Cathy and Tom's Specialty Ice Cream Company operates a small production facility for the local community. The facility has the capacity to make 16,800 gallons of the single flavor, GUI Chewy, annually. The plant has only two customers, Chuck's Gas & Go and Marcee's Drive & Chew DriveThru. Annual orders for Chuck's total 9,700 gallons and annual orders for Marcee's total 5,400 gallons. Variable manufacturing costs are $1.10 per gallon, and annual fixed manufacturing costs are $24,900. Required: What cost per gallon should the cost system report? (Round your intermediate calculations and final answers to 2 decimal places.)

Cathy and Tom's Specialty Ice Cream Company operates a small production facility for the local community. The facility has the capacity to make 16,800 gallons of the single flavor, GUI Chewy, annually. The plant has only two customers, Chuck's Gas & Go and Marcee's Drive & Chew DriveThru. Annual orders for Chuck's total 9,700 gallons and annual orders for Marcee's total 5,400 gallons. Variable manufacturing costs are $1.10 per gallon, and annual fixed manufacturing costs are $24,900. Required: What cost per gallon should the cost system report? (Round your intermediate calculations and final answers to 2 decimal places.)

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 6EA: Reubens Deli currently makes rolls for deli sandwiches it produces. It uses 30,000 rolls annually in...

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Problem 10-65 (Algo) Assigning Capacity Costs (LO 10-6)

Required:

What cost per gallon should the cost system report? (Round your intermediate calculations and final answers to 2 decimal places.)

Definition Definition Total cost of procuring or producing a product or the cost that an individual or business owner undertakes for the manufacturing of goods.

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5. Reuben’s Deli currently makes rolls for deli sandwiches it produces. It uses 30,000 rolls annually in the production of deli sandwiches. The costs to make the rolls are: Materials $0.24 per roll Labor 0.40 per roll Variable overhead 0.16 per roll Fixed overhead 0.20 per roll A potential supplier has offered to sell Reuben the rolls for $0.90 each. If the rolls are purchased, 30% of the fixed overhead could be avoided. PLEASE NOTE: Costs per unit are rounded to two decimal places and shown with "$" and commas as needed (i.e. $1,234.56). All dollar amounts are rounded to whole dollars and shown with "$" and commas as needed (i.e. $12,345). What are Jason's relevant cost per roll? per roll. What are Jason's total relevant costs? What does the total offer cost? If Reuben accepts the offer, what will the effect on profit be? Incremental dollar amount = . Increase or Decrease? . Please note: Your answer is either "Increase" or…
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Subject:- General Account
Reuben's Deli currently makes rolls for deli sandwiches it produces. It uses 30,000 rolls annually in the production of deli sandwiches. The costs to make the rolls are: Costs Reuben's Deli cost data Amounts Materials Labor Variable overhead Fixed overhead Increments $0.24 per roll 0.40 per roll 0.16 per roll 0.20 per roll A potential supplier has offered to sell Reuben the rolls for $0.90 each. If the rolls are purchased, 30% of the fixed overhead could be avoided. If Reuben accepts the offer, what are the total costs to purchase the rolls?
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