Finch Cameras, Incorporated manufactures two models of cameras. Model ZM has a zoom lens; Model DS has a fixed lens. Finch uses an activity-based costing system. The following are the relevant cost data for the previous month: Direct Cost per Unit Direct materials Direct labor Category Unit level Batch level Product level Facility level Total Estimated Cost Required A Required B Type of Product Model ZM $ 20.40 28.80 Model ZM Model DS Cost Driver $ 25,960 Number of units 48,360 Number of setups Number of TV commercials 90,000 180,000 Number of machine hours $ 344,320 Finch's facility has the capacity to operate 2,700 machine hours per month. Required a. Compute the cost per unit for each product. b. The current market price for products comparable to Model ZM is $119 and for DS is $72. If Finch sold all of its products at the market prices, what was Its profit or loss for the previous month? c. A market expert belleves that Finch can sell as many cameras as it can produce by pricing Model ZM at $114 and Model DS at $33. 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 target cost for each product? Complete this question by entering your answers in the tabs below. Required C Model DS $ 7.00 9.00 Compute the cost per unit for each product. (Round intermediate calculations and final answers to 2 decimal places.) Direct Materials Direct Labor Amount of Cost Driver ZM: 2,450 units; DS: 9,350 units ZM: 26 setups; DS: 26 setups. ZM: 15; DS: 10 ZM: 300 hours; DS: 600 hours < Required A Allocated Overhead $ Total Required B > 0.00 0.00
Finch Cameras, Incorporated manufactures two models of cameras. Model ZM has a zoom lens; Model DS has a fixed lens. Finch uses an activity-based costing system. The following are the relevant cost data for the previous month: Direct Cost per Unit Direct materials Direct labor Category Unit level Batch level Product level Facility level Total Estimated Cost Required A Required B Type of Product Model ZM $ 20.40 28.80 Model ZM Model DS Cost Driver $ 25,960 Number of units 48,360 Number of setups Number of TV commercials 90,000 180,000 Number of machine hours $ 344,320 Finch's facility has the capacity to operate 2,700 machine hours per month. Required a. Compute the cost per unit for each product. b. The current market price for products comparable to Model ZM is $119 and for DS is $72. If Finch sold all of its products at the market prices, what was Its profit or loss for the previous month? c. A market expert belleves that Finch can sell as many cameras as it can produce by pricing Model ZM at $114 and Model DS at $33. 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 target cost for each product? Complete this question by entering your answers in the tabs below. Required C Model DS $ 7.00 9.00 Compute the cost per unit for each product. (Round intermediate calculations and final answers to 2 decimal places.) Direct Materials Direct Labor Amount of Cost Driver ZM: 2,450 units; DS: 9,350 units ZM: 26 setups; DS: 26 setups. ZM: 15; DS: 10 ZM: 300 hours; DS: 600 hours < Required A Allocated Overhead $ Total Required B > 0.00 0.00
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Topic Video
Question
Transcribed Image Text:Finch Cameras, Incorporated manufactures two models of cameras. Model ZM has a zoom lens; Model DS has a fixed lens. Finch uses
an activity-based costing system. The following are the relevant cost data for the previous month:
Direct Cost per Unit
Direct materials
Direct labor
Category
Unit level
Batch level
Product level
Facility level
Total
Estimated
Cost
$ 25,960
48,360
90,000
180,000
$ 344,320
Type of Product
Model ZM
Model DS
Required B
Model ZM
$20.40
28.80
Cost Driver
Number of units.
Number of setups.
Number of TV commercials
Number of machine hours
Finch's facility has the capacity to operate 2,700 machine hours per month.
Required
a. Compute the cost per unit for each product.
b. The current market price for products comparable to Model ZM IS $119 and for DS is $72. If Finch sold all of its products at the
market prices, what was its profit or loss for the previous month?
c. A market expert belleves that Finch can sell as many cameras as it can produce by pricing Model ZM at $114 and Model DS at $33.
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 target
cost for each product?
Required C
Complete this question by entering your answers in the tabs below.
+
Model DS
Required A
Compute the cost per unit for each product. (Round intermediate calculations and final answers to 2 decimal places.)
Direct
Materials
Direct
Labor
$7.00
9.00
< Required A
Amount of Cost Driver
ZM: 2,450 units; DS: 9,350 units
ZM: 26 setups; DS: 26 setups
ZM: 15; DS: 10
ZM: 300 hours; DS: 600 hours
Allocated
Overhead
S
Total
Required B >
0.00
0.00
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