Current Attempt in ProgressKiner Co. computed an overhead rate for mnachining costs($680000) of $5 per machine hour. Machining costs aredriven by machine hours. If computed based on direct laborhours, the overhead rate for machining costs would be $10per direct labor hour. The company produces two products,Cape and Chap. Cape requires 81600 machine hours and20000 direct labor hours, while Chap requires 54400machine hours and 30000 direct labor hours. Usingactivity-based costing, machining costs assigned to eachproduct isChapСаре$408000$272000$750000$250000$200000$300000$371441$308559

Compute machining cost assigned to Cape product using activity-based costing as shown below:

Answered: Current Attempt in Progress Kiner Co.…

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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Zesta Company produces a part used in the manufacture of one of its products. The unit product cost is $18, computed as follows: Direct materials $ 8 Direct labor 4 Variable manufacturing overhead Fixed manufacturing overhead Unit product cost 1 $ 18 An outside supplier has offered to provide the annual requirement of 4,000 of the parts for only $14 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. Based on these data, whether the company accept or reject the supplier offer? And Why?
Beto Company pays $7.30 per unit to buy a part for one of the products it manufactures. With excess capacity, the company is considering making the part. Making the part would cost $8.40 per unit for direct materials and $1.00 per unit for direct labor. The company normally applies overhead at the predetermined rate of 200% of direct labor cost. Incremental overhead to make the part would be 80% of direct labor cost. (a) Prepare a make or buy analysis of costs for this part. (Enter your answers rounded to 2 decimal places.) (b) Should Beto 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
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 $____
One of Concord Company's activity cost pools is machine setups with estimated overhead of $220000. Concord produces sparklers (320 setups) and lighters (680 setups). How much of the machine setup cost pool should be assigned to sparklers? $220000 $70400 O $110000 O $149600
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
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
A VACUUM MANAUFACTUER HAS PREPARED THE FOLLOWING HAS THE FOLLOWING COST DATA FOR MANUFACTURING ONE OF ITS ENGINE COMPONENTS BASED ON THE ANNUAL PRODUCTION OF 50,000 UNITS DIRECT MATERIALS $75,000 DIRECT LABOR $100,000 TOTAL $175,000 IN ADDITION, VARIABLE FACTORY OVERHEAD IS APPLIED AT $7.50 PER UNIT. FIXED FACTORY OVERHEAD IS APPLIED AT 150% OF DIRECT LABOUR COST PER UNIT. THE VACUUM SELLS FOR $150 EACH. A THIRD PARTY HAS OFFERED TO MAKE THE ENGINES FOR $60 PER UNIT. 75% OF THE FIXED FACTORY OVERHEAD, WHICH REPRESENTS EXECUTIVE SALARIES, RENT, DEPRECIATION, AND TAXES, CONTINUES REGARDLESS OF DECISION. sHOULD THE COMPANY MAKE OR BUY THE ENGINES?
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

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