Azure Apparel has received a special order for Azure Apparel has received a special order for 3,600swimsuits at a price of $55 each. The regular averageselling price is $70 per swimsuit. The unit productcost is broken down as follows:Direct labor = $9.00. Direct materials = $14.50. Variable overhead = $4.50. Fixed overhead = $6.00Azure Apparel has already budgeted its productionat 15,000 swimsuits. If the company has sparecapacity, what will be the incremental contributionof the special order to operating profit?

Concept of Special Order:A special order is a one-time customer order, often at a lower price than…

Answered: Azure Apparel has received a special…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 6PA: Box Springs, Inc., makes two sizes of box springs: twin and double. The direct material for the twin...

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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.
Colonels uses a traditional cost system and estimates next years overhead will be $480,000, with the estimated cost driver of 240,000 direct labor hours. It manufactures three products and estimates these costs: If the labor rate is $25 per hour, what is the per-unit cost of each product?
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.
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?
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?
Palladium Inc. produces a variety of household cleaning products. Palladium’s controller has developed standard costs for the following four overhead items: Overhead Item Total Fixed Cost Variable Rate per DirectLabor Hour Maintenance $ 86,000 $0.20 Power 0.45 Indirect labor 140,000 2.10 Rent 35,000 Next year, Palladium expects production to require 90,000 direct labor hours. Required: 1. Prepare an overhead budget for the expected level of direct labor hours for the coming year. Palladium Inc. Overhead Budget For the Coming Year Variable costs: Rate per Hour Activity Level 90,000 Hours Maintenance $ $ Power Indirect labor Total variable cost $ Fixed costs: Maintenance $ Indirect labor Rent Total fixed costs $ Total overhead costs $ 2. Prepare an overhead budget that reflects…
Palladium Inc. produces a variety of household cleaning products. Palladium's controller has developed standard costs for the following four overhead items: Overhead Item Total Fixed Cost Variable Rate per Direct Labor Hour Maintenance $86,000 $0.20 Power $0.45 Indirect Labor $140,000 $2.10 Rent $35,000 Next year, Palladium expects production to require 88,000 direct labor hours. Prepare an overhead budget for the expected level of direct labor hours for the coming year.
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Palladium Inc. produces a variety of household cleaning products. Palladium’s controller has developed standard costs for the following four overhead items: Overhead Item Total Fixed Cost Variable Rate per DirectLabor Hour Maintenance $ 86,000 $0.20 Power 0.45 Indirect labor 140,000 2.10 Rent 35,000 Next year, Palladium expects production to require 90,000 direct labor hours. Required: Question Content Area 1. Prepare an overhead budget for the expected level of direct labor hours for the coming year. Palladium Inc.Overhead BudgetFor the Coming Year Variable costs: Rate per Hour Activity Level 90,000 Hours blank Maintenance $fill in the blank ddf6cc027003019_1 $fill in the blank ddf6cc027003019_2 blank Power fill in the blank ddf6cc027003019_3 fill in the blank ddf6cc027003019_4 blank Indirect labor fill in the blank ddf6cc027003019_5 fill in the blank…
Palladium Inc. produces a variety of household cleaning products. Palladium's controller has developed standard costs for the following four overhead items: Overhead Item Total Fixed Cost Variable Rate per Direct Labor Hour Maintenance $86,000 $0.20 Power $0.45 Indirect Labor $140,000 $2.10 Rent $35,000 Next year, Palladium expects production to require 88,000 direct labor hours. Prepare an overhead budget that reflects production that is 15% higher than expected and for production that is 15% lower than expected.
Scotch Brand Products produces packaging tape and has determined the following to be its standard cost of producing one case of budget packaging tape: Material (3.50 ounces at $1.30 per ounce) $4.55 Labor (0.30 hour at $12.00 per hour) 3.60 Overhead 2.70 Total $10.85 At the start of 2021, Scotch Brand planned to produce 20,000 cases of tape during the year. Overhead is allocated based on the number of cases of tape produced. Annual fixed overhead is budgeted at $18,000 and the variable overhead costs are budgeted at $1.80 per case. The following information summarizes the results for 2021: Actual production, 21,000 cases Purchased 275,000 ounces of material at a total cost of $343,750 Used 266,250 ounces of material in production Employees worked 22,000 hours, total labor cost $275,000 Actual overhead incurred,…
Scotch Brand Products produces packaging tape and has determined the following to be its standard cost of producing one case of budget packaging tape: Material (3.50 ounces at $1.30 per ounce) $4.55 Labor (0.30 hour at $12.00 per hour) 3.60 Overhead 2.40 Total $10.55 At the start of 2021, Scotch Brand planned to produce 80,000 cases of tape during the year. Overhead is allocated based on the number of cases of tape produced. Annual fixed overhead is budgeted at $64,000 and the variable overhead costs are budgeted at $1.60 per case. The following information summarizes the results for 2021: Actual production, 81,000 cases Purchased 275,000 ounces of material at a total cost of $343,750 Used 266,250 ounces of material in production Employees worked 22,000 hours, total labor cost $275,000 Actual overhead incurred,…

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