Barlow Company manufactures three products: X, Y, and Z. Unit data for each product is: X Z Selling price $90 $140 $120 Variable expenses $62 $84 $90 Contribution $28 $56 $30 margin Pounds used per 10 lbs 16 lbs 6 lbs unit The same raw material is used in all three products. Barlow has 10,000 pounds of the raw material available and will not be able to obtain any more for several weeks. As a result, Barlow will not be able to meet the demand for its products. In what order should Barlow manufacture the products to make the most profitable use of the raw material available? OZ, Y, X OX, Y, Z OYXZ OzXY
Q: Guthrie Generators manufactures a solenoid that it uses in several of its products. Management is…
A: Answer - The make-or-buy decision analysis is the act of evaluating manufacturing something…
Q: Cary Company manufactures two products called Jazzy and Soul that sell for $100 and $50,…
A: Costs are classified into variable or fixed. Variable costs per unit remains same and varies in…
Q: Mohave Corp. is considering outsourcing production of the umbrella tote bag included with some of…
A: Solution:- 1)Computation of the difference in cost between making and buying the umbrella tote bag…
Q: What is the financial advantage (disadvantage) of making the 61,000 starters instead of buying them…
A: For special order decisions, we consider relevant costs only to analyze the profitability of the…
Q: Futura Company purchases 69,000 starters from a supplier at $12.40 per unit that it installs in farm…
A: The "make or buy" concept in cost management involves deciding whether to produce a product or…
Q: Hsu Company manufactures two products (A and B) from a joint process that cost $330,000 for the year…
A: The amount of joint cost assigned to Product A is $52,800.Explanation:To allocate joint costs using…
Q: Crown Co. can produce two types of lamps, the Enlightner and Foglighter. The data on the two lamp…
A: In order to determine the Breakeven point in dollars, the fixed cost are required to be divided by…
Q: Ahrends Corporation makes 41,000 units per year of a part it uses in the products it manufactures.…
A: The objective of the question is to determine the maximum amount that Ahrends Corporation should be…
Q: What is the most profitable sales mix for Boujee Bison
A: Sales mix refers to the proportionate combination of various products or services a company sells,…
Q: Cane Company manufactures two products called Alpha and Beta that sell for $175 and $135,…
A: In business, a special order is a one-of-a-kind or unusual order that a firm gets from a client, .…
Q: that costs $5 per pound. The company has the capacity to annually produce 107,000 units of each…
A: The answer has been mentioned below.
Q: ompany manufactures two products called Alpha and Beta that sell for $185 and $120, respectively.…
A: Solution: Alpha Beta Sales Price 185 120 Variable costs: Direct materials 30 10…
Q: Cane Company manufactures two products called Alpha and Beta that sell for $155 and $115,…
A: Contribution margin takes into consideration only variable expenses. Material cost is the total cost…
Q: Topeka Company has a single product called Topek. The company normally produces and sells 80,000…
A: Selling Price Per Unit: It is the amount that one buyer pays to the seller for one unit of purchase.…
Q: Cane Company manufactures two products called Alpha and Beta that sell for $150 and $105,…
A: Financial advantage refers to the benefit that the person alleged to have obtained which could be…
Q: Dapper Dan produces a man's suit that sells for $200. Although the company's production capacity is…
A: Total sales revenue from special order = Special offer price per unit x Number of units…
Q: Futura Company purchases the 66.000 starters that it installs in its standard line of farm tractors…
A: The differential analysis is performed to compare the different alternatives available with the…
Q: Rutro Corp. makes 59,000 units per year of a part it uses in the products it manufactures. The unit…
A: Make or Buy Decision: A make-or-buy choice is one in which a company decides whether to manufacture…
Q: Scott Corporation produces a part that is used in the production of one of its products. The…
A: Solution Concept In a make or buy decision , the cost of making a product is compared to the cost of…
Q: Green Company produces 1,000 parts per year, which are used in the assembly of one of its products.…
A: A make-or-buy choice is a demonstration of picking between assembling an item in-house or buying it…
Q: Futura Company purchases the 69,000 starters that it installs in its standard line of farm tractors…
A: Formula: Total manufacturing cost = Direct material + direct labor + variable manufacturing overhead…
Q: Mohave Corporation is considering outsourcing production of the umbrella tote bag included with some…
A: Make or buy is the differential analysis which helps the entity to decide whether to make the goods…
Q: Futura Company purchases 80,000 starters from a supplier at $9.90 per unit that it installs in farm…
A: Variable cost means the cost which vary with the level of output where as fixed cost remain fixed…
Q: Futura Company purchases the 66,000 starters that it installs in its standard line of farm tractors…
A: The differential analysis is performed to compare the different alternatives available to the…
Q: Slavin Corporation manufactures two products, Alpha and Delta. Each product requires time on a…
A: At the optimal production level, short-term gains are maximized. It is the output at which the…
Q: Cane Company manufactures two products called Alpha and Beta that sell for $175 and $135,…
A: Pound of raw material per unit = Direct material cost per unit / Cost per pound of materialProduct…
Q: McGraw Company uses 7.750 units of Part X each year as a component in the assembly of one of its…
A: MAKE OR BUY DECISION The make-or-buy decision is choosing between manufacturing a product within a…
Q: Goshford Company produces a single product and has capacity to produce 190,000 units per month.…
A: Net Income: When all the costs and expenses are subtracted one by one from the sale, then if some…
Q: Cane Company manufactures two products called Alpha and Beta that sell for $175 and $135,…
A: FIXED COST Fixed costs are costs that constant at any level of activity.fixed costs are rent and…
Q: A. Assume that Cane expects to produce and sell 88,000 Alphas during the current year. A supplier…
A: Make and buy decision refers to a decision taken the manager whether to product the required…
Q: Required information [The following information applies to the questions displayed below.] Cane…
A: Contribution margin refers to the selling price deducted by variable cost. It ought to cover the…
Q: Shine Engine Company manufacturers Part A which is used in several of its engine models. Monthly…
A: A make-or-buy decision seems to be a process of employing cost-benefit analysis to make a calculated…
Q: Harvey Automobiles uses a standard part in the manufacture of several of its trucks. The cost of…
A: Variable costs are those costs which changes along with change in activity. Avoidable fixed costs…
Q: Cane Company manufactures two products called Alpha and Beta that sell for $130 and $90,…
A: In the given question we are required to compute units of each product should Cane produce to…
Q: Mohave Corp. is considering outsourcing production of ht eumbrella tote bag included with some of…
A: Calculation of above requirement are as follows
Q: Session Company uses 5,000 units of Part Y each year as a component in the assembly of one of its…
A: Make or buy is the decision making analysis that helps the entity to know if a particular production…
Q: Cairney, Incorporated manufactures a specialized part used in internal combustion engines. The…
A: A key idea in managerial accounting and financial analysis, cost per unit helps companies assess the…
Q: $5 per pound. The company has the capacity to annually produce 107,000 units of each product. Its…
A: 1) The financial advantage of buying 55,000 units from the supplier instead of making those units…
Q: Dexter Company manufactures part ZX used in several of its engine models. Monthly production costs…
A: Variable cost means the cost which vary with the level of output and fixed cost means the cost which…
Unlock instant AI solutions
Tap the button
to generate a solution
Click the button to generate
a solution
- Ahrends Corporation makes 44,000 units per year of a part it uses in the products it manufactures. The unit product cost of this part is computed as follows: Direct materials $ 23.80 Direct labor 27.70 Variable manufacturing overhead 8.70 Fixed manufacturing overhead 39.70 Unit product cost $ 99.90 An outside supplier has offered to sell the company all of these parts it needs for $86.20 a unit. If the company accepts this offer, the facilities now being used to make the part could be used to make more units of a product that is in high demand. The additional contribution margin on this other product would be $286,000 per year. If the part were purchased from the outside supplier, all of the direct labor cost of the part would be avoided. However, $34.40 of the fixed manufacturing overhead cost being applied to the part would continue even if the part were purchased from the outside supplier. This fixed manufacturing overhead cost would be applied to the company's…Ahrends Corporation makes 46,000 units per year of a part it uses in the products it manufactures. The unit product cost of this part is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit product cost $ 14.30 23.90 3.00 28.30 $69.50 An outside supplier has offered to sell the company all of these parts it needs for $55.80 a unit. If the company accepts this offer, the facilities now being used to make the part could be used to make more units of a product that is in high demand. The additional contribution margin on this other product would be $368,000 per year If the part were purchased from the outside supplier, all of the direct labor cost of the part would be avoided. However, $24.90 of the fixed manufacturing overhead cost being applied to the part would continue even if the part were purchased from the outside supplier. This fixed manufacturing overhead cost would be applied to the company's remaining products What…Futura Company purchases the 66,000 starters that it installs in its standard line of farm tractors from a supplier for the price of $10.50 per unit. Due to a reduction in output, the company now has idle capacity that could be used to produce the starters rather than buying them from an outside supplier. However, the company's chief engineer is opposed to making the starters because the production cost per unit is $11.40 as shown below: Direct materials Direct labor Supervision Depreciation Variable manufacturing overhead Rent Total product cost Per Unit $ 4.00 3.50 1.90 1.10 0.50 0.40 $11.40 Total $ 125,400 $ 72,600 $ 26,400 If Futura decides to make the starters, a supervisor would have to be hired (at a salary of $125,400) to oversee production. However, the company has sufficient idle tools and machinery such that no new equipment would have to be purchased. The rent charge above is based on space utilized in the plant. The total rent on the plant is $88,000 per period.…
- Selma Corporation uses Part PB7 in one of its products. The company's Accounting Department reports the following costs to produce 7,000 units of the PB7 that are needed every year. An outside supplier has offered to make the part and sell it to the company for RM28.30 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company. If the outside supplier's offer were accepted, only RM9,000 of these allocated general overhead costs would be avoided. Should Selma Corporation buy PB7 from the supplier or continue producing the part internally? Shows the effect on the company's total net operating income by comparing both alternatives.Mohave Corporation is considering outsourcing production of the umbrella tote bag included with some of its products. The company has received a bid from a supplier in Vietnam to produce 8,700 units per year for $10.00 each. Mohave the following information about the cost of producing tote bags: Direct materials $ 6.00 Direct labor 2.00 Variable manufacturing overhead 1.00 Fixed manufacturing overhead 1.50 Total cost per unit $ 10.50 Mohave determined all variable costs could be eliminated by outsourcing the tote bags, while 70 percent of the fixed overhead cost is unavoidable. At this time, Mohave has no specific use in mind for the space currently dedicated to producing the tote bags. Required: 1) Based on the incremental analysis, should Mohave buy the tote bags or continue making them? 2) Suppose the space Mohave currently uses to make the bags could be utilized by a new product line that would generate $12,000 in annual profits. Recompute the difference in cost…Ahrends Corporation makes 43,000 units per year of a part it uses in the products it manufactures. The unit product cost of this part is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit product cost $ 12.80 23.30 2.10 26.50 $ 64.70 An outside supplier has offered to sell the company all of these parts it needs for $51.00 a unit. If the company accepts this offer, the facilities now being used to make the part could be used to make more units of a product that is in high demand. The additional contribution margin on this other product would be $301,000 per year. If the part were purchased from the outside supplier, all of the direct labor cost of the part would be avoided. However, $23.40 of the fixed manufacturing overhead cost being applied to the part would continue even if the part were purchased from the outside supplier. This fixed manufacturing overhead cost would be applied to the company's remaining products.…
- Cane Company manufactures two products called Alpha and Beta that sell for $155 and $115, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 110,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha Beta Direct materials $ 24 $ 12 Direct labor 23 26 Variable manufacturing overhead 22 12 Traceable fixed manufacturing overhead 23 25 Variable selling expenses 19 15 Common fixed expenses 22 17 Total cost per unit $ 133 $ 107 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. Required: 1. What is the total amount of traceable fixed manufacturing overhead for each of the two products? what is the alpha and betaFutura Company purchases the 60,000 starters that it installs in its standard line of farm tractors from a supplier for the price of $10.40 per unit. Due to a reduction in output, the company now has idle capacity that could be used to produce the starters rather than buying them from an outside supplier. However, the company’s chief engineer is opposed to making the starters because the production cost per unit is $11.20 as shown below: Per Unit Total Direct materials $ 5.00 Direct labor 2.50 Supervision 1.70 $ 102,000 Depreciation 1.10 $ 66,000 Variable manufacturing overhead 0.40 Rent 0.50 $ 30,000 Total product cost $ 11.20 If Futura decides to make the starters, a supervisor would have to be hired (at a salary of $102,000) to oversee production. However, the company has sufficient idle tools and machinery such that no new equipment would have to be purchased. The rent charge above is based on space utilized in the plant. The total rent on the…Cane Company manufactures two products called Alpha and Beta that sell for $155 and $115, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 110,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha Beta Direct materials $ 24 $ 12 Direct labor 23 26 Variable manufacturing overhead 22 12 Traceable fixed manufacturing overhead 23 25 Variable selling expenses 19 15 Common fixed expenses 22 17 Total cost per unit $ 133 $ 107 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. 2. What is the company’s total amount of common fixed expenses? 3. Assume that Cane expects to produce and sell 87,000 Alphas during the current year. One of Cane's sales representatives has found a…
- Goshford Company produces a single product and has capacity to produce 100,000 units per month. Costs to produce its current sales of 80,000 units follow. The regular selling price of the product is $100 per unit. Management is approached by a new customer who wants to purchase 20,000 units of the product for $75 per unit. If the order is accepted, there will be no additional fixed manufacturing overhead and no additional fixed selling and administrative expenses. The customer is not in the company’sregular selling territory, so there will be a $5 per unit shipping expense in addition to the regular variable selling and administrative expenses. Determine whether management should accept or reject the new business.Cane Company manufactures two products called Alpha and Beta that sell for $120 and $80, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 100,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Direct materials Alpha $ 30 Beta $ 12 Direct labor 20 15 Variable manufacturing overhead 7 5 Traceable fixed manufacturing overhead 16 18 Variable selling expenses 12 8 Common fixed expenses 15 10 Total cost per unit $ 100 $ 68 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. 6. Assume that Cane normally produces and sells 90,000 Betas per year. What is the financial advantage (disadvantage) of discontinuing the Beta product line?Shine Engine Company manufacturers Part A which is used in several of its engine models. Monthly production costs for 1,000 units are as follows: Direct materials sh. 40,000 Direct labour 10,000 Variable overhead costs 30,000 Fixed overhead costs 20,000 Total costs 100,000 It is estimated that 10% of the fixed overhead costs assigned to Part A will no longer be incurred if the company purchases Part A from the outside supplier. The company has the option of purchasing the part from an outside supplier at sh. 85 per…