Arctic Insulation case

1979
Formed bales
Hours
Bales
430000 1075000 Per bale cost
Direct labour
4296000 4128000
3.84
Depot overhead
2878320 2765760
2.5728
Division Overhead 3522720 3384960
3.1488
Total cost per unit
9.5616
1980
Formed bales
Hours
Bales
316800 792000 Per bale cost
Direct labour
3556080 3041280
3.84
Depot overhead
2915990 2493853 3.14880475
Division Overhead 3164900 2706730 3.41758791
Total cost per unit
10.4063927
Question 1
From the exhibit 2 given by the division manager we can understand that the prices have

Question 2
from the summary tables and the exhibits we can easily understand that the cost of the pr
Question 3
As far as I know the best way to calculate is by dividing the cost based on the hours.
Question 4
It would be better to increase the number of purchased bales so that the total cost would

1979
Purchased bales Hours
Bales
17500 280000 Per bale cost
Direct labour
4296000 168000
0.6
Depot overhead
2878320 112560
0.402
Division Overhead 3522720 137760
0.492
Total cost per unit
1.494
1980
Formed bales
Hours
Bales
53625 858000 Per bale cost
Direct labour
3556080 514800
0.6
Depot overhead
2915990 422137 0.49200074
Division Overhead 3164900 458170 0.53399811
Total cost per unit
1.62599885

Total hours
Total bales

Total hours
Total bales

rstand that the prices have fallen comparitively.

stand that the cost of the products has reduced and the total cost has also reduced. Which means

st based on the hours.

so that the total cost would be reduced

447500
1355000

370425
1650000

so reduced. Which means that the company is in a better position than earlier