Chip Company produces three products, Kin, Ike, and Bix. Each product uses the same direct material. Kin uses 3.4pounds of the material, Ike uses 2.3 pounds of the material, and Bix uses 5.8 pounds of the material. Selling priceper unit and variable costs per unit of each product follow.Selling price per unitVariable costs per unitKin$ 157.02105.00Ike$ 105.1684.00Вix$ 219.18149.00(a) Compute contribution margin per pound of material for each product. (b) If demand is limited, list the threeproducts in the order in which management should produce and meet demand.Product Contribution MarginKinIkeBixContribution margin per poundOrder in which management should produce and meet demand:

Contribution Margin per Limited resource Contribution margin per unit of limited resource is…

Answered: a) Compute contribution margin per…

a) Compute contribution margin per pound of material for each product. (b) If demand is limited, list the three products in the order in which management should produce and meet demand.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Which of the following would be included in the cost of a product manufactured according to variable…

A: Variable costing: Variable costing is a method that considers only the variable cost and ignores all…

Q: The relevant range of activity costing is: Select one: O a. Is the cost that causes change in total…

A: Under activity costing, indirect costs or overhead are allocated to products or jobs on the basis of…

Q: 1.An activity that has a direct cause-effect relationship with the resources consumed is a(n) Group…

A: In activity based costing the cost are apportioned based on the respective cost drivers

Q: When materials and supplies are used in a product that will be sold to customers, the usage of the…

A: The answer for the multiple choice question and relevant explanation are presented hereunder :…

Q: In an activity-based costing system, the first step in assigning costs is to • A. separate…

A: Activity-based costing is the method of allocating/assigning the indirect cost to various products…

Q: Fixed costs depend on the: Select one: a. amount of resources acquired b. amount of resources used…

A: Since you have posted multiple questions, we will do the first one for you. Please post the other…

Q: The three guidelines for refinement include: OA. 1. Classify as many of the total costs as direct…

A: D. 1. Select the activities and cost-allocation bases to use for allocating indirect costs to the…

Q: Which of the following statements is (are) true? (A) A price standard is the price that should be…

A: Standard costing refers to the method of costing used for the computation of expenses in the process…

Q: a predetermined application rate for conversion costs is based on actual conversion costs divided by…

A: Conversion costs are costs that are incurred for converting raw materials of the business into…

Q: The internal cost analysis process involves the following in what order? (A) Identify the links…

A: Internal cost analysis used for analysing value creating process and opportunity to reduce its cost…

Q: Which of the following costs change in total directly and proportionately with respect to the…

A: The objective of the question is to identify the type of cost that changes in total directly and…

Q: When output volume increases, do fixed costs per unit increase, decrease, or stay the same within…

A: Fixed Costs: These are the costs that remain constant in total dollar amount irrespective to the…

Q: Please explain the statement below (T/F) thoroughly with examples illustrating the answer. "To…

A: "Activity-based costing is one of the costing methods that is structured and designed in such a way…

Q: Product costing is the process of: A. accumulating the costs of a production process. B. assigning…

A: Cost accounting is a form under the various available systems of accounting including financial…

Q: On a CVP graph, the intersection of the sales revenue line and the total cost line is known as the:…

A: CVP stands for Cost-Volume-Profit analysis. It is helpful in determining the change in the total…

Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

Chip Company produces three products, Kin, Ike, and Bix. Each product uses the same direct material. Kin uses 3.4
pounds of the material, Ike uses 2.3 pounds of the material, and Bix uses 5.8 pounds of the material. Selling price
per unit and variable costs per unit of each product follow.
Selling price per unit
Variable costs per unit
Kin
$ 157.02
105.00
Ike
$ 105.16
84.00
Вix
$ 219.18
149.00
(a) Compute contribution margin per pound of material for each product. (b) If demand is limited, list the three
products in the order in which management should produce and meet demand.
Product Contribution Margin
Kin
Ike
Bix
Contribution margin per pound
Order in which management should produce and meet demand:

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Explanation

VIEW

Answer

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Atlanta Systems produces two different products, Product A, which sells for $450 per unit, and Product B, which sells for $800 per unit, using three different activities: Design, which uses Engineering Hours as an activity driver; Machining, which uses machine hours as an activity driver; and Inspection, which uses number of batches as an activity driver. The cost of each activity and usage of the activity drivers are as follows: Usage by Product A Usage by Product B Cost Design (Engineering Hours) Machining (Machine Hours) Inspection (Batches) $ 190,000 $1,800,000 $ 108 142 2,160 2,840 160,000 42 38 8 Atlanta manufactures 12,500 units of Product A and 10,200 units of Product B per month. Each unit of Product A uses $100 of direct materials and $45 of direct labor, while each unit of Product B uşes $140 of direct materials and $75 of direct labor.
Which cost accounting method assumes that the cost of production is driven by the number of units produced? A. Activity-Based Costing (ABC)B. Standard CostingC. Absorption CostingD. Variable Costing
Which cost accounting method assumes that the cost of production is driven by the number of units produced? A. Activity-Based Costing (ABC)B. Standard CostingC. Absorption CostingD. Variable Costing
True or 2. Reasons for using standard costing include: A) Comparing projected costs against actual costs B) Planning and budgeting purposes C) Setting prices in advance D) Identifying specific areas for process improvement E) All of the above
Based on below, Activity-Based Costing and Analysis Cost Behavior and Cost-Volume-Profit Analysis Provide a hypothetical example of multiproduct break even analysis. (Need Excel Chart)
• The unit cost… a. is the total conversion costs divided by the number of units produced. b. is the total product costs divided by the number of units produced. c. product plus period cost d. is the total prime costs divided by the number of units produced. e. includes period costs.
Define target full product cost.
Discuss the difference between cost accumulation, tracing and allocation. Since all manufacturing cost are eventually included in the unit cost of a product, what difference does it make? Discuss why the distinction matter in the calculation of CVP or other metrics.
The direct costs of materials that change with the number of units produced is an example of a fixed production cost. True or false
Please define THREE of the following terms and provide an example of each one you have selected: • Conversion Costs• Direct Costs• Direct Labor Cost• Direct Materials Cost• Factory Overhead Cost• Indirect Costs• Period Costs• Prime Costs• Product Costs
In a two-stage activity-based costing model, stage one involves Select one: O O A. assigning activity costs to cost objects. B. assigning indirect resource costs to activity pools. C. measuring the various indirect resource costs and determining resource drivers. D. assigning direct costs to cost objects.
Which of the following statements is FALSE? a. There is a cause-and-effect relationship between the cost driver and the amount of cost. b. Over the long run all costs have cost drivers. c. Volume of production is a cost driver of direct manufacturing costs. d. Fixed costs have cost drivers over the short run.