Gelb Company currently makes a key part for its main product. Making this part incurs per unit variable costs of $1.45 for directmaterials and $1.00 for direct labor. Incremental overhead to make this part is $1.50 per unit. The company can buy the part for $4.15per 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 AnalysisDirect materialsDirect laborOverheadCost to buyCost per unitMakeBuyCost difference(b) Company should:

Detailed explanationa. Make or buy analysis involves comparing cost to manufacture the product with…

Answered: Gelb Company currently makes a key part…

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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Ship Co. produces storage crates that require 1.2 meters of material at $.85 per meter and 0.1 direct labor hours at $15.00 per hour. Overhead is applied at the rate of $9 per direct labor hour. What is the total standard cost for one unit of product that would appear on a standard cost card?
Ptarmigan Company produces two products. Product A has a contribution margin of $20 and requires 4 machine hours. Product B has a contribution margin of $18 and requires 3 machine hours. Determine the most profitable product assuming the machine hours are the constraint. Contribution margin per machine hour: Product A $fill in the blank 1 Product B $fill in the blank 2 Product is the most profitable.
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Sunland Corporation produces outdoor portable fireplace units. The following cost information per unit is available: direct materials $20, direct labour $14, variable manufacturing overhead $17, fixed manufacturing overhead $24, variable selling and administrative expenses $9, and fixed selling and administrative expenses $16. The company's ROI per unit is $17. (a) Calculate Sunland Corporation's markup percentage using absorption-cost pricing. (Round answer to 2 decimal places, e.g. 15.25%.) Markup percentage eTextbook and Media Save for Later % (b) The parts of this question must be completed in order. This part will be available when you complete the part above.
Pharoah Enterprises is considering manufacturing a new product. It projects the cost of direct materials and rent for a range of output as follows. Output in Units 1,000 2,000 Rent Cost $6,940 6,940 3,000 11,104 4,000 11,104 5,000 11,104 6,000 11,104 7,000 11,104 8,000 11,104 9,000 13,880 10,000 13,880 11,000 13,880 Direct Materials $5,550 6,000 6,000 8,000 10,000 12,000 14,000 16,000 40,668 48,580 61,072
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Fleurant, Inc., manufactures and sells two products: Product W2 and Product P8. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Expected Production Direct Labor-Hours Per Unit Total Direct Labor-Hours Product W2 400 5 2,000 Product P8 500 4 2,000 Total direct labor-hours 4,000 The direct labor rate is $37.10 per DLH. The direct materials cost per unit is $203.60 for Product W2 and $140.30 for Product P8. The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Estimated Expected Activity Activity Cost Pools Activity Measures Overhead Cost Product W2 Product P8 Total Labor-related DLHs $ 218,576 2,000 2,000 4,000 Production orders orders 18,538 400 380 780 Order size MHs 202,886 3,880 3,680 7,560 $ 440,000 Which of the…
Jamison Company uses the total cost method of applying the cost-plus approach to product pricing. Jamison produces and sells Product X at a total cost of $800 per unit, of which $540 is product cost and $260 is selling and administrative expenses. In addition, the total cost of $800 is made up of $460 variable cost and $340 fixed cost. The desired profit is $168 per unit. Determine the markup percentage on total cost. %
Windhoek Manufacturers produces two products, Amber and Black. The following cost estimates have been prepared using the traditional absorption costing approach. Selling price per unit Production costs per unit: Material costs Direct labour costs Manufacturing overhead cost Profit per unit Additional information. Estimates sales demand Machine hours per unit Required 1.1 1.2 Amber N$ Amber 69 27 6 12 24 9 000 0.75 Calculate the return per machine hour for each product if through put accounting approach is used. Calculate the profit for the period, using a throughput accounting approach, assuming the company priorities Black Black N$ Black 93 24 15 18 36 12 000 1.20 TIOLE.(
Skolnick Corporation has provided the following information: Cost per Unit Cost per Period Direct materials $ 6.00 Direct labor $ 4.20 Variable manufacturing overhead $ 1.30 Fixed manufacturing overhead $ 126,000 Sales commissions $ 1.50 Variable administrative expense $ 0.35 Fixed selling and administrative expense $ 41,400 Required: a. If 9,000 units are produced, what is the total amount of direct manufacturing cost incurred? (Do not round intermediate calculations.) b. If 9,000 units are produced, what is the total amount of indirect manufacturing costs incurred?
Required information [The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $205 and $164, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 127,000 units of each product. Its unit costs for each product at this level of activity are given below: Direct materials Direct labour Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Cost per unit Contribution margin per pound Alpha $40 Alpha 37 24 Beta 32 29 32 $194 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are deemed unavoidable and have been allocated to products based on sales dollars. Beta $ 24 30 22 12. What contribution margin per pound of raw material is earned by Alpha and Beta? (Round your answers to 2 decimal places.)…

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