Ortiz co.produces 5,000...accounting questions Ortiz Co. produces 5,000 units of part A12E. The following costswere incurred for that level of production:Direct materials$45,000Direct labor$160,000Variable overhead $75,000Fixed overhead$175,000If Ortiz buys the part from an outside supplier, $40,000 of thefixed overhead is avoidable. What is the relevant cost per unit ofpart A12E?

Step 1: Define Relevant CostsAll those costs that are affected when a business decision is taken are…

Answered: Ortiz Co. produces 5,000 units of part…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 6PA: Box Springs, Inc., makes two sizes of box springs: twin and double. The direct material for the twin...

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The following product Costs are available for Haworth Company on the production of chairs: direct materials, $15,500; direct labor, $22.000; manufacturing overhead, $16.500; selling expenses, $6,900; and administrative expenses, $15,200. What are the prime costs? What are the conversion costs? What is the total product cost? What is the total period cost? If 7,750 equivalent units are produced, what is the equivalent material cost per unit? If 22,000 equivalent units are produced, what is the equivalent conversion cost per unit?
Cool Pool has these costs associated with production of 20,000 units of accessory products: direct materials, $70; direct labor, $110; variable manufacturing overhead, $45; total fixed manufacturing overhead, $800,000. What is the cost per unit under both the variable and absorption methods?
What is the conversion cost to manufacture insulated travel cups if the costs are: direct materials, $17,000; direct labor, $33,000; and manufacturing overhead, $70,000? A. $16,000 B. $50,000 C. $103,000 D. $120000
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?
A firm has 100,000 in direct materials costs, 50,000 in direct labor costs, and 80,000 in overhead. Which of the following is true? a. Prime costs are 150,000; conversion costs are 180,000. b. Prime costs are 130,000; conversion costs are 150,000. c. Prime costs are 150,000; conversion costs are 130,000. d. Prime costs are 180,000; conversion costs are 150,000.
Box Springs. Inc., makes two sizes of box springs: queen and king. The direct material for the queen is $35 per unit and $55 is used in direct labor, while the direct material for the king is $55 per unit, and the labor cost is $70 per unit. Box Springs estimates it will make 4,300 queens and 3,000 kings 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?
Sheridan Company produces 5000 units of part A12E. The following costs were incurred for that level of production: Direct materials $ 65000 Direct labor 170000 Variable overhead 85000 Fixed overhead 175000 If Sheridan buys the part from an outside supplier, $30000 of the fixed overhead is avoidable.What is the relevant cost per unit of part A12E? $99 $70 $93 $64
Sheddon Industries produces two products. The products' identified costs are as follows: Product A Product B Direct materials $20,000 $15,000 Direct labor $12,000 $24,000 The company's overhead costs of $108,000 are allocated based on direct labor cost. Assume 4,000 units of product A and 5,000 units of Product B are produced. What is the cost per unit for product B? (Do not round your intermediate calculations.)
What are the fixed overhead costs of making the component?
Harmony is currently producing 100 units of a necessary component part by incurring $60,000 in direct materials, $12,500 in direct labour, $22,500 in variable overhead, and $15,000 in fixed overhead. If Harmony purchases the component externally, $10,000 of fixed costs can be avoided. What is the external price where the company is indifferent between buying and selling? $950 $1,050 O $1,000 O $1,100 Save for Later Submit Answer
Ragemark Company produces 15,000 units of a component used in freezer. An outside supplier has offered to supply the part for $1.42. The unit cost is: Direct material $0.55 Direct labour 0.2 Variable overhead 0.1 Fixed overhead 2.45 Total unit cost $3.30 Required: 1. What are the alternatives for Ragemark Company? 2. Assume that none of the ﬁxed cost is avoidable. List the relevant cost(s) of internal production and of external purchase. 3. Which alternative is more cost effective and by how much?
Scott Corporation produces a part for use in the production of one of its products. The per-unit costs associated with the annual production of 1,000 units of this part are as follows: Direct Materials $10.50 $24.00 Direct labor Variable factory overhead $5.50 Fixed factory overhead $12.00 Total Costs $52.00 $5,000 of the fixed factory overhead costs associated with the production of this product are common fixed costs. Larson Company has offered to sell 1,000 units of the same part to Scott Corporation for $42 per unit. Scott should: Select one: a. buy the part, because this would save $10.00 per unit. X b. buy the part, because this would save the company $5,000 annually. c. make the part, because this would save the company $5,000 annually. d. make the part, because this would save $2.00 per unit.

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