Controller Incorporated produces two basic types of video games, Clash and Slash. Pertinent data follow (DLH = direct labor hour):ClashSales price (per unit)$ 430Slash$ 358Costs (per unit):Direct materials8650Direct labor7498Variable factory overhead (@ $15 per DLH)603019Allocated fixed factory overhead (based on DLHS)Marketing expenses (all variable)24125443Total costs298233Operating income (per unit)$ 132$ 125There is insufficient labor capacity (i.e., DLHs) in the plant to meet the combined demand for both Clash and Slash.Both products are produced through the same production departments.In view of the labor shortage, which of the two products is most profitable, and how much is the contribution margin, per DLH?Multiple ChoiceSlash, $137.00.

When there are multiple products but only one key factor :-Step 1:- Rank the product on the basis of…

Answered: Controller Incorporated produces two…

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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Using ABC, the total manufacturing costs for product Regular is:
Vitex, Incorporated manufactures a popular consumer product and it has provided the following data excerpts from its standard cost system: Inputs Direct materials Direct labor Variable manufacturing overhead Total standard cost per unit (1) Standard Quantity or Hours Total 2.40 pounds 1.00 hours 1.00 hours Standard Cost* $734,400 $ 288,000 $ 165,600 5. Actual rate per direct labor-hour 6. Actual variable manufacturing overhead cost (2) Standard Price or Standard Cost (1) Rate x (2) $17.00 per pound $ 40.80 $ 16.00 $ 16.00 per hour $ 9.20 per hour $9.20 $ 66.00 Variances Reported 1. Number of units produced 2. Pounds of direct material purchased and used in production 3. Actual cost per pound 4. Actual direct labor-hours Price or Rate $ 13,108 F $ 3,800 U $ 4,300 F Direct materials Direct labor Variable manufacturing overhead *Applied to Work in Process during the period. The company's manufacturing overhead cost is applied to production on the basis of direct labor-hours. All of the…
Zap Video Inc. produces two basic types of video games, Clash and Slash. Pertinent data follow (DLH = direct labor hour): Clash Slash Sales price (per unit) $ 420 $ 348 Costs (per unit): Direct materials 85 49 Direct labor 72 96 Variable factory overhead (@ $15 per DLH) 60 30 Allocated fixed factory overhead (based on DLHs) 24 12 Marketing expenses (all variable) 53 42 Total costs 294 229 Operating income (per unit) $ 126 $ 119 There is insufficient labor capacity (i.e., DLHs) in the plant to meet the combined demand for both Clash and Slash. Both products are produced through the same production departments. In view of the labor shortage, which of the two products is most profitable, and how much is the contribution margin, per DLH?
Kesterson Corporation has provided the following information: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Sales commissions Multiple Choice ( $15.15 Variable administrative expense Fixed selling and administrative expense The incremental manufacturing cost that the company will incur if it increases production from 10,000 to 10,001 units is closest to: $16.45 Cost per Unit $6.70 $ 3.30 $ 1.65 $13.95 $ 1.20 $ 0.80 Cost per Period $ 23,000 $ 5,000 Hel
Paolucci Corporation's relevant range of activity is 6,900 units to 14,500 units. When it produces and sells 10,700 units, its averag Average Cost per Unit $ 6.85 $ 3.75 $ 1.75 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense If 9,700 units are sold, the variable cost per unit sold is closest to: $ 3.30 $ 1.05 $ 0.75 $ 1.00 $ 0.65
Martinez Company's relevant range of production is 15,000 units to 25,000 units. When it produces and sells 20,000 units, its unit costs are as follows: Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense Amount Per Unit $6.32 $3.82 $ 1.82 $5.32 $ 4.32 $ 3.32 $ 1.82 $ 0.91 Required: For financial accounting purposes, what is the total amount of product costs incurred to make 20,000 units? Total product cost
Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and its standard cost card per unit is as follows: Direct material: 5 pounds at $8.00 per pound Direct labor: 2 hours at $14 per hour Variable overhead: 2 hours at $5 per hour Total standard variable cost per unit The company also established the following cost formulas for its selling expenses: Variable Cost per Unit Sold Advertising Sales salaries and commissions Shipping expenses $ 40.00 28.00 10.00 $78.00 Fixed Cost per Month $ 200,000 $ 100,000 $12.00 $ 3.00 The planning budget for March was based on producing and selling 25,000 units. However, during March the company actually produced and sold 30,000 units and incurred the following costs: a. Purchased 160,000 pounds of raw materials at a cost of $7.50 per pound. All of this material was used in production. b. Direct-laborers worked 55,000 hours at a rate of $15.00 per hour. Materials quantity…
Kubin Company's relevant range of production is 11,000 to 14,000 units. When it produces and sells 12,500 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 7.20 Direct labor 4.20 Variable manufacturing overhead 1.70 Fixed manufacturing overhead 5.20 Fixed selling expense 3.70 Fixed administrative expense $ 2.70 Sales commissions $ 1.20 Variable administrative expense $ 0.70 Required: 1. what is the total direct manufacturing cost incurred to make 12,500 units? 2 what is the total indirect manufacturing cost incurred to make 12,500 units? 3.Assume the cost object is the Manufacturing dept and its total output is $12,500 units. How much manufacturing cost is direct traceable to the manufacturing dept? and How much manufacturing cost is indirect traceable to the manufacturing dept? 4. Assume the cost object is the company's various sales. Assume the company spent $33,750 of its total fixed selling expense on advertising and the remainder of the…

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