AMark uses 1,100 units of the component IMC2 every month to manufacture one of its products. The unit costs incurred tomanufacture the component are as follows.Direct materials$58.89Direct labor39.08Overhead126.50Total$224.47Overhead costs include variable material handling costs of $6.50, which are applied to products on the basis of direct material costs.The remainder of the overhead costs are applied on the basis of direct labor dollars and consist of 60% variable costs and 40% fixedcosts.A vendor has offered to supply the IMC2 component at a price of $250 per unit.(a)Prepare the incremental analysis for the decision to make or buy IMC2. (Round answers to 2 decimal places, e.g. 12.25. Enter negativeamounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)Make IMC2 (per unit)Buy IMC2 (per unit)Net IncomeIncrease (Decrease)

To determine whether Mark should make or buy the IMC2 component, an incremental analysis is…

Answered: A Mark uses 1,100 units of the…

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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Linger Products uses a two-stage allocation method to assign costs to its products. The following information has been provided for March: Product 1 Product 2 Total Units 3,000 2,000 5,000 Machine hours 2,000 4,000 6,000 Direct labor hours 2,000 2,000 4,000 Direct materials $ 60,000 $ 60,000 $ 120,000 Direct labor 45,000 45,000 90,000 Manufacturing overhead Utilities (machine related) $ 3,000 Supplies (labor related) 8,000 Training (labor related) 20,000 Supervision (labor related) 17,000 Machine depreciation (machine related) 24,000 Lease on factory (machine related) 33,000 Miscellaneous (labor related) 5,000 Total manufacturing overhead $ 110,000 Required:(a) Allocate the manufacturing overhead to two cost pools: machine-related and labor-related.(b)…
Integrity Company uses standard costing for each specialized product. The following information is available:Standards:Material- 3.0 feet per unit @ P42.00 per footLabor- 2.5 hours per unit @ P75.00 per hourActual:Production- 2,750 units produced during the monthMaterial- 8,700 feet used; 9,000 feet purchased @ P45.00 per footLabor- 7,000 direct labor hours @ P79.00 per hourHow much is the materials usage variance?
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Integrity Company uses standard costing for each specialized product. The following information is available: Standards: Material 3.0 feet per unit @ 42.00 per foot Labor 2.5 hours per unit @ 75.00 per hour Actual: Production 2,750 units produced during the month Material 8,700 feet used; 9,000 feet purchased @ 45.00 per foot Labor 7,000 direct labor hours @ 79.00 per hour How much is the amount of direct materials debited to Work in Process Inventory? A. 391,500 B. 405,000 C. 365,400 D. 346,500
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Saktanmokobaybeh Company uses standard costing for direct materials and direct labor. The following monthly cost functions were developed for manufacturing overhead items: Budgeted Overhead Item Cost Function: Indirect materials P 1.00 per DLHIndirect labor 1.25 per DLHUtilities 0.50 per DLHInsurance 50,000Depreciation 400,000 The cost functions were determined using observations from 20,000 to 30,000 direct labor hours. The company expects to operate at 25,000 direct labor hours per month. The theoretical capacity per month of the company is 30,000 units. Each unit requires 2 direct labor hours. The Company applies overhead using direct labor hours. Actual data for this month are as follows: Variable overhead costs P 87,000Fixed overhead costs 423,000Direct labor hours 26,000 Question 1: The entry pertaining to the volume…
Saktanmokobaybeh Company uses standard costing for direct materials and direct labor. The following monthly cost functions were developed for manufacturing overhead items: Budgeted Overhead Item Cost Function: Indirect materials 1.00 per DLH Indirect labor 1.25 per DLH Utilities 0.50 per DLH Insurance 50,000 Depreciation 400,000 The cost functions were determined using observations from 20,000 to 30,000 direct labor hours. The company expects to operate at 25,000 direct labor hours per month. The theoretical capacity per month of the company is 30,000 units. Each unit requires 2 direct labor hours. The Company applies overhead using direct labor hours. Actual data for this month are as follows: Variable overhead costs P 87,000 Fixed overhead costs 423,000 Direct labor hours 26,000 Question 1: The entry pertaining to the volume variance if the standard direct labor hours allowed for this month was 24,000 will include a debit/(credit) to manufacturing overehead amounting to? (USE…

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