Accepting Business at a Special Price Power Serve Company expects to operate at 90% of productive capacity during May. The total manufacturing costs for May for the production of 35,100 batteries are budgeted as follows: Direct materials $334,200 Direct labor 122,900 Variable factory overhead 34,300 Fixed factory overhead 69,000 Total manufacturing costs $560,400 The cor any has an opportunity to submit a bid for 2,000 batteries to be delivered by May 31 to a government agency. If the contract is obtained, it is anticipated that the additional activity will not interfere with normal production during May or increase the selling or administrative expenses. What is the unit cost below which Power Serve Company should not go in bidding on the government contract? Round your answer to two decimal places. per unit

Accepting Business at a Special Price Power Serve Company expects to operate at 90% of productive capacity during May. The total manufacturing costs for May for the production of 35,100 batteries are budgeted as follows: Direct materials $334,200 Direct labor 122,900 Variable factory overhead 34,300 Fixed factory overhead 69,000 Total manufacturing costs $560,400 The cor any has an opportunity to submit a bid for 2,000 batteries to be delivered by May 31 to a government agency. If the contract is obtained, it is anticipated that the additional activity will not interfere with normal production during May or increase the selling or administrative expenses. What is the unit cost below which Power Serve Company should not go in bidding on the government contract? Round your answer to two decimal places. per unit

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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Classic Loungers is in the process of preparing a production cost budget for August. Actual costs in July for 400 chaise lounge chairs were: Materials cost $ 6,000 Labor cost 8,000 Rent 2,000 Depreciation 4,000 Other fixed costs 5,000 Total $ 25,000 Material cost and Labor cost are considered variable. Each chair was sold for $160 in July. Management estimates that sales will increase to 440 chairs during August if the company lowers the selling price to $150 per chair. What is the incremental profit (loss) associated with the price reduction? $(200) $(2,200) $2,100 $800 $600
BOBA budgeted sales of 400,000 calculators at P40 for 2021. Variable manufacturing costs were budgeted at P16 per unit, and fixed manufacturing costs at P10 per unit. A special order offering to buy 40,000 calculators for P23 each was received by BOBA in October 2021. Boba has sufficient plant capacity to manufacture the additional quantity; however, the production would have to be done on an overtime basis at an estimated additional cost of P3 per calculator. Acceptance of the special order will not affect Boba's normal sales and no selling expenses would be incurred. What would be the effect on operating profit (loss) if the special order were accepted?
NUBD Co. budgeted sales of 400,000 calculators at P40 for 2021. Variable manufacturing costs were budgeted at P16 per unit, and fixed manufacturing costs at P10 per unit. A special order offering to buy 40,000 calculators for P23 each was received by NUBD Co. in October 2021. NUBD Co. has sufficient plant capacity to manufacture the additional quantity; however, the production would have to be done on an overtime basis at an estimated additional cost of P3 per calculator. Acceptance of the special order will not affect NUBD’s normal sales and no selling expenses would be incurred. What would be the effect on operating profit (loss) if the special order were accepted?
Bowshar Hills Company sells shoes and expects to produce and sell 50,000 units during the year 2022 with no beginning or ending inventories as it plans to produce what it can sell during the same year. The total budgeted fixed manufacturing overhead cost for the year is $50,000. The company accounts show that the budgeted direct material cost is $4 per unit, budgeted direct labor cost is $6 per direct labor hour, and budgeted variable manufacturing overhead is $2 per direct labor hour. Each unit produced takes 2 hours of skilled labor time. The cost of goods sold :reported in the budgeted income statement for 2022 is None of the given answers a O $1.050,000 b O $650,000 .c O $450,000 .dO $850,000 .e O
SIS Technologies currently allocates insurance costs on the basis of direct labor hours. If the direct labor hours for departments A, B, and C are expected to be 3000, 9000, and 5000, respectively, this year, determine the allocation to each department based on an indirect cost budget of $34,000.
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Company 10, a local road building contractor, had budgeted indirect costs for 2023 of $600,000. Budgeted labour hours for the year were 12,500 costing $260,000 and budgeted machine hours were 14,000. The company marks-up the total cost of each job by 40% to determine selling price. The company has just completed a road repair for the local council. The direct costs were as follows: Materials: $32,100 Labour: 305 hours Machining: 75 hours What is the total selling price of this job assuming the company allocates overheads on: A labour hour basis? A machine hour basis? (1) (ii) A B C D (1) Labour hour basis $53,084 $74,318 $65,436 $20,496 (ii)Machine hour basis $41,659 $58,323 $49,441 $4,521
Eliot Sprinkler Systems produces equipment for lawn irrigation. One of the parts used in selected Eliot equipment is a specialty nozzle. The budgeting team is now determining the purchase requirements and monthly cash disbursements for this part. Eliot wishes to have in stock enough nozzles to use for the coming month. On August 1, the company has 16,800 nozzles in stock, although the latest estimate for August production indicates a requirement for only 15,000 nozzles. Total uses of the nozzle are expected to be 14,700 in September and 15,540 in October. Nozzles are purchased at a wholesale price of $8. Eliot pays 25 percent of the purchase price in cash in the month when the parts are delivered. The remaining 75 percent is paid in the following month. Eliot purchased 21,000 parts in July. Required: a. Estimate purchases of the nozzle (in units) for August and September. b. Estimate the cash disbursements for nozzles in August and September.
Accepting Business at a Special Price Forever Ready Company expects to operate at 90% of productive capacity during July. The total manufacturing costs for July for the production of 37,800 batteries are budgeted as follows: Direct materials $413,800 152,100 Direct labor Variable factory overhead 42,680 Fixed factory overhead 85,000 Total manufacturing costs $693,580 The company has an opportunity to submit a bid for 2,000 batteries to be delivered by July 31 to a government agency. If the contract is obtained, it is anticipated that the additional activity will not interfere with normal production during July or increase the selling or administrative expenses. What is the unit cost below which Forever Ready Company should not go in bidding on the government contract? Round your answer to two decimal places. per unit
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Accepting Business at a Special Price Power Serve Company expects to operate at 82% of productive capacity during May. The total manufacturing costs for May for the production of 31,980 batteries are budgeted as follows: Direct materials Direct labor Variable factory overhead Fixed factory overhead Total manufacturing costs The company has an opportunity to submit a bid for 3,000 batteries to be delivered by May 31 to a government agency. If the contract is obtained, it is anticipated that the additional activity will not interfere with normal production during May or increase the selling or administrative expenses. $458,800 168,700 47,278 94,000 $768,778 What is the unit cost below which Power Serve Company should not go in bidding on the government contract? Round your answer to two decimal places. per unit
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