Blender Mixer Direct material Direct labor 2$ 23 $. 34 16 44 Manufacturing overhead @ $56 per machine hour Cost if purchased from an outside supplier Annual demand (units) 56 112 80 150 39,000 47,000 Past experience has shown that the fixed manufacturing overhead component included in the cost per machine hour averages $28. Kitchen Magician's management has a policy of filling all sales orders, even if it means purchasing units from outside suppliers. Required: 1. If 82,000 machine hours are available, and management desires to follow an optimal strategy, how many units of each product should the firm manufacture? How many units of each product should be purchased? 2. With all other things constant, if management is able to reduce the direct material for a mixer to $23 per unit, how many units of each product should be manufactured? Purchased?

Blender Mixer Direct material Direct labor 2$ 23 $. 34 16 44 Manufacturing overhead @ $56 per machine hour Cost if purchased from an outside supplier Annual demand (units) 56 112 80 150 39,000 47,000 Past experience has shown that the fixed manufacturing overhead component included in the cost per machine hour averages $28. Kitchen Magician's management has a policy of filling all sales orders, even if it means purchasing units from outside suppliers. Required: 1. If 82,000 machine hours are available, and management desires to follow an optimal strategy, how many units of each product should the firm manufacture? How many units of each product should be purchased? 2. With all other things constant, if management is able to reduce the direct material for a mixer to $23 per unit, how many units of each product should be manufactured? Purchased?

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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Brick lane Co. produces two products: Camden and Chelsea. Camden Chelsea Direct Materials 2 3 Direct labor (2 per hour) 8 2 Variable overhead 1 1 11 6 The sale price per unit is $ 13 per Camden and 11 $ per Chelsea. In August 2022, the available direct labor is limited to 7,000 hours. Salas demand in July is expected to be 4,000 for Camden and 6,000 united for Chelsea. Required: Determine the profit product mix for Brick lance Co. assuming that Monthly fixed costs are $15,000 and that opening inventory of finished goods and work in progress are nil.
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Requlred Informatlon [The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $225 and $175, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 130,000 units of each product Its average cost per unit for each product at this level of activity are given below. Alpha $42 42 $24 Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses 24 26. 34 27 29. $173 Total cost per unit 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. 4. Assume that Cane expects to produce and sell 109,000 Betas during the current year. One of Cane's sales representatives has found a new customer who is willing to…
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Variable expenses per unit: Direct Material $20Direct Labour $50Variable Manufacturing Overhead $10Fixed expenses: Fixed Manufacturing Overhead $125,000Fixed Selling Costs $75,000Fixed Administrative Costs $100,000 selling price per unit 200 operating income 420000 the business is considering paying a commission to its sales team as part of the sales expansion effort, which should result in an increase in sales revenue. The head of the marketing department has indicated that theeffort of the sales team should result in a 15% increase in sales volume. Calculate the new break-even sales figure, 2) the newmargin of safety and 3) the new operating profit, to determine whether the new sales commission plan isindeed viable.
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Required Information The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $225 and $175, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 130,000 units of each product Its average cost per unit for each product at this level of activity are given below. Beta $24 32 Direct materials Direct labor Variable manufacturing overhead Traceable fFixed manufacturing overhead Variable selling expenses Common fixed expenses %2442 42 34 31. Total cost per unit $173 607$ 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. Assume that Cane normally produces and sells 59,000 Betas per year. What is the financial advantage (disadvantage) of iscontinuing the Beta product line? o search 近