Body Time, Inc., produces two basic types of weight-lifting equipment, Model 9 and Model 14. Pertinent data are as follows: (Click the icon to view the data.) The weight-lifting craze suggests that Body Time can sell enough of either Model 9 or Model 14 to keep the plant operating at full capacity. Both products are processed through the same production departments. Read the requirements. Before determining which products to produce, let's calculate the contribution margin per unit and the contribution margin per machine hour for each machine. (Reduce the fixed manufacturing overhead to the lowest possible ratio of machine hours in order to calculate the contribution margin per machine hour. Example: 8:4 would be 2:1. Enter the amounts to the nearest cent.) Model 9 Model 14 Contribution margin per unit *** = Contribution margin per machine hour

Body Time, Inc., produces two basic types of weight-lifting equipment, Model 9 and Model 14. Pertinent data are as follows: (Click the icon to view the data.) The weight-lifting craze suggests that Body Time can sell enough of either Model 9 or Model 14 to keep the plant operating at full capacity. Both products are processed through the same production departments. Read the requirements. Before determining which products to produce, let's calculate the contribution margin per unit and the contribution margin per machine hour for each machine. (Reduce the fixed manufacturing overhead to the lowest possible ratio of machine hours in order to calculate the contribution margin per machine hour. Example: 8:4 would be 2:1. Enter the amounts to the nearest cent.) Model 9 Model 14 Contribution margin per unit *** = Contribution margin per machine hour

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Lloyd Gettys, a client of Kevin Lomax, is considering two different processes to make his product—process 1 and process 2. Process 1 requires Lloyd to manufacture subcomponents of the product in-house. As a result, materials are less expensive, but fixed overhead is higher. Process 2 involves purchasing all subcomponents from outside suppliers. The direct materials costs are higher, but fixed factory overhead is considerably lower. Relevant data for a sales level of 30,000 units follow: Process 1 Process 2 Sales $8,010,000 $8,010,000 Variable expenses 2,700,000 4,200,000 Contribution margin $5,310,000 $3,810,000 Less total fixed expenses 3,650,625 1,428,750 Operating income $1,659,375 $2,381,250 Unit selling price $267 $267 Unit variable cost $90 $140 Unit contribution margin $177 $127 a. Compute the degree of operating leverage for each process. b. Suppose that sales are 20 percent higher than budgeted. By what percentage will operating income increase for each process? What will be…
Bonita, Inc. produces two types of gas grills: a family model and a deluxe model. Bonita's controller has decided to use a plantwide overhead rate based on direct labor costs. The president of the company recently heard of activity-based costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed: machining and machine setup. Presented below is information related to the company's operations: Direct labor costs Machine hours Setup hours (a) Family Model $76,800 2,000 200 Total estimated overhead costs are $460,800. Overhead cost allocated to the machining activity cost pool is $276,480 and $184,320 is allocated to the machine setup activity cost pool. Overhead rate Deluxe Model $153,600 2,000 800 Compute the overhead rate using the traditional (plantwide) approach. (Round answer to 2 decimal places, e.g. 15.25.) $
Mary Jones and Jack Smart have joined forces to start M&J Food Products, a processor of packaged shredded lettuce for institutional use. Jack has years of food processing experience, and Mary has extensive commercial food preparation experience. The process will consist of opening crates of lettuce and then sorting, washing, slicing, preserving, and finally packaging the prepared lettuce. Together, with help from vendors, they think they can adequately estimate demand, fixed costs, revenues, and variable cost per 5-pound bag of lettuce. They think a largely manual process will have monthly fixed cost of $50,000 and a variable cost of $2.50 per bag. They expect to sell 75,000 bags of lettuce per month. They expect to sell the shredded lettuce for $3.25 per 5-pound bag. Jack and Mary has been contacted by a vendor to consider a more mechanized process. This new process will have monthly fixed cost of $125,000 per month with a variable cost of $1.75 per bag. Based on the above…
Colby Company makes cases for cell phones of all sizes and types for sale through specialty retailers. The company makes a standard model for the most recent iPhone as well as a deluxe model. Management has designed an ABC system with the following activity cost pools and activity rates for these models: Activity Cost Pool Supporting manufacturing Order processing Customer service Management would like an analysis of the profitability of a particular customer, Cell City, which has ordered the following products over the last 12 months: Number of cases Number of orders Direct labour-hours per case Selling price per case Direct materials cost per case. Sales Costs: Activity Rates $2 per direct labour-hour $19 per order $60 per customer Direct materials Direct labour Supporting manufacturing Order processing Customer service The company's direct labour rate is $20 per hour. Required: Using the company's ABC system, compute the customer margin of Cell City. Customer margin Standard Model…
Subject - account Please help me. Thankyou.
Green Shade manufactures insulated windows. The firm’s repair and maintenance (R&M) cost is mixed and varies most directly with machine hours worked. The following data (on the attached picture) have been gathered from recent operations: a. Use the high–low method to estimate a cost formula for repairs and maintenance. b. Use least squares regression to estimate a cost formula for repairs and maintenance. c. Does the answer to part (a) or to part (b) provide the better estimate of the relation ship between repairs and maintenance costs and machine hours? Why?
i need the answer quickly
Ashvin
Colby Company makes cases for cell phones of all sizes and types for sale through specialty retailers. The company makes a standard model for the most recent iPhone as well as a deluxe model. Management has designed an ABC system with the following activity cost pools and activity rates for these models: Activity Rates Activity Cost Pool Supporting manufacturing $2 per direct labour-hour $27 per order Order processing Customer service. $68 per customer Management would like an analysis of the profitability of a particular customer, Cell City, which has ordered the following products over the last 12 months: Standard Model Deluxe Model 95 Number of cases 270 Number of orders Direct labour-hours per case. 5 0.25 47 2 0.40 67 Selling price per case $ $ $ 27 Direct materials cost per case $ 24 The company's direct labour rate is $28 per hour. Required: Using the company's ABC system, compute the customer margin of Cell City. Customer margin
RelyaTech Corporation manufactures a number of products at its highly automated factory. The products are very popular, with demand far exceeding the factory's capacity. To maximize profit, management should rank products based on their selling price gross margin contribution margin per unit of the constrained resource contribution margin
Two separate processes are being considered for manufacturing a product. Process A has fixed costs of $12,000 and variable costs of $6 per unit. Process B has fixed costs of $16,000 and variable costs of $4 per unit. a. What is the break-even quantity for the two processes (Show your work)? b. Which process would be more cost-effective for producing 1,000 units? c. Which process would be more cost-effective for producing 3,000 units?
Thermal Rising, Incorporated, makes paragliders for sale through specialty sporting goods stores. The company has a standard paraglider model, but also makes custom-designed paragliders. Management has designed an activity-based costing system with the following activity cost pools and activity rates: Activity Coat Pool Supporting direct labor Order processing Custom design processing Customer service Management would like an analysis of the profitability of a particular customer, Big Sky Outfitters, which has ordered the following products over the last 12 months: Number of gliders Number of orders Number of custom designs Direct labor-houra per glider Activity Rate $ 20 per direct labor-hour $ 198 per order $267 per custom design $ 420 per customer Selling price per glider Direct materials cost per glider The company's direct labor rate is $20 per hour. Customer margin Standard Model 14 2 0 27.50 $1,875 $ 472 Custom Design 2 2 2 34.00 $ 2,490 $586 Required: Using the company's…