Question

Using the firm's volume- based costing, applied factory overhead per unit for the Great P model is (rounded to the nearest cent): $65.43. $45.99. $61.32. $54.04. $43.42.

Answer 1

The applied factory overhead per unit for the Great P model cannot be determined based solely on the given information. We need to know the output level of the firm to calculate the cost per unit using volume-based costing.

Step-by-step explanation:

In this case, we can use the concept of economies of scale to determine the applied factory overhead per unit for the Great P model. Economies of scale refer to the reduction in average cost of production as the quantity of output increases. From the given information, we can see that the average cost of production decreases as the output level increases for the small-sized factory (S), medium-sized factory (M), and large factory (L).

Therefore, the applied factory overhead per unit for the Great P model cannot be determined based solely on the given information. We need to know the output level of the firm to calculate the cost per unit using volume-based costing.

Answer 2

$45.99

Step-by-step explanation:

Calculation for the applied factory overhead per unit for the Great P model

First step is to Calculate the total direct labour cost of High F and Great P

High F $175,200

($10,000*$17.52)

Great P $210,240

($16,000*$13.14)

Total direct labour cost $385,440

Second step is to calculate the factory overhead rate

Using this formula

Factory overhead rate=Budgeted factory Overhead cost/Allocation base

Let plug in the formula

Factory overhead rate=$1,349,040/$385,440

Factory overhead rate=350%

Now let calculate factory overhead per unit for the Great P

Direct labor cost per unit of product Great P $13.14

Great P Factory overhead per unit =$13.14*350%

Great P Factory overhead per unit =$45.99

Therefore Using the firm's volume- based costing, applied factory overhead per unit for the Great P model is $45.99