Tutorial Q. 1Company XYZ has 2 fixed price contracts for 2 different clients. The company has enoughcapacity for both contracts but is uncertain whether they will be profitable.Data as follows:CustomerAAABBBComponent TypeContract Value($)Contract QuantityА999B999$27,000$100,0001,000 unit$155 hours2,000 units$20Material cost/unitMoulding time/ batchBatch Size7.5 hours100 units50 unitsAnnual Budgeted overheads as follows:ActivityCost DriverCost DriverCost poolvolume/year2,000MouldingInspectionProductionMoulding hoursBatches$150,000$75,000$125,000150Contracts20ManagementRequired:Calculate the activity based costs and profits for each contract.Calculate the profit for each job using Absorption costing. Absorb overheadsusing moulding hours.

Marginal costing and absorption costing are two costing methods. Under marginal costing, variable…

Company XYZ has 2 fixed price contracts for 2 different clients. The company has enough capacity for both contracts but is uncertain whether they will be profitable. Data as follows: Customer Component Type Contract Value($) Contract Quantity AAA ВВВ A999 В999 $27,000 $100,000 1,000 unit $15 2,000 units $20 Material cost/unit Moulding time/ batch Batch Size 5 hours 7.5 hours 100 units 50 units Annual Budgeted overheads as follows: Activity Cost Driver Cost Driver Cost pool Moulding Inspection Production Moulding hours Batches volume/year 2,000 150 $150,000 $75,000 $125,000 Contracts 20 Management Required: а) b) Calculate the activity based costs and profits for each contract. Calculate the profit for each job using Absorption costing. Absorb overheads using moulding hours.

Company XYZ has 2 fixed price contracts for 2 different clients. The company has enough capacity for both contracts but is uncertain whether they will be profitable. Data as follows: Customer Component Type Contract Value($) Contract Quantity AAA ВВВ A999 В999 $27,000 $100,000 1,000 unit $15 2,000 units $20 Material cost/unit Moulding time/ batch Batch Size 5 hours 7.5 hours 100 units 50 units Annual Budgeted overheads as follows: Activity Cost Driver Cost Driver Cost pool Moulding Inspection Production Moulding hours Batches volume/year 2,000 150 $150,000 $75,000 $125,000 Contracts 20 Management Required: а) b) Calculate the activity based costs and profits for each contract. Calculate the profit for each job using Absorption costing. Absorb overheads using moulding hours.

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

Jacoby Company received an offer from an exporter for 20,500 units of product at $19 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available: Domestic unit sales price $24 Unit manufacturing costs: Variable $9 Fixed $5 What is the differential revenue from the acceptance of the offer? a.$389,500 b.$881,500 c.$102,500 d.$492,000
Stryker Industries received an offer from an exporter for 24,000 units of product at $18 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data is available: Domestic unit sales price $21 Unit manufacturing costs: Variable 11 Fixed 6 What is the amount of income or loss from acceptance of the offer? a.$168,000 b.$264,000 c.$504,000 d.$432,000
A2
Stryker Industries received an offer from an exporter for 21,000 units of product at $19 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available: Domestic unit sales price $23 Unit manufacturing costs: Variable Fixed 9 4 The amount of profit or loss from acceptance of the offer is a a. $483,000 Ob. $189,000 ○ c. $399,000 Od. $210,000
Jacoby Company received an offer from an exporter for 29,500 units of product at $18 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available: Line Item Description Amount Domestic unit sales price $25 Unit manufacturing costs: Variable 9 Fixed 4 The differential revenue from the acceptance of the offer is a. $1,268,500 b. $206,500 c. $737,500 d. $531,000
REQUIRED Calculate the number of orders that should be placed based on the quantity that will keep the cost of placing the orders and the holding costs at a minimum. INFORMATION The following information was supplied by KL Suppliers for the only product that it sells: Monthly demand Unit cost Fixed cost per order Carrying cost per unit EOQ 300 units R20 R25 10% of the unit cost 300 units
Jacoby Company received an offer from an exporter for 26,200 units of product at $19 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available: Domestic unit sales price $24 Unit manufacturing costs: Variable Fixed 10 d. $131,000 3 The differential revenue from the acceptance of the offer is O a. $628,800 O b. $497,800 Oc. $1,126,600 O
Stryker Industries received an offer from an exporter for 26,000 units of product at $16 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available: Domestic unit sales price $22 Unit manufacturing costs: Variable Fixed 13 6 The amount of profit or loss from acceptance of the offer is a Oa. $78,000 Ob. $338,000 Oc. $416,000 Od. $572,000
Stryker Industries received an offer from an exporter for 21,000 units of product at $17 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available: Domestic unit sales price $21 Unit manufacturing costs: Variable Fixed 9 4 The differential cost from the acceptance of the offer is O a. $189,000 O b. $441,000 O c. $84,000 O d. $357,000
uod cz 1.The cost to produce one unit of the product is: Material $ 13.00 Labor $8.00 Variable cost $7.00 Fixed expenses $ 18.00 Total fixed expenses: $ 500,000 The company's normal capacity is 100,000 units. The figures given above are for 80,000 units. The company has received a special offer for 20,000 units for a price of $ 36 per unit from a foreign customer. Advice the manufacturer on whether the order should be accepted or not. For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). 3 (12pt) Qi:公 Arial vE - E T TTTT Paragraph v T T S T HTML CSS O fr Mashups