5.10 Machine Manufacturing is involved in the production of machine parts. The company uses 500,000 pounds of steel annually. The current purchasing cost for steel is P2.20 per pound. The carrying cost for inventory is 20% of the purchase price. The cost of ordering steel is P1,000 per order. The company has decided to maintain a safety stock of 20,000 pounds. The delivery time per order is 10 days. The company works 365 days a year. to yoʻul sisesingy els mort to alledsasd evud ebno gnihoge hogaboo)

5.10 Machine Manufacturing is involved in the production of machine parts. The company uses 500,000 pounds of steel annually. The current purchasing cost for steel is P2.20 per pound. The carrying cost for inventory is 20% of the purchase price. The cost of ordering steel is P1,000 per order. The company has decided to maintain a safety stock of 20,000 pounds. The delivery time per order is 10 days. The company works 365 days a year. to yoʻul sisesingy els mort to alledsasd evud ebno gnihoge hogaboo)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A company uses components at the rate of 15,000 units per year, whichare bought in at a cost of $3.90 each from the supplier. The companyorders 8,000 units each time it places an order and the averageinventory held is 500 units. It costs $30 each time to place an order,regardless of the quantity ordered.The total holding cost is 21% per annum of the average inventory held.Required:-Calculate the total holding cost and total ordering cost?
Red Jeep Manufacturing currently produces 3,000 tires per month. The following total cost data for 3,000 tires applies to sales to regular customers: Direct materials Direct manufacturing labor Variable manufacturing overhead Fixed manufacturing overhead Total $114,000 42,000 57,000 60,000 $273,000 Assume Red Jeep sells everything it produces. The plant is considering expanding production to 4,000 tires. What is the total cost of producing 4,000 tires? O $364,000 $202,000 $273,000 $344,000
Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the ball is manufactured In a small plant that relies heavily on direct labor workers. Thus, varlable expenses are high, totaling $15.000 per ball, of which 60% Is direct labor cost Last year, the company sold 62.000 of these balls, with the following results: $ 1,558, 000 930, e00 Sales (62,889 balls) Variable expenses Contribution margin Fixed expenses 620,e00 426,000 $ 194, 000 Net operating income Required: 1. Compute (a) last year's CM ratio and the break-even polnt in balls, and (b) the degree of operating leverage at last year's sales level. 2 Due to an Increase in labor rates, the company estimates that next year's varlable expenses will increase by $3.00 per ball. If this change takes place and the selling price per ball remalns constant at $25.00, what will be next year's CM ratio and the break-even polnt in balls? 3. Refer to the data in (2) above. If the expected change in…
Subject:- Account
Sheridan Inc. has been manufacturing its own shades for its table lamps. The company is currently operating at 100% of capacity, and variable manufacturing overhead is charged to production at the rate of 50% of direct labour costs. The direct materials and direct labour costs per unit to make the lampshades are $4.50 and $5.50, respectively. Normal production is 48,000 table lamps per year. A supplier offers to make the lampshades at a price of $13.20 per unit. If Sheridan Inc. accepts the supplier's offer, all variable manufacturing costs will be eliminated, but the $40,000 of fixed manufacturing overhead currently being charged to the lampshades will have to be absorbed by other products. Prepare the incremental analysis for the decision to make or buy the lampshades. (Round answers to O decimal places, e.g. 5,275. If an amount reduces the net income then enter with a negative sign preceding the number e.g. -15,000 or parenthesis, e.g. (15,000). While alternate approaches are…
Gustavo Fring approached Walt & Jessie Pharmaceutical Co. to buy 50 pounds of product for $50,000 a pound. Regular customers are charged $84,000 for a pound of product. Walt and Jessie Pharmaceutical Co. has the capacity to make 1000 pounds of product per month. The following costs are associated with the company's normal monthly production of the sale of 970 pounds of product: Direct Material per Pound of Product $9,000 Direct Labor per Pound of Product $2,000 Variable MOH per Pound of Product $3,000 Fixed MOH per Pound of Product $3,000 What is the minimum price Walt and Jessie Pharmaceutical Co. would be willing to accept per pound of product for the order? Round your answer to the nearest dollar. Hint: You can solve this problem using the formula for minimum transfer price. Transfer price >= incremental variable costs per unit + (Sacrificed regular contribution margin/ # units transferred) Minimum price = incremental variable costs per unit + ((# units…
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