Provide correct answer general Accounting question Mandarin Furniture manufactures two products, pillows andcushions from the joint process. Pillows are allocated $7,000 ofthe total joint costs of $25,000. There are 2,500 pillows producedand $2500 cushions produced each year. Pillows can be sold atthe split-off for $12 per unit, or they can be processed furtherinto a deluxe pillow for additional processing costs of $8000 andsold for $16 for each deluxe pillow.If the pillows are processed further and made into deluxe pillows,the effect on operating income would be?

Step 1: Define Process costingThe technique of costing in which the item has been produced by going…

Answered: Mandarin Furniture manufactures two…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter5: Support Department And Joint Cost Allocation

Section: Chapter Questions

Problem 6BE

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Taylor Company produces two industrial cleansers that use the same liquid chemical input: Pocolimpio and Maslimpio. Pocolimpio uses two quarts of the chemical for every unit produced, and Maslimpio uses five quarts. Currently, Taylor has 6,000 quarts of the material in inventory. All of the material is imported. For the coming year, Taylor plans to import 6,000 quarts to produce 1,000 units of Pocolimpio and 2,000 units of Maslimpio. The detail of each products unit contribution margin is as follows: Taylor Company has received word that the source of the material has been shut down by embargo. Consequently, the company will not be able to import the 6,000 quarts it planned to use in the coming years production. There is no other source of the material. Required: 1. Compute the total contribution margin that the company would earn if it could import the 6,000 quarts of the material. 2. Determine the optimal usage of the companys inventory of 6,000 quarts of the material. Compute the total contribution margin for the product mix that you recommend. 3. Assume that Pocolimpio uses three direct labor hours for every unit produced and that Maslimpio uses two hours. A total of 6,000 direct labor hours is available for the coming year. a. Formulate the linear programming problem faced by Taylor Company. To do so, you must derive mathematical expressions for the objective function and for the materials and labor constraints. b. Solve the linear programming problem using the graphical approach. c. Compute the total contribution margin produced by the optimal mix.
Blakes Blacksmith Co. produces two types of shotguns, a 12-gauge and 20-gauge. The shotguns are made through a joint production process that ultimately produces 30 12-gauge shotguns and 20 20-gauge shotguns and costs a total of 4,000 per batch. After the split-off point, each type of shotgun goes through an additional crafting process before it is sold. The additional production process of the 12-gauge shotgun costs 30 per gun, after which it is sold for 180 per gun. The additional production process of the 20-gauge shotgun costs 25 per gun, after which it is sold for 150 per gun. Determine the amount of joint production costs allocated to each type of shotgun using the physical units method.
Tucariz Company processes Duo into two joint products, Big and Mini. Duo is purchased in 1,000-gallon drums for 2.000. Processing costs are 3,000 to process the 1,000 gallons of Duointo 800 gallons of Big and 200 gallons of Mini. The selling price is 9 per gallon for Big and4 per gallon for Mini. If the physical units method is used to allocate joint costs to the finalproducts, the total cost allocated to produce Mini is: a. 500. b. 4,000. c. 1,000. d. 4,500.
Box Springs, Inc., makes two sizes of box springs: twin and double. The direct material for the twin is $25 per unit and $40 s used in direct labor, while the direct material for the double is $40 per unit, and the labor cost is $50 per unit. Box Springs estimates it will make 5,000 twins and 9,000 doubles in the next year. It estimates the overhead for each cost pool and cost driver activities as follows: How much does each unit cost to manufacture?
Vollmer Manufacturing makes three components for sale to refrigeration companies. The components are processed on two machines: a shaper and a grinder. The times (in minutes) required on each machine are as follows: The shaper is available for 120 hours, and the grinder for 110 hours. No more than 200 units of component 3 can be sold, but up to 1,000 units of each of the other components can be sold. In fact, the company already has orders for 600 units of component 1 that must be satisfied. The profit contributions for components 1, 2, and 3 are 8, 6, and 9, respectively. a. Formulate and solve for the recommended production quantities. b. What are the objective coefficient ranges for the three components? Interpret these ranges for company management. c. What are the right-hand-side ranges? Interpret these ranges for company management. d. If more time could be made available on the grinder, how much would it be worth? e. If more units of component 3 can be sold by reducing the sales price by 4, should the company reduce the price?
Pet Products Inc. manufactures two products, cat bowls and dog bowls, from a joint process. Cat bowls are allocated 50% of the total joint costs of $20,000. There are 1,000 cat bowls produced and 1,000 dog bowls produced each year. Cat Bowls can be sold at the split-off point for $12 per unit, or they can be processed further into an extra fancy cat bowl for additional processing costs of $4,970 and sold for $16 each. What is the difference in operating income between processing the cat bowls further versus selling them off at the split-off point? If income is higher by processing the cat bowls further, input your number as a positive number. If income is lower by processing the cat bowls further, input your number as a negative number.
Autry Company manufactures veterinary products. One joint process involves refining a chemical (dactylyte) into two chemicals − dac and tyl. One batch of 5,000 gallons of dactylyte can be converted to 2,000 gallons of dac and 3,000 gallons of tyl at a total joint processing cost of $12,000. At the split-off point, dac can be sold for $3 per gallon and tyl can be sold for $4 per gallon. Autry has just learned of a new process to convert dac into prodac. The new process costs $4,000 and yields 1,700 gallons of prodac for every 2,000 gallons of dac. Prodac sells for $5 per gallon. Should Autry process dac further? Yes, income will be $1,500 higher. Yes, income will be $5,000 higher. No, income will be $5,000 lower. It doesn't matter; income will be the same. No, income will be $1,500 lower.
Autry Company manufactures veterinary products. One joint process involves refining a chemical (dactylyte) into two chemicals − dac and tyl. One batch of 5,000 gallons of dactylyte can be converted to 2,000 gallons of dac and 3,000 gallons of tyl at a total joint processing cost of $12,000. At the split-off point, dac can be sold for $3 per gallon and tyl can be sold for $4 per gallon. Autry has just learned of a new process to convert dac into prodac. The new process costs $4,000 and yields 1,700 gallons of prodac for every 2,000 gallons of dac. Prodac sells for $5 per gallon. What is Autry's profit from refining one batch of dactylyte if both dac and tyl are sold at the split-off point? $7,000 $6,000 $15,000 $12,000 $18,000
Autry Company manufactures veterinary products. One joint process involves refining a chemical (dactylyte) into two chemicals: dac and tyl. One batch of 5,000 gallons of dactylyte can be converted to 2,000 gallonsof dac and 3,000 gallons of tyl at a total joint processing cost of $12,000. At the split-off point, dac can be sold for $3 per gallon and tyl can be sold for $4 per gallon.Autry has just learned about a new process to convert dac into prodac. The new process costs $4,000 and yields 1,700 gallons of prodac for every 2,000 gallons of dac. Prodac sells for $5 per gallon. Should Autry process dac further? a. No, income will decrease by $1,500. b. No, income will decrease by $5,000. c. Yes, income will increase by $1,500. d. Yes, income will increase by $5,000. e. It doesn't matter; income will be the same.
The Killian Company manufactures two skin care lotions, Liquid Skin and Silken Skin, out of a joint process. The joint (common) costs incurred are $420,000 for a standard production run that generates 180,000 gallons of Liquid Skin and 120,000 gallons of Silken Skin. Liquid Skin sells for $2.40 per gallon while Silken Skin sells for $3.90 per gallon. Assuming both products are sold at the split-off point, the amount of joint cost of each production run allocated to Liquid Skin on a net realizable value is? If there are additional costs are incurred after the split-off point, the amount of joint cost of each production run allocated to Silken Skin on a physical-quantity basis is?
Choi Company manufactures two skin care lotions, Smooth Skin and Silken Skin, from a joint process. The joint costs incurred are $360,000 for a standard production run that generates 170,000 pints of Smooth Skin and 300,000 pints of Silken Skin. Smooth Skin sells for $3.20 per pint, while Silken Skin sells for $5.20 per pint. Required: 1. Assuming that both products are sold at the split-off point, how much of the joint cost of each production run is allocated to Smooth Skin using the relative sales value method? 2. If no separable costs are incurred after the split-off point, how much of the joint cost of each production run is allocated to Silken Skin using the physical measure method? 3. If separable processing costs beyond the split-off point are $1.80 per pint for Smooth Skin and $1.70 per pint for Silken Skin, how much of the joint cost of each production run is allocated to Silken Skin using a net realizable value method? 4. If separable processing costs beyond the split-off…
Tucariz Company processes Duo into two joint products, Big and Mini. Duo is purchase in 1,000-gallon drums for $2,000. Processing costs are $3,000 to process the 1,000 gallons of Duo into 800 gallons of Big and 200 gallons of Mini. The selling price is $9 per gallon for Big and $4 per gallon for Mini. If the sales value at split-off method is used to allocate joint costs to the final products, the per-gallon cost (rounded to the nearest cent) of producing Big is Select one: a. $5.00 per gallon. b. $5.63 per gallon. c. $4.50 per gallon. X d. $3.38 per gallon.

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