Information from Stellar Construction Group's first yearof operations is available below:Sales in units7,600Production in unitsManufacturing costs:Direct labor9,000$2.75 per unit|Direct material$5.00 per unit|Variable overhead$1.90 per unitFixed overhead$90,000SG&A costs:Variable Cost$5.00 per unit|Fixed cost$80,000Sales price per unit$55Create an income statement using absorption costing.Create a contribution margin income statement using variable costing .

Hello student! The main difference between Absorption costing and Variable costing is the…

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Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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Big State University (BSU) is considering whether or not itshould outsource its housekeeping service. Currently, BSUemploys 400 housekeepers at an average annual wage of $23,000plus another 39 percent for fringe benefits. Annual fixed costsassociated with housekeeping are $1,278,800.Eric’s Efficient Cleaners (EEC) will provide similarhousekeeping for a fixed annual cost of $7,500,000 plus avariable cost of $20,000 per housekeeper required. Because Ericuses state-of-the-art equipment and well-trained employees,his company would need only 80 percent of the current BSUhousekeeper staff (or 320 housekeepers).(a) Calculate the annual cost of BSU using its currenthousekeeping staff.(b) Calculate the annual cost if BSU lets EEC do thehousekeeping.(c) Find the indifference point for the two alternatives
I need help with this cost accounting problem.
Mary Williams, owner of Williams Products, is evaluating whether to introduce a new product line. After thinking through the production process and the costs of raw materials and new equipment, Williams estimates the variable costs of each unit produced and sold at $8 and the fixed costs per year at $70,000. If the selling price is set at $22 each, how many units must be produced and sold for Williams to break even? Use algebraic approach to get your answer.
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A small manufacturing produces certain product at a labor cost of $ 10.00 and material cost of $15 per unit. The fixed charges on the business are $10,000 a month, and variable costs businesse are $10,000 a month, and variable costs besides costs of materials and labor are $8.00 per unit. The products are sold wholesale at $63.00 each. 1) what is the breakeven sales volume of the company? 2) If for every 10 units produced comes out defective and has to be rejected with only full recovery of materials, what should be the break-even point sales volume?
Andrew Manufacturing held an average inventory of $1.5 million (raw materials, work-in-process, finished goods) last year. Its sales were $8.5 million, and its cost of goods sold was $6.2 million. The firm operates 290 days a year. What is the inventory days’ supply? What target inventory level is necessary to reach a 15- and 10-day inventory days supply during the next two years?
Discuss the following OM decision strategies. Please post in at least 5 days and substantially covering the topics. 1. Human resource 2. Supply chain 3. Inventory 4. Maintenance 5. Your best learning experience 5. Final project 6. Final quiz.
Deforrest Marine Motors manufactures engines for the speedboat racing circuit. As part of their annual planning cycle, they forecasted demand for the next four quarters. The number of available days of production and the anticipated demand are given below. Employees Production Rate Production Cost Backorder Cost Overtime Cost Overtime Limit Demand Q1 2,400 6,019,000 They also estimated many of the costs required to conduct operations planning. Some of these key figures are listed below. 30 70 units/employee/quarter Q2 2,200 $1,000/unit $200/unit/quarter $1,500/unit <= 25% of Reg. Production Q3 1,700 Q4 1,800 Hire Cost Fire Cost Subcontracting Cost Subcontracting Limit Inventory Cost Initial Inventory $1,200/employee $800/employee $1,800/unit 400 units maximum $100/unit/quarter 280 units Deforrest Marine Motors wishes to maintain the current number of employees for the entire year to follow a level strategy balanced with inventory and backorders as needed. What is the total cost of this…
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The Vera Molding company has two alternatives for meeting a customer requirement for 9,500 units of a specialty molding. If done in-house, fixed cost would be $300,000 with variable cost at $40 per unit. Alternative two is to outsource for a total cost of $80 per unit. What is the break-even quantity? Round your answer to the nearest whole number. units Should the firm make the 9,500 units in-house or outsource? Firm should produce the molding .

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