Cost 5250000

1 2
Sq Foot 30,000 40,000
Total allocation 2250000 3000000

Direct Labour hours 40000 30000

Total allocation 3000000 2250000

Question 5

HR Number of employees
Duplicating Number of employees Number of Copies
Janitorial Sq Foot Floor Space
Accounting Number of transactions
Graphic Design Product line Count Time spent on design work
Food Services Number of employees
 T1 T2 T3 T4 T5
Number of test 3500 52000 72000 80000 92000
Number of runs 350 520 720 800 920
Price per test 35 26 22 21 20
Less
Material Cost 12 10.5 7.5 7.35 5.85
18 Direct labour 1.5 1 1.1 1.1 1.1
Overhead 38.0561 10.6181 11.0714 11.0714 11.0714
Total Cost 51.5561 22.1181 19.6714 19.5214 18.0214
Profit per test -16.5561 3.8819 2.3286 1.4786 1.9786
Total Profit -57946.3676 201856.3970 167659.6635 118288.5149 182031.7922
Total Overhead 133196.3676 552143.6030 797140.3365 885711.4851 1018568.2078
Total Labour 5250 52000 79200 88000 101200
Total Cost 180446.3676 1150143.603 1416340.3365 1561711.485 1657968.2078
Setupcost 27.9686 2.796858006 2.796858006 2.796858006 2.796858006
Equipment 6.7987 4.532473515 4.985720866 4.985720866 4.985720866
Rent 1.3022 1.302170284 1.3021702838 1.302170284 1.3021702838
Billing 0.7846 0.784641068 0.7846410684 0.784641068 0.7846410684
Clerical 0.5342 0.534223706 0.5342237062 0.534223706 0.5342237062
Other 0.6678 0.667779633 0.6677796327 0.667779633 0.6677796327

2.796858006
12.8844
26.3844

As long as the price is >=32 the price can be decreased

 Cost per unit Allocation Base
Company Setupcost 925760 279.6858 Number of Runs
299500 Equipment 1476000 4.5325 Total Labour
3310 Rent 390000 1.3022 Number of test
Billing 235000 0.7846 Number of test
Clerical 160000 0.5342 Number of test
Other 200000 0.6678 Number of test

611890.0000 Profit percentage With reduction

3386760 0.1026 T1 Company
325650 Number of test 1750
5966610 Numer of runs 350
Less Setupcost 55.93716
Material Cost 12
Direct labour 1.5
Overhead 66.0247
Total Cost 79.5246851
Profit per test -44.5246851
Total Profit -77918.1989 669836.3676 591918.17
Total Overhead 115543.199
Total Labout 5250
Total Cost 139168.199 5786163.63242 5925332

-0.265616
Profit percentage

0.0999

0.0027