Question

Cairney, Incorporated manufactures a specialized part used in internal combustion engines. The annual demand for the part is 261,000 units. The facility has a practical capacity of 276,000 units annually. The company leased the current facility because facilities capable of manufacturing the unit require machines that can produce 69,000 units each. The annual cost of the facility is $1,092,960. The variable cost of a part is $4. Required: What cost per unit should the cost system report to facilitate management decision making? The correct answer for this problem was $7.86. What is the cost of excess capacity? I have determined that 57,888 & 54,300 & 57,900 are all INCORRECT

          Cairney, Incorporated manufactures a specialized part used in internal combustion engines. The annual demand for the part is 261,000 units. The facility has a practical capacity of 276,000 units annually. The company leased the current facility because facilities capable of manufacturing the unit require machines that can produce 69,000 units each. The annual cost of the facility is $1,092,960. The variable cost of a part is $4. Required: What cost per unit should the cost system report to facilitate management decision making? The correct answer for this problem was $7.86. What is the cost of excess capacity?    I have determined that 57,888 & 54,300 & 57,900 are all INCORRECT

Added by Lisa M.

Question

Please give Ace some feedback