View PoliciesO $18.75.O $23.08.Current Attempt in ProgressCrane Company produces two products, Flower and Planter. Flower is a high-volume item totaling 20000 units annually. Planter is alow-volume item totaling only 6000 units per year. Flower requires one hour of direct labor for completion, while each unit of Planterrequires 2 hours. Therefore, total annual direct labor hours are 32000 (20000+ 12000). Estimated annual manufacturing overheadcosts are $600000. Crane uses a traditional costing system and assigns overhead based on direct labor hours. Each unit of Planterwould be assigned overhead ofO $37.50.need more information to compute.!!OO**

Traditional Costing -The technique of traditional costing involves allocating charges to goods…

Answered: Current Attempt in Progress Crane…

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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Vikram
Pasternik Company produces and sells two products, Alpha and Zeta. The following information is available relating to its setup activities: Alpha Zeta Units produced 250 20,000 Batch size (units) 10 500 Total direct labor hours 1,000 39,000 Cost per setup $2,000 $2,000 Use of activity-based costing would allocate the following amounts of setup cost to each unit (rounded to the nearest cent): Alpha Zeta A) $200.00 $4.00 B) $500.00 $1,025.64 C) $6.42 $6.50 D) $80.00 $50.00 E) $8.00 $0.10
Each year, Basu Company produces 24,000 units of a component used in microwave ovens. An outside supplier has offered to supply the part for $1.17. The unit cost is: Direct materials $0.72 Direct labor 0.25 Variable overhead 0.13 Fixed overhead 2.95 Total unit cost $4.05 Required: 1. What are the alternatives for Basu Company? 2. Assume that none of the fixed cost is avoidable. List the relevant cost(s) of internal production. List the relevant cost(s) of external purchase. 3. Which alternative is more cost effective and by how much? _____ by $___ 4. What if $18,560 of fixed overhead is rental of equipment used only in production of the component that can be avoided if the component is purchased? Which alternative is more cost effective and by how much? ____ by $____
Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Hubs Sprockets Unit 0.50 0.10 Annual Production 13,000 units 41,000 units Additional information about the company follows: a. Hubs require $35 in direct materials per unit, and Sprockets require $14. b. The direct labor wage rate is $10 per hour. c. Hubs require special equipment and are more complex to manufacture than Sprockets. d. The ABC system has the following activity cost pools: Activity Cost Pool (Activity Measure) Machine setups (number of setups) Special processing (machine-hours) General factory (organization-sustaining) Required: 1. Compute the activity rate for each activity cost pool. Estimated Overhead Activity Cost Hubs $ 20,790 105 Sprockets 84 Total $ 200,000 5,000 0 $ 68,000 NA NA 189 5,000 NA 2. Determine the unit product cost of each product according to the ABC system
Gelb Company currently makes a key part for its main product. Making this part incurs per unit variable costs of $1.30 for direct materials and $0.85 for direct labor. Incremental overhead to make this part is $1.44 per unit. The company can buy the part for $3.76 per unit. (a) Prepare a make or buy analysis of costs for this part. (Enter your answers rounded to 2 decimal places.) (b) Should Gelb make or buy the part? (a) Make or Buy Analysis Direct materials Direct labor Overhead Cost to buy Cost per unit Cost difference (b) Company should: Make Buy
Aileen Co manufactures two components, L and M. Both components are manufactured on the machine ZX. The following cost information per unit of L and M is available: Direct material Direct labour Variable overhead Fixed overhead Total cost L M ($) ($) 12 18 25 15 8 7 6 46 10 55 Component L requires three hours on machine ZX and component M requires five hours. Manufacturing requirements show a need for 1,500 units of each component per week. The maximum number of machine ZX hours available per week is 10,000. An external supplier has offered to supply Aileen Co with the components for a price of $57 per component L and $55 per component M. Identify, by clicking on the relevant boxes in the table below, whether each of the following statements are true or false. would be cheaper for Aileen Co to produce all the components in-house if the hours on machine ZX were available Aileen Co should purchase 400 units of component M from the external supplier TRUE TRUE FALSE FALSE
Gelb Company currently makes a key part for its main product. Making this part incurs per unit variable costs of $1.40 for direct materials and $0.95 for direct labor. Incremental overhead to make this part is $1.48 per unit. The company can buy the part for $4.02 per unit. (a) Prepare a make or buy analysis of costs for this part. Note: Enter your answers rounded to 2 decimal places. (b) Should Gelb make or buy the part? (a) Make or Buy Analysis Direct materials Direct labor Overhead Cost to buy Cost per unit Cost difference (b) Company should: Make Buy
Cane Company manufactures two products called Alpha and Beta that sell for $120 and $80, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 100,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Direct materials Alpha $ 30 Beta $ 12 Direct labor 20 15 Variable manufacturing overhead 7 5 Traceable fixed manufacturing overhead 16 18 Variable selling expenses 12 8 Common fixed expenses 15 10 Total cost per unit $ 100 $ 68 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. 6. Assume that Cane normally produces and sells 90,000 Betas per year. What is the financial advantage (disadvantage) of discontinuing the Beta product line?
Redhead Equipment Inc. manufactures three products. Information about the selling prices and unit costs for the three products is below: Product A Selling price $90.00 $60.00 $110.00 Variable costs $52.00 $24.00 $63.00 Fixed costs $22.00 $8.00 $25.00 Compression machine time 11 min. 6 min. 13 min. Fixed costs are applied based on direct labour hours. Demand for the three products exceeds the company's current production capacity. The compression machine is the constraint, with just 2,500 minutes of compression machine time available this week. Required: a. Given the compression machine constraint, which product should be emphasized? Be sure to show your calculations to support your recommendation Activa Go to P
Vishnu

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