Kilmer Company's customer demand for its only product exceeds its manufacturing capacity. The company provided the followinginformation for the machine whose limited capacity is prohibiting the company from producing and selling additional units:Actual run time this weekMachine time available per weekActual run rate this weekIdeal run rateDefect-free output this weekTotal output this week (including defects)Answer is complete but not entirely correct.70.38 X70.00 *69.77 X32.21 X1-a. Utilization rate1-b. Efficiency rate.1-c. Quality rate1-d. Overall equipment effectiveness2-a. Utilization loss in unitsRequired:1. and 2. With respect to the company's overall equipment effectiveness, calculate the following:Note: Do not round intermediate calculations. Round final answers to 2 decimal places and "Units" answers to the nearest wholenumber.2-b. Efficiency loss in units2-c. Quality loss in units18,550 minutes26,500 minutes4.20 units per minute47,70074,25023,3736 units per minute54,537 units77,910 units

Efficiency loss in units: This is an amount of production lost due to the inefficiencies in the…

Answered: Kilmer Company's customer demand for…

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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Problem 6-18 (Algo) Relevant Cost Analysis in a Variety of Situations [LO6-2, LO6-3, LO6-4] Andretti Company has a single product called a Dak. The company normally produces and sells 87,000 Daks each year at a selling price of $60 per unit. The company's unit costs at this level of activity are given below: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Total cost per unit $ 7.50 8.00 2.90 5.00 ($435,000 total) 2.70 2.50 ($217,500 total) $28.60 A number of questions relating to the production and sale of Daks follow. Each question is independent. Required: 1-a. Assume that Andretti Company has sufficient capacity to produce 113,100 Daks each year without any increase in fixed. manufacturing overhead costs. The company could increase its unit sales by 30% above the present 87,000 units each year if it were willing to increase the fixed selling expenses by $110,000. What is the financial…
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Futura Company purchases 80,000 starters from a supplier at $9.90 per unit that it installs in farm tractors. Due to a reduction in output, the company now has enough idle capacity to produce the starters rather than buying them from the supplier. However, the company's chief engineer is opposed to making the starters because the production cost per unit is $10.80, as shown below: Direct materials Direct labor Supervision Depreciation Variable manufacturing overhead Per Unit Total $ 4.00 2.20 1.90 $ 152,000 1.50 $ 120,000 0.70 0.50 $ 10.80 $ 40,000 Rent Total product cost If Futura decides to make the starters, a supervisor would be hired (at a salary of $152,000) to oversee production. However, the company has sufficient idle tools and machinery such that no new equipment would have to be purchased. The rent charge above is based on space utilized in the plant. The total rent on the plant is $87,000 per period. Required: What is the financial advantage (disadvantage) of making the…
Facts and circumstances: A company produces three different products on several identical machines. The annual capacity is restricted to 12,000 machine hours. The controller has prepared the following overview. Please help her to find out the product mix with the maximum contribution possible using the form below: Required: Which quantities of X, Y and Z should be produced and what would be the maximum contribution? Components Sales price Variable costs Allocated fixed costs Total cost Machine hours per unit Estimated sales demand (units) X 90 40 30 70 3 2,50 0 Y Z Control 80 70 20 40 30 30 50 70 2.5 1,00 0 2 2,50 0
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Futura Company purchases the 71,000 starters that it installs in its standard line of farm tractors from a supplier for the price of $12.70 per unit. Due to a reduction in output, the company now has idle capacity that could be used to produce the starters rather than buying them from an outside supplier. However, the company's chief engineer is opposed to making the starters because the production cost per unit is $12.90 as shown below: Direct materials Direct labor Supervision Depreciation Variable manufacturing overhead Rent Total product cost Per Unit $ 6.00 3.00 1.50 1.30 0.70 0.40 $ 12.90 Total If Futura decides to make the starters, a supervisor would have to be hired (at a salary of $106,500) to oversee production. However, the company has sufficient idle tools and machinery such that no new equipment would have to be purchased. The rent charge above is based on space utilized in the plant. The total rent on the plant is $84,000 per period. Depreciation is due to obsolescence…
Gallerani Corporation has received a request for a special order of 6,000 units of product A90 for $21.20 each. Product A90's unit product cost is $16.20, determined as follows: Direct materials Direct labor $ 6.10 4.20 Variable manufacturing overhead Fixed manufacturing overhead 2.30 3.60 Unit product cost $16.20 Assume that direct labor is a variable cost. The special order would have no effect on the company's total fixed manufacturing overhead costs. The customer would like modifications made to product A90 that would increase the variable costs by $4.20 per unit and that would require an investment of $21,000 in special molds that would have no salvage value. This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order. The annual financial advantage (disadvantage) for the company as a result of accepting this special order should be:
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Capitol, Incorporated, has received a special order for 2,080 units of its product at a special price of $158. The product normally sells for $208 and has the following manufacturing costs: Cost per Unit Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total unit cost $ 58 38 28 48 $ 172 Assume that Capitol has sufficient capacity to fill the order without harming normal production and sales. Required: a. If Capitol accepts the order, what effect will the order have on the company's short-term profit? b. What minimum unit price should Capitol charge to achieve a $48,000 incremental profit? c. Now, assume Capitol is currently operating at full capacity and cannot fill the order without harming normal production and sales. If Capitol accepts the order, what effect will the order have on the company's short-term profit? Complete this question by entering your answers in the tabs below. Required A Required B Required C If Capitol accepts the order,…
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