86Finch Cameras, Incorporated manufactures two models of cameras. Model ZM has a zoom lens; Model DS has a fixed lens. Finch usesan activity-based costing system. The following are the relevant cost data for the previous month:Direct Cost per UnitDirect materialsDirect laborCategoryUnit levelBatch levelProduct levelFacility levelTotalEstimatedCost$ 24,00047,00087,500270,000$ 428,500Model 2MModel DS$ 10.5013.00$ 20.5029.00Cost DriverNumber of unitsNumber of setupsNumber of TV commercialsNumber of machine hoursAmount of Cost DriverZM: 2,450 units; DS: 9,550 unitsZM: 25 setups; DS: 25 setupsZM: 14; DS: 11ZM: 500 hours; DS: 1,000 hoursFinch's facility has the capacity to operate 4,500 machine hours per month.Requireda. Compute the cost per unit for each product.b. The current market price for products comparable to Model ZM is $129 and for DS is $80. If Finch sold all of its products at themarket prices, what was its profit or loss for the previous month?c. A market expert believes that Finch can sell as many cameras as it can produce by pricing Model ZM at $124 and Model DS at $45.Finch would like to use those estimates as its target prices and have a profit margin of 30 percent of target prices. What is the targetcost for each product?Answer is complete but not entirely correct.Complete this question by entering your answers in the tabs below.Required A Required BRequired CThe current market price for products comparable to Model ZM is $129 and for DS is $80. If Finch sold all of its products atthe market prices, what was its profit or loss for the previous month? (Round intermediate calculations to 2 decimal places.Loss amounts should be indicated by a minus sign.)Model ZMModel DSProfitProfitAmount1129

Activity-based costing:Activity-based costing is a cost allocation method used to allocate the…

Direct Cost per Unit Direct materials Direct labor Category Unit level Batch level Estimated Cost $ 24,000 Product level 47,000 87,500 270,000 Model 2M $ 20.50 29.00 Model DS $ 10.50 13.00 Cost Driver Number of units Number of setups Number of TV commercials Number of machine hours Amount of Cost Driver ZM: 2,450 units; DS: 9,550 units ZM: 25 setups; DS: 25 setups ZM: 14; DS: 11 ZM: 500 hours; DS: 1,000 hours Facility level Total $ 428,500 ch's facility has the capacity to operate 4,500 machine hours per month.

Direct Cost per Unit Direct materials Direct labor Category Unit level Batch level Estimated Cost $ 24,000 Product level 47,000 87,500 270,000 Model 2M $ 20.50 29.00 Model DS $ 10.50 13.00 Cost Driver Number of units Number of setups Number of TV commercials Number of machine hours Amount of Cost Driver ZM: 2,450 units; DS: 9,550 units ZM: 25 setups; DS: 25 setups ZM: 14; DS: 11 ZM: 500 hours; DS: 1,000 hours Facility level Total $ 428,500 ch's facility has the capacity to operate 4,500 machine hours per month.

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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Bowie Inc., a manufacturer of earnings, has accumulated the following cost information for products A and B: Production volume Engineering costs incurred Engineering costs per batch Batch size Total direct manufacturing labor hours Direct manufacturing labor hours/unit A $2.67 $4.00 $1.60 B $2.14 $3.00 500 $1.50 $2,000 $800 200 750 1.5 B 1,000 Assuming activity-based costing (ABC) is used, what is the engineering cost per unit for products A and B? $3,000 $1,500 500 1,400 Total $5,000 2,150
Total Amount Units Sales Variable Costs: 31,250 Per Unit $ 445,313 $ 14.25 Direct Materials $ 125,000 4.00 = Direct Labor $ 28,000 0.90 = Variable Manufacturing Overhead $ 66,250 2.12 = Sales Commissions $ 15,625 0.50 = Shipping Variable Billing Total Variable Costs $ 3,125 0.10 $ 313 0.01 $ 238,313 7.63 Contribution Margin $ 207,000 6.62 Fixed Costs: Fixed Manufacturing Overhead Advertising Sales and Admin. Salaries Fixed Billing Total Fixed Costs Net Operating Income (Loss) 40,000 16,800 87,300 10,000 154,100 $ 52,900 F. Using the budgeted contribution margin income statement in part E. above, calculate the following: a. Breakeven in units: b. Operating Leverage Multiplier: Given a sales volume increase of 8%, operating income will increase by: c. Percent: d. Dollars: #N/A #N/A #N/A #N/A
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Activity Rates and Product Costs using Activity-Based Costing Lonsdale Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures. These activities and their associated budgeted activity costs and activity bases are as follows: Budgeted Activity Activity Cost Activity Base Casting $215,160 Machine hours Assembly 189,550 Direct labor hours Inspecting 30,520 Number of inspections Setup 39,730 Number of setups Materials handling 36,960 Number of loads Corporate records were obtained to estimate the amount of activity to be used by the two products. The estimated activity-base usage quantities and units produced follow: Activity Base Entry Dining Total Machine hours 5,180 4,600 9,780 Direct labor hours 4,460 6,690 11,150 Number of inspections 1,660 520 2,180 Number of setups 230 60 290 Number of loads 700 180 880 Units produced 10,400 5,200 15,600 a. Determine the activity rate for each activity. If required, round the rate to the…
Urban Company reports the following information regarding its production cost: Units produced Direct labor Direct materials Variable overhead Fixed overhead Compute product cost per unit under variable costing. Multiple Choice O $24.00 $47.46 $54.00 26,000 units $ 19 per unit $ 24 per unit $ 11 per unit $ 116,000 in total $19.00
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Production and cost data Production and sales units Selling price (per unit) Materials (per unit) Labor (per unit) Manufacturing overheads Dept. A Standrad 192000 24000 $15 1.7 4.3 Dept. B Designer wear Number of machine set-ups 4 Marketing overheads $50 8 14.2 24 Engineering and PC Marketing and CS 745200 1296000 Use single-rate; direct method to allocate engineering and marketing overheads Engineering overheads include machine setting ($460,800) and inspection ($284,400) activities. Marketing involves channel ($496,000) and branding ($800,000) activities. The inspection and channel costs are driven by the number of units produced & sold. Computing product costs and profits under conventional and ABC approaches