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Cathy and Tom's Specialty Ice Cream Company operates a small production facility for the local community. The facility has the capacity to make 25,300 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 12,650 gallons and annual orders for Marcee's total 6,325 gallons. Variable manufacturing costs are $1.10 per gallon, and annual fixed manufacturing costs are $32.700. The ice cream business has two seasons, summer and winter. Each season lasts exactly six months. Chuck's orders 6,325 gallons in the summer and 6,325 gallons in the winter. Marcee's is closed in the winter and orders all 6,325 gallons in the summer. Required: a. Calculate the product cost for each season with excess capacity costs assigned to season in which it is incurred. h. Calculate the produ

Cathy and Tom's Specialty Ice Cream Company operates a small production facility for the local community. The facility has the capacity to make 25,300 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 12,650 gallons and annual orders for Marcee's total 6,325 gallons. Variable manufacturing costs are $1.10 per gallon, and annual fixed manufacturing costs are $32.700. The ice cream business has two seasons, summer and winter. Each season lasts exactly six months. Chuck's orders 6,325 gallons in the summer and 6,325 gallons in the winter. Marcee's is closed in the winter and orders all 6,325 gallons in the summer. Required: a. Calculate the product cost for each season with excess capacity costs assigned to season in which it is incurred. h. Calculate the produ

FINANCIAL ACCOUNTING
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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Cathy and Tom's Specialty Ice Cream Company operates a small production facility for the local community. The facility has the capacity to make 25,300 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 12,650 gallons and annual orders for Marcee's total 6,325 gallons. Variable manufacturing costs are $1.10 per gallon, and annual fixed manufacturing costs are $32,700. The ice cream business has two seasons, summer and winter. Each season lasts exactly six months. Chuck's orders 6,325 gallons in the summer and 6,325 gallons in the winter. Marcee's is closed in the winter and orders all 6,325 gallons in the summer. Required: a. Calculate the product cost for each season with excess capacity costs assigned to season in which it is incurred. b. Calculate the product cost for each season with excess capacity costs assigned to the season requiring it
Transcribed Image Text:Cathy and Tom's Specialty Ice Cream Company operates a small production facility for the local community. The facility has the capacity to make 25,300 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 12,650 gallons and annual orders for Marcee's total 6,325 gallons. Variable manufacturing costs are $1.10 per gallon, and annual fixed manufacturing costs are $32,700. The ice cream business has two seasons, summer and winter. Each season lasts exactly six months. Chuck's orders 6,325 gallons in the summer and 6,325 gallons in the winter. Marcee's is closed in the winter and orders all 6,325 gallons in the summer. Required: a. Calculate the product cost for each season with excess capacity costs assigned to season in which it is incurred. b. Calculate the product cost for each season with excess capacity costs assigned to the season requiring it
Winter Summer Show Transcribed Text Winter Summer Show Transcribed Text Product Cost per gallon per gallon Product Cost per gallon per gallon
Transcribed Image Text:Winter Summer Show Transcribed Text Winter Summer Show Transcribed Text Product Cost per gallon per gallon Product Cost per gallon per gallon
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