Dance in the Dark, Inc., amoung other things, manufactures dolls. The monthly production from an initial joint process is as follows: Costs of initial processing Direct Materials (plastic) Direct Labor (machinists) Variable Overhead (utilities, maint., etc.,) Fixed Manufacturing Overhead (plant cost) $ 55,000. 35,000. 110,000. 50,000. At which point, 10,000 units of product ( the basic doll )are ready for further processing. Since the units of production method is used to apply costs of the joint process to the units produced, the units go forward with a $25 cost so far. These units are further processed into three main models, Marilyn ( 4500 units), Judy (3300 units) and Sylvia (the remaining 2200). Assume that this product sales mix is not going to change, due to the constraints of demand. The further processing costs are added to the $ 25 to figure out the total per unit production cost. Further costs are as follows: Doll (per unit costs) Marilyn $32 Direct Materials (paint, clothing, etc.,) Direct Labor ( stitching, coloring., etc.,) Variable Manuf. Overhead (util., maint., ) 18 9 Judy $28 15 7 Sylvia $12 7 5 At which point, the dolls are done and ready for sale. The Marilyn models sell for $111, the Judy for $94, and the Sylvia has been marked down lately to $ 63. The selling and administrative costs consist of $150,000 monthly, and a shipping cost of $4 per doll. Recently, Starstruck, Inc., a fellow dollmaker, has stated that it is impressed with the quality of the company's basic doll, and would like to purchase this model from Dance in the Dark, and is willing to pay $40 per each of the basic model they are willing to sell. Starstruck will pay half of the shipping cost on the dolls it buys. How many should Dance in the Dark be willing to sell? Show appropriate calculations to justify your response. Based on your solution, write up a budgeted income statement in good form, based on the information presented above.
Dance in the Dark, Inc., amoung other things, manufactures dolls. The monthly production from an initial joint process is as follows: Costs of initial processing Direct Materials (plastic) Direct Labor (machinists) Variable Overhead (utilities, maint., etc.,) Fixed Manufacturing Overhead (plant cost) $ 55,000. 35,000. 110,000. 50,000. At which point, 10,000 units of product ( the basic doll )are ready for further processing. Since the units of production method is used to apply costs of the joint process to the units produced, the units go forward with a $25 cost so far. These units are further processed into three main models, Marilyn ( 4500 units), Judy (3300 units) and Sylvia (the remaining 2200). Assume that this product sales mix is not going to change, due to the constraints of demand. The further processing costs are added to the $ 25 to figure out the total per unit production cost. Further costs are as follows: Doll (per unit costs) Marilyn $32 Direct Materials (paint, clothing, etc.,) Direct Labor ( stitching, coloring., etc.,) Variable Manuf. Overhead (util., maint., ) 18 9 Judy $28 15 7 Sylvia $12 7 5 At which point, the dolls are done and ready for sale. The Marilyn models sell for $111, the Judy for $94, and the Sylvia has been marked down lately to $ 63. The selling and administrative costs consist of $150,000 monthly, and a shipping cost of $4 per doll. Recently, Starstruck, Inc., a fellow dollmaker, has stated that it is impressed with the quality of the company's basic doll, and would like to purchase this model from Dance in the Dark, and is willing to pay $40 per each of the basic model they are willing to sell. Starstruck will pay half of the shipping cost on the dolls it buys. How many should Dance in the Dark be willing to sell? Show appropriate calculations to justify your response. Based on your solution, write up a budgeted income statement in good form, based on the information presented above.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Dance in the Dark, Inc., amoung other things, manufactures dolls. The monthly
production from an initial joint process is as follows:
Costs of initial processing
Direct Materials (plastic)
Direct Labor (machinists)
Variable Overhead (utilities, maint., etc.,)
Fixed Manufacturing Overhead (plant cost)
$ 55,000.
35,000.
Doll (per unit costs)
Direct Materials ( paint, clothing, etc.,)
Direct Labor ( stitching, coloring., etc.,)
Variable Manuf. Overhead (util., maint., )
110,000.
50,000.
At which point, 10,000 units of product (the basic doll )are ready for further processing.
Since the units of production method is used to apply costs of the joint process to the
units produced, the units go forward with a $25 cost so far. These units are further
processed into three main models, Marilyn (4500 units), Judy (3300 units) and Sylvia
(the remaining 2200). Assume that this product sales mix is not going to change, due to
the constraints of demand. The further processing costs are added to the $ 25 to figure
out the total per unit production cost. Further costs are as follows:
Marilyn
$32
18
9
Judy
$28
15
7
Sylvia
$12
7
5
At which point, the dolls are done and ready for sale. The Marilyn models sell for $111,
the Judy for $94, and the Sylvia has been marked down lately to $ 63. The selling and
administrative costs consist of $150,000 monthly, and a shipping cost of $4 per doll.
Recently, Starstruck, Inc., a fellow dollmaker, has stated that it is impressed with the
quality of the company's basic doll, and would like to purchase this model from Dance in
the Dark, and is willing to pay $40 per each of the basic model they are willing to sell.
Starstruck will pay half of the shipping cost on the dolls it buys. How many should
Dance in the Dark be willing to sell? Show appropriate calculations to justify your
response. Based on your solution, write up a budgeted income statement in good form,
based on the information presented above.
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