IYour Company produces a single product. The cost of producing and selling a single unit of thisproduct at the company's normal activity level of 40,000 units per month is as follows:Direct materials.Direct labor$53.60$5.30$1.40Variable manufacturing overheadFixed manufacturing overhead..............$13.20Variable selling and administrative expense.... $1.60Fixed selling and administrative expense.... .$9.10The normal selling price of the product is $91.60 per unit. An order has been received from anoverseas customer for 3,000 units to be delivered this month at a special discounted price. Thisorder would have no effect on the company's normal sales and would not change the totalamount of the company's fixed costs. The variable selling and administrative expense would be$1.00 less per unit on this order than on normal sales. Direct labor is a variable cost in thiscompany.Suppose there is ample idle capacity to produce the units required by the overseas customer andthe special discounted price on the special order is $81.90 per unit. By how much would thisspecial order increase (decrease) the company's net operating income for the month?Con(1-2

Step 1: Determining the Change in Operating Income Due to a Special Order:Firms usually accept…

Answered: I Your Company produces a single…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 2PB: The following product costs are available for Kellee Company on the production of eyeglass frames:...

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The following product costs are available for Kellee Company on the production of eyeglass frames: direct materials, $32,125; direct labor, $23.50; manufacturing overhead, applied at 225% of direct labor cost; selling expenses, $22,225; and administrative expenses, $31,125. The direct labor hours worked for the month are 3,200 hours. A. What are the prime costs? B. What are the conversion costs? C. What is the total product cost? D. What is the total period cost? E. If 6.425 equivalent units are produced, what is the equivalent material cost per unit? F. What is the equivalent conversion cost per unit?
The following product Costs are available for Haworth Company on the production of chairs: direct materials, $15,500; direct labor, $22.000; manufacturing overhead, $16.500; selling expenses, $6,900; and administrative expenses, $15,200. What are the prime costs? What are the conversion costs? What is the total product cost? What is the total period cost? If 7,750 equivalent units are produced, what is the equivalent material cost per unit? If 22,000 equivalent units are produced, what is the equivalent conversion cost per unit?
Cool Pool has these costs associated with production of 20,000 units of accessory products: direct materials, $70; direct labor, $110; variable manufacturing overhead, $45; total fixed manufacturing overhead, $800,000. What is the cost per unit under both the variable and absorption methods?
Steeler Towel Company estimates its overhead to be $250,000. It expects to have 100,000 direct labor hours costing $2,500,000 in labor and utilizing 12,500 machine hours. Calculate the predetermined overhead rate using: A. Direct labor hours B. Direct labor dollars C. Machine hours
Make or by product.Montrose incorportaion manufactures part 345 for use in one of its main products. normal annual production for part 345 is 100,000 units. the cost for 100 units lot for the part follows: Direct direct labor............100 Factory overhead: material.…….…….……....$260 variable............ 120 fixed...............160 total cost per 100 units....640 kalispel incorporation has offered to sell Montrose all 100,000 units it will need during coming year for $600 per 100 units. if montrose accepts the offer from kalispiel, the facilities used to manufacure part 345 can be used in production of part 789. this change would save montrose $90000 in fixed cost related to the rental of capacity neccessary to produce part 789. in addition a $50000 cost item included in factory overhead which specifically related to part 345( rental of special equipment not usable in manufacturing of other products) would be eliminated. Required. determine whether or not Montrose incorporataion make…
A company manufactures a product with three models, each with different direct material costs and labour hour required and monthly production volume as follows: Model A Model B Model C |Units of production Labour hour required | Direct material costs 1,700 1,200 0.6 1,100 0.3 0.7 30 40 50 Labor rate is $10 per hour. The total manufacturing overhead is estimated to be $103,000 per month. Required: a) The manufacturing overhead is allocated to the three models based on labor hour. Compute the pre-determined overhead rate and the unit product cost of Model A. b) The company is considering to use the activity-based costing and gathers the following data related to the cost and activities: Expected Activity Activity Cost Pool Overhead Costs Model A Model B Model C Activity 1 $30,000 1,000 600 400 Activity 2 General Factory $17,000 1,700 200 100 $56.000 510 660 230 Total $103.000 i. Compute the activity rate for each activity. ii. Compute the unit product costs of Model A and Model B.
Your Company produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 30,000 units per month is as follows: Direct materials. Direct labor Variable manufacturing overhead. Fixed manufacturing overhead.. Variable selling & administrative expense Fixed selling & administrative expense. $20.40 $8.70 S1.20 $10.60 $2.60 $5.90 The normal selling price of the product is $51.10 per unit. Current demand is 25,000 units. An order has been received from an overseas customer for 3,000 units to be delivered this month at a special discounted price of $44.70 per unit This order would have no effect on the company's normal sales and would not change the total amount of the company's fixed costs. The variable selling and administrative expense would be $0.50 less per unit on this order than on normal sales. By how much would this special order increase (decrease) the company's net operating income for the month? It the change…
Your Company makes three products in a single facility. These products have the following unit product costs: Product A Product B Product C Direct material $26.00 $26.00 $27.00 Direct labor 15.00 17.00 16.00 Variable manufacturing overhead 4.00 5.00 6.00 Fixed manufacturing overhead 21.00 28.00 23.00 Unit cost $66.00 $76.00 $72.00 Additional data concerning these products are listed below: Product A Product B Product C Mixing minutes per unit 3 2 2.5 Selling price per unit $76.00 $90.00 $84.00 Variable selling cost per unit $4.00 $3.00 $5.00 Monthly demand in units 1,500 3,000 4,000 The mixing machines are potentially the constraint in the production facility. A total of 18,000 minutes is available per month on these machines. Direct labor is a variable cost in this company. Required: How many minutes of mixing machine time would be required to satisfy demand for all three products?
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Sheddon Industries produces two products. The products' identified costs are as follows: Direct materials. Direct labor Multiple Choice The company's overhead costs of $55,000 are allocated based on direct labor cost. Assume 5,000 units of product A and 6,000 units of product B are produced. What is the cost per unit for product B? Note: Do not round intermediate calculations. $12.56 $14.56 Product A $ 21,000 15,000 $14.19 Product B $ 16,000 25,000
Calculate the cost per unit
Rogen Corporation manufactures a single product. The standard cost per unit of product is shown below. Direct materials—1 pound plastic at $6.00 per pound $ 6.00 Direct labor—2.0 hours at $12.20 per hour 24.40 Variable manufacturing overhead 15.00 Fixed manufacturing overhead 13.00 Total standard cost per unit $58.40 The predetermined manufacturing overhead rate is $14.00 per direct labor hour ($28.00 ÷ 2.0). It was computed from a master manufacturing overhead budget based on normal production of 10,000 direct labor hours (5,000 units) for the month. The master budget showed total variable costs of $75,000 ($7.50 per hour) and total fixed overhead costs of $65,000 ($6.50 per hour). Actual costs for October in producing 3,400 units were as follows. Direct materials (3,600 pounds) $ 22,320 Direct labor (6,650 hours) 83,790 Variable overhead 66,638 Fixed overhead 30,462 Total manufacturing costs $203,210 The purchasing department…

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