Piper Recreational Vehicles (PRV) modifies vans into recreational vehicles. PRV offers two models, the XC-2 and XC-6, which differ in the quality of the basic van and the workmanship and machining detail that are used. The following data reflect expected operations for the next year. XC-2 XC-6 Total Number assembled 55 49 104 Materials cost per RV $ 40,050 $ 70,050 Other costs: Direct labor Depreciation Miscellaneous cost $ 955,550 745,120 847,330 Required: Piper Recreational Vehicles uses operations costing and assigns conversion costs based on the number of units assembled. Compute the expected cost of each model assembled next year. Operation cost Materials cost Total cost XC-2 XC-6 Total $ 0

Piper Recreational Vehicles (PRV) modifies vans into recreational vehicles. PRV offers two models, the XC-2 and XC-6, which differ in the quality of the basic van and the workmanship and machining detail that are used. The following data reflect expected operations for the next year. XC-2 XC-6 Total Number assembled 55 49 104 Materials cost per RV $ 40,050 $ 70,050 Other costs: Direct labor Depreciation Miscellaneous cost $ 955,550 745,120 847,330 Required: Piper Recreational Vehicles uses operations costing and assigns conversion costs based on the number of units assembled. Compute the expected cost of each model assembled next year. Operation cost Materials cost Total cost XC-2 XC-6 Total $ 0

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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Current Attempt in Progress Bonita Industries produces 5000 units of part A12E. The following costs were incurred for that level of production: Direct materials Direct labor Variable overhead Fixed overhead $(15000). $145000. $ 60000 O $85000. O $(60000). 165000 80000 If Bonita buys the part from an outside supplier, $45000 of the fixed overhead is avoidable. If the outside supplier offers a unit price of $73, net income will increase (decrease) by 175000
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Cost Behavior Cover-to-Cover Company is a manufacturer of shelving for books. The company has compiled the following cost data, and wants your help in determining the cost behavior. After reviewing the data, complete requirements (1) and (2) that follow. Total Total Total Machine Units Lumber Utilities Depreciation Produced Cost Cost Cost 5,000 shelves $50,000 $7,250 $145,000 10,000 shelves 100,000 13,000 145,000 20,000 shelves 200,000 24,500 145,000 25,000 shelves 250,000 30,250 145,000 1. Determine whether the costs in the table are variable, fixed, mixed, or none of these. Lumber Variable Cost v Utilities Mixed Cost V Depreciation Fixed Cost v 2. For each cost, determine the fixed portion of the cost, and the per-unit variable cost. If there is no amount or an amount is zero, enter "0". Recall that, for N = Number of Units Produced, Total Costs = (Variable Cost Per Unit x N) + Fixed Cost. Complete the following table with your answers. Round variable portion of cost (per unit)…
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Due to the increased intensity of competition, the company is contemplating the activitybased costing method to help understand and control its costs better. The following are the costing and operating details collected for the pilot testing purpose. Material Handling QA Total Documentation $750,000 $1,100,000 $1,850,000 Fork Lift Truck Depreciation $500,000 $250,000 $750,000 Palletizing $1,250,000 - $1,250,000 Inspection - $650,000 $650,000 Total $2,500,000 $2,000,000 $4,500,000 Number of process checklist forms 7 17 13 37 Fork Lift Truck Hours 15 35 25 75 Number of pallets 25 145 80 250 Number of inspection hours 400 1,100 1,000 2,500 Question 1. Compute the activity-based cost allocated to all products. Would you recommend for the change to ABC? Explain
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Cost Behavior Cover-to-Cover Company is a manufacturer of shelving for books. The company has compiled the following cost data, and wants your help in determining the cost behavior. After reviewing the data, complete requirements (1) and (2) that follow. Total Total Total Machine Units Lumber Utilities Depreciation Produced Cost Cost Cost 6,000 shelves $72,000 $8,900 $125,000 12,000 shelves 144,000 15,800 125,000 24,000 shelves 288,000 29,600 125,000 30,000 shelves 360,000 36,500 125,000 1. Determine whether the costs in the table are variable, fixed, mizxed, or none of these. Lumber Variable Cost Mixed Cost Depreciation Fixed Cost Number of Units Produced, Total Costs = 2. For each cost, determine the fixed portion of the cost, and the per-unit variable cost. If there is no amount or an amount is zero, enter "0. Recall that, for N = (Variable Cost Per Unit x N) + Fixed Cost. Complete the following table with your answers. Round variable portion of cost (per unit) answers to two…
Variable costs: Direct materials $0.15 Direct labor 0.06 Variable overhead 0.11 Fixed overhead 0.30 Total cost $0.62
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