Mr. Smith used the following information to calculate the profit coefficients for Aqua-Spas and Hydro-Luxes: pumps cost $225 each, labor costs $12 per hour, tubing costs $2 per foot. In addition to pumps, labor, and tubing, the production of Aqua-Spas and Hydro-Luxes consumes, respectively, $243 and $246 per unit in other recourses that are not in short supply. Using this information, Mr. Smith calculated the marginal profits of Aqua-Spas and Hydro-Luxes as: Aqua-Spas Hydro-Luxes Selling Price $950 $875 Pump Cost -$225 -$225 Labor Cost -$108 -$72 Tubing Cost -$24 -$32 Other Variable Costs -$24 View complete question » Mr. Smith used the following information to calculate the profit coefficients for Aqua-Spas and Hydro-Luxes: pumps cost $225 each, labor costs $12 per hour, tubing costs $2 per foot. In addition to pumps, labor, and tubing, the production of Aqua-Spas and Hydro-Luxes consumes, respectively, $243 and $246 per unit in other recourses that are not in short supply. Using this information, Mr. Smith calculated the marginal profits of Aqua-Spas and Hydro-Luxes as: Aqua-Spas Hydro-Luxes Selling Price $950 $875 Pump Cost -$225 -$225 Labor Cost -$108 -$72 Tubing Cost -$24 -$32 Other Variable Costs -$243 -$246 Marginal Profit $350 $300 Howie’s accoutant reviewed these calculations and thinks Howie made a mistake. For accounting purposes, factory overhead is assigned to products at a rate of $16 per labor hour. Howie’s accountant argues that because Aqua-Spas require nine labor hours, the profit margin on this product should be $144 less. Similarly, because Hydro-Luxes require six labor hours, the profit margin on this product should be $96 less. Who is right and why?
PLACE THIS ORDER OR A SIMILAR ORDER WITH MY ONLINE PROFESSOR TODAY AND GET AN AMAZING DISCOUNT
The post Mr. Smith used the following information to calculate the profit coefficients appeared first on MY ONLINE PROFESSOR .