Mahogany Company manufactures computer keyboards. The total cost of producing 13,000 keyboards is $390,000. The total fixed cost amounts to $130,000. Determine the total cost of manufacturing 27,000 keyboards.

Mahogany Company manufactures computer keyboards. The total cost of producing 13,000 keyboards is $390,000. The total fixed cost amounts to $130,000. Determine the total cost of manufacturing 27,000 keyboards.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Harcourt Manufacturing (HM) has the capacity to produce 11,800 fax machines per year. HM currently produces and sells 8,800 units per year. The fax machines normally sell for $280 each. Modem Products has offered to buy 3,800 fax machines from HM for $150 each. Unit-level costs associated with manufacturing the fax machines are $51 each for direct labor and $76 each for direct materials. Product-level and facility-level costs are $68,000 and $83,000, respectively. How much would profit increase (decrease) if HM accepted this special order?
Stackhouse Computing produces high performance desktop computers. Labor cost data shows that the company spent $1,036,000 for 3,700 computers produced, and each computer requires 2 technician hours and 5 hours of direct labor. Direct labor is paid $16 per hour by the company. What is the cost of 1 technician hour?
Morrison Manufacturing produces casings for sewing machines: large and small. To produce the different casings, equipment must be set up. The setup cost per production run is $18,000 for either casing. The cost of carrying small casings in inventory is $6 per casing per year; the cost of large casings is $18 per unit per year. To satisfy demand, the company produces 2,400,000 small casings and 800,000 large casings. 1. Compute the number of large casings that should be produced per setup to minimize total setup and carrying costs for this product. 2. Compute the setup, carrying, and total costs associated with the economic order quantity for the large casings.
RLW Enterprises estimated that indirect manufacturing costs for the year would be $75 million and that 15,000 machine-hours would be used. (a) Compute the predetermined indirect cost application rate using machine hours as the burden vehicle. (b) Determine the total cost of production for a product with direct material costs of $2 million, direct labor costs of $2.5 million, and 200 machine-hours.
Muspest Supplies is currently evaluating the cost of manufacturing some of the components utilised in their products. Currently the company expects to need 6 000 parts each month. A supplier of the part has been identified and the total cost of purchasing the parts on a monthly basis would be $97 000. In analysing the part costs, the direct labour and materials cost would be $64 000 and the variable overheads would be $22 000.Based only on the relevant cost per unit, which would be the preferred option of Muspest Supplies?HD EDUCATIONA. Unit costs to produce the part would be $14.33 with the unit cost to purchase of $ 16.17. In this case, the best option would be to commence purchasing the part.B. Unit costs to produce the part would be $10.67 with the unit cost to purchase of $ 16.17. In this case, the best option would be to continue to make the part.C. None of the other answers D. Unit costs to produce the part would be $14.33 with the unit cost to purchase of $ 16.17. In this case,…
Beat Company manufactures 8,000 units of a certain component per year. This component is used in the production of the main product. The following are the costs to make the component per unit: Direct materials $4 Direct labor $4 Variable overhead $3 Fixed overhead $5 If Beat Company buys the component from an outside supplier, the company can rent out the released facilities for P12,360 a year. The cost of the component per unit as quoted by the supplier is P15. 25% of fixed overhead applied in the manufacture of the component will continue regardless of what decision is made. For all purchase made by the company, freight and handling costs are applied at 2% of the purchase price. The direct materials cost presented above is exclusive of such freight and handling cost. What is the advantage or disadvantage of buying the component?A. P12,240 advantage B. 24,600 advantage C. 5,400 disadvantage D. 8,600 advantage
Norrell Novelties, Inc., produces 225,000 units of balls used in its pinball games each year. An outside supplier has offered to supply the pinballs for $27 each. The unit cost of manufacturing the pinballs is calculated as follows: Direct materials $10.00 Direct labor 12.00 Variable overhead (power) 8.00 Fixed overhead 5.00 Total unit cost $40.00 Overhead is applied on the basis of machine hours; the pinballs require 120,000 machine hours per year. Assuming that none of the fixed costs are avoidable, which of the following alternatives is most cost effective? a.Norrell Novelties, Inc., should buy the pinballs as the analysis shows a $275,000 advantage in favor of buying the part from outside. b.Norrell Novelties, Inc., should make the pinballs as the analysis shows a $150,000 advantage in favor of making the part in house. c.Norrell Novelties, Inc., should make the pinballs as the fixed costs of $10 are not avoidable. d.Norrell Novelties, Inc., should buy the pinballs as…
Power-To-Spare, Inc. makes a smartphone case that includes a battery that extends the operating life of an iPhone. The manufacturing costs per unit include $15 direct materials, $17 direct labor, and $8 manufacturing overhead. These costs are based on a production and sales volume of 4,000 units. Advertising costs amounted to $25,000. Research and development cost for the materials used in the phone cases amounted $30,000. Companywide administrative costs amounted to $45,000. Fashion design costs amounted to $20,000. Power-To-Spare’s management team established the sales price at 150 percent of GAAP-defined product cost. Required Determine the total amount of upstream costs. Determine the total amount of downstream cost. Determine the total amount of midstream cost. Determine the sales price per unit. Prepare a GAAP-based income statement.
Ahrends Corporation makes 44,000 units per year of a part it uses in the products it manufactures. The unit product cost of this part is computed as follows: Direct materials $ 23.80 Direct labor 27.70 Variable manufacturing overhead 8.70 Fixed manufacturing overhead 39.70 Unit product cost $ 99.90 An outside supplier has offered to sell the company all of these parts it needs for $86.20 a unit. If the company accepts this offer, the facilities now being used to make the part could be used to make more units of a product that is in high demand. The additional contribution margin on this other product would be $286,000 per year. If the part were purchased from the outside supplier, all of the direct labor cost of the part would be avoided. However, $34.40 of the fixed manufacturing overhead cost being applied to the part would continue even if the part were purchased from the outside supplier. This fixed manufacturing overhead cost would be applied to the company's…
Abolt Corporation makes 40,000 units per year of a part it uses in the products it manufactures. The unit product cost of this part is computed as follows: direct materials $11.30 direct labour $22.70 variable manufacturing overhead $1.20 fixed manufacturing overhead $24.70 unit product cost $59.90 An outside supplier has offered to sell the company all of these parts it needs for$46.20 a unit. If the company accepts this offer, the facilities now being used tomake the part could be used to make more units of a product that is in highdemand. The additional contribution margin on this other product would be$264,000 per year. Additionally, $21.90 of the fixed manufacturing overheadcost being applied to the part would continue even if the part were purchasedfrom the outside supplier.Required:I. What is the net total dollar advantage (disadvantage) of purchasing the partrather than making it?II. Calculate the maximum amount per unit the company should be willing topay an…
Zee-Drive Ltd. is a computer manufacturer. One of the items they make is monitors. Zee-Drive has the opportunity to purchase 19,000 monitors from an outside supplier for $211 per unit. One of the company's cost-accounting interns prepared the following schedule of Zee-Drive's cost to produce 19,000 monitors: Total cost of producing 19,000 monitors Unit cost Direct materials $ 2,204,000 $116 Direct labor 1,330,000 70 Variable factory overhead 665,000 35 Fixed manufacturing overhead 570,000 30 Fixed non-manufacturing overhead 722,000 38 $ 5,491,000 $ 289 You are asked to look over the intern's estimate before the information is shared with members of management who will decide to continue to make the monitors or buy them. The company's controller believes that the estimate may be incorrect because it includes costs that are not relevant. If Zee-Drive buys the monitors, the direct labor force currently employed in producing the monitors will be terminated and there would be no termination…
Ahrends Corporation makes 41,000 units per year of a part it uses in the products it manufactures. The unit product cost of this part is computed as follows: Direct materials $ 11.80 Direct labor 22.90 Variable manufacturing overhead 1.50 Fixed manufacturing overhead 25.30 Unit product cost $ 61.50 An outside supplier has offered to sell the company all of these parts it needs for $47.80 a unit. If the company accepts this offer, the facilities now being used to make the part could be used to make more units of a product that is in high demand. The additional contribution margin on this other product would be $246,000 per year. If the part were purchased from the outside supplier, all of the direct labor cost of the part would be avoided. However, $22.40 of the fixed manufacturing overhead cost being applied to the part would continue even if the part were purchased from the outside supplier. This fixed manufacturing overhead cost would be applied to the company's…