Forever Ready Company expects to operate at 90% of productive capacity during May. The total manufacturing costs for May for the production of 40,500 batteries are budgeted as follows: Direct materials $446,100 Direct labor 164,000 Variable factory overhead 46,000 Fixed factory overhead 92,000 Total manufacturing costs $748,100 The company has an opportunity to submit a bid for 2,000 batteries to be delivered by May 31 to a government agency. If the contract is obtained, it is anticipated tha the additional activity will not interfere with normal production during May or increase the selling or administrative expenses. What is the unit cost below which Forever Ready Company should not go in bidding on the government contract? Round your answer to two decimal places. per unit

Forever Ready Company expects to operate at 90% of productive capacity during May. The total manufacturing costs for May for the production of 40,500 batteries are budgeted as follows: Direct materials $446,100 Direct labor 164,000 Variable factory overhead 46,000 Fixed factory overhead 92,000 Total manufacturing costs $748,100 The company has an opportunity to submit a bid for 2,000 batteries to be delivered by May 31 to a government agency. If the contract is obtained, it is anticipated tha the additional activity will not interfere with normal production during May or increase the selling or administrative expenses. What is the unit cost below which Forever Ready Company should not go in bidding on the government contract? Round your answer to two decimal places. per unit

Name: Accepting Business at a Special PriceForever Ready Company expects to
Uploaded: 2024-03-20T06:33:06.000Z
Channel: Bartleby
Description: Accepting Business at a Special PriceForever Ready Company expects to operate at 90% of productive capacity during May. The total manufacturing costs for May for the production of 40,500 batteries arebudgeted as follows:Direct materials$446,100Direc

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Hannibal Steel Company's Transport Services Department provides trucks to haul ore from the company's mine to its two steel mills-the Northern Plant and the Southern Plant. Budgeted costs for the Transport Services Department total $283,800 per year, consisting of $0.17 per ton variable cost and $233,800 fixed cost. The level of fixed cost is determined by peak-period requirements. During the peak period, the Northern Plant requires 58% of the Transport Services Department's capacity and the Southern Plant requires 42%. During the year, the Transport Services Department actually hauled 127,000 tons of ore to the Northern Plant and 61,200 tons to the Southern Plant. The Transport Services Department incurred $356,000 in cost during the year, of which $53,200 was variable and $302,800 was fixed. Required: 1. How much of the Transport Services Department's variable costs should be charged to each plant? 2. How much of the Transport Services Department's fixed costs should be charged to…
Sheffield, Inc. is planning to produce 2,560 units of product in 2022. Each unit requires 3 pounds of materials at $6 per pound and a half hour of labor at $16 per hour. The overhead rate is 75% of direct labor. (a) Your answer has been saved. See score details after the due date. Compute the budgeted amounts for 2022 for direct materials to be used, direct labor, and applied overhead. Direct Materials $ (b) Direct Labor Overhead Standard Cost Save for Later $ $ $ 46080 Compute the standard cost of one unit of product. (Round answer to 2 decimal places, e.g. 52.75.) 20480 15360 Attempts: 1 of 1 used Attempts: 0 of 1 used Submit Answer
The production department of Headstrong Company has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Units to be produced 8,100 9,100 7,100 6,100 In addition, the beginning raw materials inventory for the first quarter is budgeted to be 1,950 kilograms and the beginning accounts payable for the first quarter are budgeted to be $3,490. Each unit requires 3.1 kg of raw material that costs $2.50 per kilogram. Management desires to end each quarter with an inventory of raw materials equal to 10% of the following quarter’s production needs. The desired ending inventory for the fourth quarter is 2,325 kilograms. Management plans to pay for 80% of raw material purchases in the quarter acquired and 20% in the following quarter. Each unit requires 0.6 direct labour-hours, and direct labour-hour workers are paid $19.5 per hour. Required: 1-a. Prepare the company's direct…
Hannibal Steel Company's Transport Services Department provides trucks to haul ore from the company's mine to its two steel mills- the Northern Plant and the Southern Plant. Budgeted costs for the Transport Services Department total $237,500 per year, consisting of $0.22 per ton variable cost and $187,500 fixed cost. The level of fixed cost is determined by peak-period requirements. During the peak period, the Northern Plant requires 64% of the Transport Services Department's capacity and the Southern Plant requires 36% During the year, the Transport Services Department actually hauled 126,000 tons of ore to the Northern Plant and 67,900 tons to the Southern Plant. The Transport Services Department Incurred $363,000 In cost during the year, of which $54,000 was variable and $309,000 was fixed. Required: 1. How much of the Transport Services Department's variable costs should be charged to each plant? 2. How much of the Transport Services Department's fixed costs should be charged to…
Thunder Creek Company uses 2 pounds of direct materials for each unit it produces, at a cost of $4.00 per pound. The company begins the year with 9,500 pounds of material in Raw Materials Inventory. Management desires an ending inventory of 25% of next month's materials requirements Prepare a Direct Materials Budget. (When entering answers in the direct materials budget, use the production budget for your cell references. Enter all values as positive--without a minus sign--in row 31.) 2018 Jan Feb Q1 Total April Budget #3: Direct Materials Budget Budgeted units to be produced Mar 30,800 25,200 19,200 2.00 Direct materials (pounds) per unit 2.00 Direct materials needed for production 50,400 38,400 12,600 2.00 61,600 8,600 Plus: Desired direct materials in ending inventory (pounds) 15,400 Total direct materials needed 51,000 65,800 70,200 Less: Direct materials in beginning inventory (pounds) 9,500 12,600 15,400 Budgeted purchase of direct materials 41,500 53,200 54,800 Direct material…
Sandhill's Recording Studio rents studio time to musicians in two-hour blocks. Each session includes the use of the studio facilities, a digital recording of the performance, and a professional music producer/mixer. Anticipated annual volume is 1.400 sessions. The company has invested $2,073,750 in the studio and expects a return on investment of 20%. Budgeted costs for the coming year are as -follows: Direct materials (tapes, CDs, etc.) Direct labour Variable overhead Fixed overhead Variable selling and administrative expenses Fixed selling and administrative expenses (a) Determine the total cost per session. Total cost per session Per Session $25 380 60 35 Total $1,358,000 707,000
aHRiIh mahufactures pipes and applies manufacturing overhead costs to production at a budgeted indirect-cost rate of $18 per direct labor-hour. The following data are obtained from the accounting records for June 2020: Direct materials $140,000 Direct labor (4,000 hours @ $10/hour) 40,000 Indirect labor 13,000 Plant facility rent 30,000 Depreciation on plant mach. & equip. 22,500 Sales commissions 24,000 Administrative expenses 28,000 For June 2020, manufacturing overhead is O overallocated by $6.500 Ounderallocated by $21.500 ovrcallocated by $21.500
Balcom Enterprises is planning to introduce a new product that will sell for $120 a unit. Manufacturing cost estimates for 28,000 units for the first year of production are: Direct materials $1,372,000. Direct labor $1,008,000 (based on $18 per hour × 56,000 hours). Although overhead has not be estimated for the new product, monthly data for Balcom's total production for the last two years has been analyzed using simple linear regression. The analysis results are as follows: Dependent variable Factory overhead costs Independent variable Direct labor hours Intercept $ 136,000 Coefficient on independent variable $ 5.00 Coefficient of correlation 0.959 R2 0.846 Based on this information, how much is the variable manufacturing cost per unit, using the variable overhead estimated by the regression (assuming that direct materials and direct labor are variable costs)? Multiple Choice $72 $92 $95 $77
The production manager of Rordan Corporation has submitted the following quarterly production forecast for the upcoming fiscal year: Units to be produced Each unit requires 0.75 direct labor-hours, and direct laborers are paid $16.00 per hour. 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 11,000 8,000 8,500 10,800 Required: 1. Prepare the company's direct labor budget for the upcoming fiscal year. (Round "Direct labor time per unit (hours)" answers to 2 decimal places.) Required production in units Direct labor time per unit (hours) Total direct labor-hours needed Direct labor cost per hour Total direct labor cost Rordan Corporation Direct Labor Budget 2nd Quarter 8,000 1st Quarter 11,000 8,250✔✔ Answer is not complete. $ 132,000 6,000 3rd Quarter 8,500 6,375 4th Quarter 10,800 S 96,000 $ 102,000 $ 8,100 129,600 Year
Riverbed Company expects to produce 1,272,000 units of Product XX in 2022. Monthly production is expected to range from 84,800 to 127,200 units. Budgeted variable manufacturing costs per unit are direct materials $5, direct labor $6, and overhead $8. Budgeted fixed manufacturing costs per unit for depreciation are $2 and for supervision are $1. Prepare a flexible manufacturing budget for the relevant range value using 21,200 unit increments. (List variable costs before fixed costs. Activity Level Finished Units RIVERBED COMPANY Monthly Flexible Manufacturing Budget For the Year 2022 84800 106000 127200 Variable Costs Direct Materials $ 424000 530000 636000 Direct Labor Overhead 508800 636000 763200 678400 848000 1017600 Total Variable Costs 1611200 2014000 2416800 Fixed Costs Depreciation Supervision Total Fixed Costs Total Costs +A 424000 424000 424000 424000 636000 2247200 $ 212000 636000 2650000 EA 212000 636000 3052800
Accepting Business at a Special Price Power Serve Company expects to operate at 82% of productive capacity during May. The total manufacturing costs for May for the production of 31,980 batteries are budgeted as follows: Direct materials Direct labor Variable factory overhead Fixed factory overhead Total manufacturing costs The company has an opportunity to submit a bid for 3,000 batteries to be delivered by May 31 to a government agency. If the contract is obtained, it is anticipated that the additional activity will not interfere with normal production during May or increase the selling or administrative expenses. $458,800 168,700 47,278 94,000 $768,778 What is the unit cost below which Power Serve Company should not go in bidding on the government contract? Round your answer to two decimal places. per unit
Katherin, Ltd. is developing their manufacturing overhead budget for May, which is based on budgeted direct labor hours. The variable overhead rate is $16.05 per direct labor hour and 11,552 direct labor hours are budgeted for May. Fixed manufacturing overhead is budgeted at $102,000. All overhead costs are current cash flows except for $15,300 of depreciation. The predetermined overhead rate every month is recomputed every month. What should the predetermined overhead rate for May be? Select one: A. $24.88 B. $26.20 C. $8.83 D. $17.66 E. $17.37