18-2
Level of Activiti
Particulars 80%
Variable Expenses:
1 Shop supplies (0.10 per direct labor hours) 4,000
2 Indirect labor (0.45 per direct labor hours) 18,000
3 Payrol taxes &Fringe benefit (W-1) 57,240
Fixed Expenses:
1 Depreciation Expenses 9,000
2 Insurance 1,500
3 Maintenance Cost 24,000
4 Property tax 1,500
5 Supervision Staff 36,000
WORKINGS
Hours
W- 3 CALCULATION OF INSPECTION:
Hours
Hours
45,000 50,000
4,500 5,000
20,250 22,500
64,395 71,550
1,350 1,500
5,400 6,000
6,300 7,000
102,195 113,550
9,000 9,000
1,500 1,500
24,000 24,000
1,500 1,500
36,000 36,000
200 200
4,200 4,200
1,900 1,900
78,300 78,300
180,495 191,850
Cost
1,700
1,400
300
Cost
10,200
9,000
1,200
Cost
8,900
7,500
1,400
Solution of Exercise No 4
60% Level 75%Level 100% level
Units produced 2,280 2,850 3,800
Variable Cost
Utilities 28,800 32,400 36,000 39,600
Maintenance 38,400 43,200 48,000 52,800
Other Factory overhead 19,200 21,600 24,000 26,400
Indirect Labour 16,800 18,900 21,000 23,100
Fixed Cost
Maintenance 40,000 40,000 40,000 40,000
Indirect Labour 130,000 130,000 130,000 130,000
Depreciation 90,000 90,000 90,000 90,000
Variable Cost
Utilities 28,800 24,200 4,600 U
Maintenance 38,400 38,100 300 F
Other Factory overhead 19,200 8,400 10,800 U
Indirect Labour 16,800 19,600 (2,800) U
Fixed Cost
Maintenance 40,000 40,000 -
Indirect Labour 130,000 130,000 -
Depreciation 90,000 91,500 (1,500) F