Alpha company makes units that each require 2 pounds of material at$3 per pound. Alpha is planning that 500 and 700 units will be built inMay and June, respectively. Alpha keeps material on hand at 20% ofthe next month's production needs. Use this information to determine:1. Raw Material Costs for May's Production2. Total Cost of May's Raw Materials Purchases

Step 1: Raw Material Costs for May's ProductionTo calculate the Raw Material Costs for May's…

Answered: Alpha company makes units that each…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 1PA: Colonels uses a traditional cost system and estimates next years overhead will be $480,000, with the...

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Similar questions

Bobcat uses a traditional cost system and estimates next years overhead will be $800.000, as driven by the estimated 25,000 direct labor hours. It manufactures three products and estimates the following costs: If the labor rate is $30 per hour, what is the per-unit cost of each product?
Box Springs. Inc., makes two sizes of box springs: queen and king. The direct material for the queen is $35 per unit and $55 is used in direct labor, while the direct material for the king is $55 per unit, and the labor cost is $70 per unit. Box Springs estimates it will make 4,300 queens and 3,000 kings in the next year. It estimates the overhead for each cost pool and cost driver activities as follows: How much does each unit cost to manufacture?
Cloud Shoes manufactures recovery sandals and is planning on producing 12.000 units in March and 11,500 in April. Each sandal requires 1.2 yards if material, which costs $3.00 per yard. The companys policy is to have enough material on hand to equal 15% of next months production needs and to maintain a finished goods inventory equal to 20% of the next months production needs. What is the budgeted cost of purchases for March?
Gent Designs requires three units of part A for every unit of Al that it produces. Currently, part A is made by Gent, with these per-unit costs in a month when 4.000 units were produced: Variable manufacturing overhead is applied at $1.00 per unit. The other $0.30 of overhead consists of allocated fixed costs. Gent will need 6,000 units of part A for the next years production. Cory Corporation has offered to supply 6,000 units of part A at a price of $7.00 per unit. It Gent accepts the offer, all of the variable costs and $1,200 of the fixed costs will be avoided. Should Gent Designs accept the offer from Cory Corporation?
Sunrise Poles manufactures hiking poles and is planning on producing 4,000 units in March and 3,700 in April. Each pole requires a half pound of material, which costs $1.20 per pound. The companys policy is to have enough material on hand to equal 10% of the next months production needs and to maintain a finished goods inventory equal to 25% of the next months production needs. What is the budgeted cost of purchases for March?
Box Springs, Inc., makes two sizes of box springs: twin and double. The direct material for the twin is $25 per unit and $40 s used in direct labor, while the direct material for the double is $40 per unit, and the labor cost is $50 per unit. Box Springs estimates it will make 5,000 twins and 9,000 doubles in the next year. It estimates the overhead for each cost pool and cost driver activities as follows: How much does each unit cost to manufacture?
Remarkable Enterprises requires four units of part A for every unit of Al that it produces. Currently, part A is made by Remarkable, with these per-unit costs in a month when 4,000 units were produced: Variable manufacturing overhead is applied at $1.60 per unit. The other $0.50 of overhead consists of allocated fixed costs. Remarkable will need 8,000 units of part A for the next years production. Altoona Corporation has offered to supply 8,000 units of part A at a price of $8.00 per unit. If Remarkable accepts the offer, all of the variable costs and $2,000 of the fixed costs will be avoided. Should Remarkable accept the offer from Altoona Corporation?
Lens & Shades sells sunglasses for $37 each and is estimating sales of 21,000 units in January and 19,000 in February. Each lens consist of 2.00 mm of plastic costing $2.50 per mm, 1.7 oz of dye costing $2.80 per ounce. and 0.50 hours direct labor at a labor rate of $18 per unit. Desired inventory levels are: Prepare a sales budget, production budget, direct materials budget for silicon and solution, and a direct labor budget.
The Calhoun Textile Mill is in the process of deciding on a production schedule. It wishes to know how to weave the various fabrics it will produce during the coming quarter. The sales department has continued orders for each of the 15 fabrics produced by Calhoun. These demands are given in the following table. Also given in this table is the variable cost for each fabric. The mill operates continuously during the quarter: 13 weeks, 7 days a week, and 24 hours a day. There are two types of looms: dobbie and regular. Dobbie looms can be used to make all fabrics and are the only looms that can weave certain fabrics, such as plaids. The rate of production for each fabric on each type of loom is also given in the table. Note that if the production rate is zero, the fabric cannot be woven on that type of loom. Also, if a fabric can be woven on each type of loom, then the production rates are equal. Calhoun has 90 regular looms and 15 dobbie looms. For this problem, assume that the time requirement to change over a loom from one fabric to another is negligible. Management would like to know how to allocate the looms to the fabrics and which fabrics to buy on the market so as to minimize the cost of meeting demand.
Krouse Company produces two products, forged putter heads and laminated putter heads, which are sold through specialty golf shops. The company is in the process of developing itsoperating budget for the coming year. Selected data regarding the companys two products areas follows: Manufacturing overhead is applied to units using direct labor hours. Variable manufacturing overhead Ls projected to be 25,000, and fixed manufacturing overhead is expected to be15,000. The estimated cost to produce one unit of the laminated putter head is: a. 42. b. 46. c. 52. d. 62.
Lens Junction sells lenses for $45 each and is estimating sales of 15,000 units in January and 18,000 in February. Each lens consists of 2 pounds of silicon costing $2.50 per pound, 3 oz of solution costing $3 per ounce, and 30 minutes of direct labor at a labor rate of $18 per hour. Desired inventory levels are: Â Prepare a sales budget, production budget. direct materials budget for silicon and solution, and a direct labor budget.
Salisbury Bottle Company manufactures plastic two-liter bottles for the beverage industry. The cost standards per 100 two-liter bottles are as follows: At the beginning of March, Salisburys management planned to produce 500,000 bottles. The actual number of bottles produced for March was 525,000 bottles. The actual costs for March of the current year were as follows: a. Prepare the March manufacturing standard cost budget (direct labor, direct materials, and factory overhead) for Salisbury, assuming planned production. b. Prepare a budget performance report for manufacturing costs, showing the total cost variances for direct materials, direct labor, and factory overhead for March. c. Interpret the budget performance report.

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