Company XYZ is currently producing and selling 100 units. At this level, the total direct materials cost is $500, the total direct labor cost is $600 and the total manufacturing overhead cost is $1,200, which includes $800 fixed manufacturing overhead cost. The company's total selling and administrative expenses are $2,500, which include $1,500 fixed selling and administrative costs. Assume that the company wishes to increase the number of units produced and sold to 102 units, what would be the incremental cost? (rounded to nearest ($) value) O a. 30 ОБ. 25 O c. 50 O d. None of the given answers e. 46

Company XYZ is currently producing and selling 100 units. At this level, the total direct materials cost is $500, the total direct labor cost is $600 and the total manufacturing overhead cost is $1,200, which includes $800 fixed manufacturing overhead cost. The company's total selling and administrative expenses are $2,500, which include $1,500 fixed selling and administrative costs. Assume that the company wishes to increase the number of units produced and sold to 102 units, what would be the incremental cost? (rounded to nearest ($) value) O a. 30 ОБ. 25 O c. 50 O d. None of the given answers e. 46

Name: QuestionCompany XYZ is currently producing and selling 100 units. At
Uploaded: 2024-03-20T06:32:49.000Z
Channel: Bartleby
Description: QuestionCompany XYZ is currently producing and selling 100 units. At this level, thetotal direct materials cost is $500, the total direct labor cost is $600 andthe total manufacturing overhead cost is $1,200, which includes $800 fixedmanufacturing o

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

am. 100.
Scott Corporation produces a part for use in the production of one of its products. The per-unit costs associated with the annual production of 1,000 units of this part are as follows: Direct Materials $10.50 $24.00 Direct labor Variable factory overhead $5.50 Fixed factory overhead $12.00 Total Costs $52.00 $5,000 of the fixed factory overhead costs associated with the production of this product are common fixed costs. Larson Company has offered to sell 1,000 units of the same part to Scott Corporation for $42 per unit. Scott should: Select one: a. buy the part, because this would save $10.00 per unit. X b. buy the part, because this would save the company $5,000 annually. c. make the part, because this would save the company $5,000 annually. d. make the part, because this would save $2.00 per unit.
Brightstone Tire and Rubber Company has capacity to produce 153,000 tires. Brightstone presently produces and sells 117,000 tires for the North American market at a price of $91 per tire. Brightstone is evaluating a special order from a European automobile company, Euro Motors. Euro is offering to buy 18,000 tires for $75.15 per tire. Brightstone's accounting system indicates that the total cost per tire is as follows: Direct materials $35 Direct labor 13 Factory overhead (60% variable) 21 Selling and administrative expenses (40% variable) 18 Total $87 Brightstone pays a selling commission equal to 5% of the selling price on North American orders, which is included in the variable portion of the selling and administrative expenses. However, this special order would not have a sales commission. If the order was accepted, the tires would be shipped overseas for an additional shipping cost of $5 per tire. In addition, Euro has made the order conditional on receiving European safety…
The machining division of Cullumber International has a capacity of 2,000 units. Its sales and cost data are: Selling price per unit $80 Variable manufacturing costs per unit 25 Variable selling costs per unit 3 Total fixed manufacturing overhead 183,200 The machining division is currently selling 1,800 units to outside customers, and the assembly division of Cullumber International wants to purchase 400 units from machining. If the transaction takes place, the variable selling costs per unit on the units transferred to assembly will be $0/unit, and not $3/unit. If Cullumber's assembly division is currently buying from an outside supplier at $75 per unit, what will be the effect on overall company profits if internal sales for 400 units take place at the optimum transfer price? The company profits would by $
Supler Corporation produces a part used in the manufacture of one of its products. The unit product cost is $21, computed as follows: Direct materials $ 8 Direct labor 7 Variable manufacturing overhead 1 Fixed manufacturing overhead 5 Unit product cost $ 21 An outside supplier has offered to provide the annual requirement of 5,500 of the parts for only $13 each. The company estimates that 60% of the fixed manufacturing overhead cost above could be eliminated if the parts are purchased from the outside supplier. Assume that direct labor is an avoidable cost in this decision. Based on these data, the costs saved by purchasing the units of purchasing the parts from the outside supplier would be: Multiple Choice $1 per unit on average ($8) per unit on average $6 per unit on average ($1) per unit on average
Brightstone Tire and Rubber Company has capacity to produce 272,000 tires. Brightstone presently produces and sells 208,000 tires for the North American market at a price of $111 per tire. Brightstone is evaluating a special order from a European automobile company, Euro Motors. Euro is offering to buy 32,000 tires for $91.65 per tire. Brightstone's accounting system indicates that the total cost per tire is as follows: Direct materials $42 Direct labor 16 Factory overhead (60% variable) 26 Selling and administrative expenses (40% variable) 22 Total $106 Brightstone pays a selling commission equal to 5% of the selling price on North American orders, which is included in the variable portion of the selling and administrative expenses. However, this special order would not have a sales commission. If the order was accepted, the tires would be shipped overseas for an additional shipping cost of $6 per tire. In addition, Euro has made the order conditional on receiving…
tonemaier Manufacturing Inc. has begun production on a new product. The primary cost of the product is direct materials with a cost of $1,050. Direct labor is estimated to be $285 per unit, overhead is estimated to be $120 per unit, and selling and administrative expenses are estimated to be $75 per unit. Stonemaier desires a profit of $480 per unit. ----------------------------- What is the required markup percentage on direct materials in order to achieve the desired profit? (provide your answer in decimal format to two decimal places --> i.e. 53.4% = 0.53)
GEM Limited has a single product Flicks. The company normally produces and sells 80,000units of Flicks each year at a price of $240 per unit. The company’s unit costs at this level ofactivity are as follow:Direct material $57.00Direct labor 60.00Variable manufacturing overhead 16.80Fixed manufacturing overhead 30.00Variable selling and administrative costs 10.20Fixed selling and administrative costs 27.00 Total unit cost $201.00GEM has sufficient capacity to produce 100 000 units of Flicks a year without any increase infixed manufacturing overhead.Required:(a) GEM has an opportunity to sell 10 000 units to an overseas customer. Import duties andother special costs associated with this order would total $42 000. The only selling coststhat would be associated with the order would be a shipping cost of $9.00 per unit.What would be the minimum acceptable unit price for GEM to consider this order?(hint: GEM would not accept the order if it would reduce the…
Company XYZ is currently producing and selling 100 units. At this level, the total direct materials cost is $500, the total direct labor cost is $600 and the total manufacturing overhead cost is $1,200, which includes $800 fixed manufacturing overhead cost. The company's total selling and administrative expenses are $2,500, which include $1,500 fixed selling and administrative costs. Assume that the company wishes to increase the number of units produced and sold to 102 units, what would be the incremental cost? (rounded to nearest ($) value) О а. 46 Оь. 25 None of the given answers O d. 50 O e. 30