor hours have been allocated to Model B, along with 60,000 hours of annual machine time. Calculate the four relevant CPOPF planning factors.

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Definitions:

Production Report

A document detailing the quantity and type of products manufactured within a specific period, including details on efficiency and usage of resources.

First-In, First-Out Method

An inventory valuation method that assumes goods are sold in the order they are acquired, with the oldest items sold first.

Equivalent Units

A concept in cost accounting used to allocate costs to partially completed units of production, making them comparable to fully completed units.

Conversion Costs

The sum of direct labor costs and manufacturing overhead costs incurred to convert raw materials into finished goods.