Jobs, Inc. has recently started the manufacture of Tri-Robo, a three-wheeled robot that can scan a home for fires and gas leaks andthen transmit this information to a smartphone. The cost structure to manufacture 20,000 Tri-Robos is as follows.Direct materials ($50 per robot)Direct labor ($40 per robot)Variable overhead ($6 per robot)Allocated foxed overhead ($30 per robot)TotalDirect materialDirect laborJobs is approached by Tienh Inc, which offers to make Tri-Robo for $115 per unit or $2,300,000Following are independent assumptionsVariabile overheadAssume that $405,000 of the foxed overhead cost can be avoided. (Enter negative amounts using either a negative sign preceding themumber a 45 or parentheses es (45))Fled overheadPurchase priceCostS$1.000.000800,000120,000Make600,000$2,520,000BuyNet IncomeIncrease(Decrease)

This question is related to the Make and Buy Decision, in which the cost manager compares the making…

Jobs, Inc. has recently started the manufacture of Tri-Robo, a three-wheeled robot that can scan a home for fires and gas leaks and then transmit this information to a smartphone. The cost structure to manufacture 20,000 Tri-Robos is as follows. Direct materials ($50 per robot) Direct labor ($40 per robot) Variable overhead ($6 per robot) Allocated foxed overhead ($30 per robot) Total Direct material Direct labor Variabile overhead Fed overhead Cost Jobs is approached by Tienh Inc, which offers to make Tri-Robo for $115 per unit or $2,300,000 Following are Independent assumptions Purchase price $1.000.000 800,000 Assume that $405,000 of the foxed overhead cost can be avoided. (Enter negative amounts using either a negative sin preceding the mumber a 45 or parentheses (45)) Make 120,000 600,000 $2,520,000 Buy Net Income Increase (Decrease

Jobs, Inc. has recently started the manufacture of Tri-Robo, a three-wheeled robot that can scan a home for fires and gas leaks and then transmit this information to a smartphone. The cost structure to manufacture 20,000 Tri-Robos is as follows. Direct materials ($50 per robot) Direct labor ($40 per robot) Variable overhead ($6 per robot) Allocated foxed overhead ($30 per robot) Total Direct material Direct labor Variabile overhead Fed overhead Cost Jobs is approached by Tienh Inc, which offers to make Tri-Robo for $115 per unit or $2,300,000 Following are Independent assumptions Purchase price $1.000.000 800,000 Assume that $405,000 of the foxed overhead cost can be avoided. (Enter negative amounts using either a negative sin preceding the mumber a 45 or parentheses (45)) Make 120,000 600,000 $2,520,000 Buy Net Income Increase (Decrease

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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Howrley-David, Inc., manufactures two models of motorcycles: the Fatboy and the Screamer. Both models are assembled in the same plant and require the same assembling operations. The difference between the models is the cost of materials. The following data are available for August: Number of units assembled Materials cost per unit Other costs: Direct labor Indirect materials Other overhead Operation cost Materials cost Total cost Number of units Unit cost Fatboy 1,050 $ 2,400 $3,400 Fatboy Screamer 2,100 Required: Howrley-David uses operations costing and assigns conversion costs based on the number of units assembled. Compute the cost of each model assembled in August. Screamer Total Total 3,150 $3,591,000 598,500 1,795,500
Vijay
Tri-bikes manufactures two different levels of bicycles: the Standard and the Extreme. The total overhead of $300,000 has traditionally been allocated by direct labor hours, with 150,000 hours for the Standard and 50,000 hours for the Extreme. After analyzing and assigning costs to two cost pools, it was determined that machine hours is estimated to have $200,000 of overhead, with 4,000 hours used on the Standard product and 1,000 hours used on the Extreme product. It was also estimated that the setup cost pool would have $100,000 of overhead, with 1,000 hours for the Standard and 1,500 hours for the Extreme. Required: Calculate the amount of overhead assigned per product, under traditional and under ABC costing.
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Gerber Clothing Inc. has designed a rain suit for outdoor enthusiasts that is about to be introduced on the market. A standard cost card has been prepared for the new suit, as follows: Standard Quantity or hours Standard price or Rate Standard Direct materials 2.2 metres Direct labour 1.0 hours Manufacturing overhead (1/6 variable) 1.0 hours $ 15 per metre 33 per hour 21 per hour Cost $33.00 Total standard cost per suit 33.00 21.00 $87.00 a. The only variable selling and administrative costs will be $6 per suit for shipping. Fixed selling and administrative costs will be as follows (per year): Salaries Advertising and other Total $ 35,400 157,000 $192,400 b. Since the company manufactures many products, it is felt that no more than 10,500 hours of labour time per year can be devoted to production of the new suits. c. An investment of $550,000 will be necessary to carry inventories and accounts receivable and to purchase some new equipment. The company wants a 20% ROI in new product…
Lakeside Inc. manufactures four lines of remote control boats and uses activity-based costing to calculate product cost. Activity Cost Pools EstimatedTotal Cost Estimated Cost Driver Machining $ 334,000 13,600 machine hours Setup 76,000 420 batches Quality control 103,000 830 inspections Compute the activity rates for each of the following activity cost pools: How do you find the activitiy costs???
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Marvel Parts, Incorporated, manufactures auto accessories. One of the company's products is a set of seat covers that can be adjusted to fit nearly any small car. The company has a standard cost system in use for all of its products. According to the standards that have been set for the seat covers, the factory should work 1,005 hours each month to produce 2,010 sets of covers. The standard costs associated with this level of production are: Direct materials Direct labor Variable manufacturing overhead (based on direct labor-hours) Direct materials (6,000 yards) Direct labor Variable manufacturing overhead Total $28,542 $ 8,040 $ 3,618 During August, the factory worked only 1,200 direct labor-hours and produced 2,600 sets of covers. The following actual costs were recorded during the month: Per Set of Covers $ 14.20 4.00 Total $ 35,100 $ 10,920 $ 5,460 1. Materials price variance 1. Materials quantity variance 2. Labor rate variance 1.80 $ 20.00 2. Labor efficiency variance 3. Variable…
Becton Labs, Inc., produces vorious chemical compounds for industrial use. One compound, called Fludex, is prepared using an elaborate distilling process. The company has developed standard costs for one unit of Fludex, es follows: Standard Quantity or Hours Standard Price or Rate $20.00 per ounce Standard Cost Direct materials 2.5 ounces $ 5e.ee Direct labor 1.4 hours $22.58 per hour 31.50 Variable manufacturing overhead Total standard cost per unit 1.4 hours $ 3.50 per hour 4.90 $ 86.48 During November, the following sctivity was recorded related to the production of Fludex: a. Materials purchased, 12,000 ounces at a cost of $225,000. b. There was no beginning inventory of materials; however, at the end of the month, 2,500 ounces of material remained in ending inventory. c. The company employs 35 lab technicians to work on the production of Fludex. During November, they each worked an average of 160 hours at en average pay rate of $22 per hour. d. Variable manufacturing overhesd is…
Tri-Bikes manufactures two different levels of bicycles - the Standard and the Extreme. The total overhead of $300,000 has traditionally been allocated by direct labor hours, with 150,000 hours for the Standard and 50,000 hours for the Extreme. After analyzing and assigning costs to two cost pools, it was determined that machine hours is estimated to have $180,000 of overhead, with 4,000 hours used on the Standard product and 1,000 hours used on the Extreme product. It was also estimated that the setup cost pool would have $120,000 of overhead, with 1,000 hours for the Standard and 1,500 hours for the Extreme. PLEASE NOTE: Predetermined overhead rates will be rounded to two decimal places and shown with "$" and commas as needed (i.e. $1,234.56). The rates will include their proper label according to the textbook examples (no abbreviations). All dollar amounts are rounded to whole dollars and shown with "$" and commas as needed (i.e. $12,345). What is the overhead cost per product,…
Lakeside Accessories manufactures computer backpacks, messenger bags, and other items for carrying electronics, documents, and so on. In developing a new bag for the newest release of laptops, the design group has estimated the following unit costs: Fabric Leather Direct labor hours - Sewing Direct labor hours Assembly $33 14 1.4 1.0 Direct labor at Lakeside Accessories earns $32 per hour for sewing and $27 per hour for assembly. Overhead is estimated for new products at 40 percent of direct labor cost. Lakeside has a target operating profit of 19 percent (as a percentage of costs) on this type of product. The marketing team has estimated that a price of $167 is expected for the bag. Required: a-1. What is the profit as a percentage of cost achieved under this alternative? a-2. Will Lakeside Accessories achieve the target operating profit for this product? have all the labor b-1. The product manager, who is the company's main advocate for this new design, tells you that the he plans…