Power Serve Company expects to operate at 85% of productive capacity during May. The total manufacturing costs for May for the production of 28,050 batteries are budgeted as follows: Direct materials $272,800 Direct labor 100,300 Variable factory overhead 28,015 Fixed factory overhead 56,000 Total manufacturing costs $457,115 The company has an opportunity to submit a bid for 2,000 batteries to be delivered by May 31 to a government agency. If the contract is obtained, it is anticipated that the additional activity will not interfere with normal production during May or increase the selling or administrative expenses. What is the unit cost below which Power Serve Company should not go in bidding on the government contract? Round your answer to two decimal places. per unit

Power Serve Company expects to operate at 85% of productive capacity during May. The total manufacturing costs for May for the production of 28,050 batteries are budgeted as follows: Direct materials $272,800 Direct labor 100,300 Variable factory overhead 28,015 Fixed factory overhead 56,000 Total manufacturing costs $457,115 The company has an opportunity to submit a bid for 2,000 batteries to be delivered by May 31 to a government agency. If the contract is obtained, it is anticipated that the additional activity will not interfere with normal production during May or increase the selling or administrative expenses. What is the unit cost below which Power Serve Company should not go in bidding on the government contract? Round your answer to two decimal places. per unit

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

ABX Company plans to produce 50,000 units of Peace Products in 2023. Budgeted variable manufacturing costs per unit are direct materials P7, direct labor P12, and overhead P18. Annual budgeted fixed manufacturing overhead costs are P96,000 for depreciation and P45,000 for supervision. In February, Shalom produced 6,000 units and incurred the following costs: direct materials P38,900, direct labor P70,200, variable overhead P116,500, depreciation P8,000, and supervision P4,000. Need solution Direct materials: ANS: 3,100 F Total fixed manufacturing overhead: ___ How much was the total variable manufacturing cost? ANS: 222,000
Company 10, a local road building contractor, had budgeted indirect costs for 2023 of $600,000. Budgeted labour hours for the year were 12,500 costing $260,000 and budgeted machine hours were 14,000. The company marks-up the total cost of each job by 40% to determine selling price. The company has just completed a road repair for the local council. The direct costs were as follows: Materials: $32,100 Labour: 305 hours Machining: 75 hours What is the total selling price of this job assuming the company allocates overheads on: A labour hour basis? A machine hour basis? (1) (ii) A B C D (1) Labour hour basis $53,084 $74,318 $65,436 $20,496 (ii)Machine hour basis $41,659 $58,323 $49,441 $4,521
The production department of Headstrong Company has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Units to be produced 8,100 9,100 7,100 6,100 In addition, the beginning raw materials inventory for the first quarter is budgeted to be 1,950 kilograms and the beginning accounts payable for the first quarter are budgeted to be $3,490. Each unit requires 3.1 kg of raw material that costs $2.50 per kilogram. Management desires to end each quarter with an inventory of raw materials equal to 10% of the following quarter’s production needs. The desired ending inventory for the fourth quarter is 2,325 kilograms. Management plans to pay for 80% of raw material purchases in the quarter acquired and 20% in the following quarter. Each unit requires 0.6 direct labour-hours, and direct labour-hour workers are paid $19.5 per hour. Required: 1-a. Prepare the company's direct…
Johnson Electrical produces industrial ventilation fans. The company plans to manufacture 87,000 fans evenly over the next quarter at the following costs direct material, $1,740,000, direct labor, $522,000, variable production overhead, $639,450, and fixed production overhead. $960,000. The $960,000 amount includes $84,000 of straight-line depreciation and $105,000 of supervisory salaries Shortly after the conclusion of the quarter's first month, Johnson reported the following costs: Direct material Direct labor $ 554,600 159,300 Variable production overhead Depreciation 220,000 28,000 Supervisory salaries 37,600 Other fixed production overhead Total 252,000 $1,251,500 Dave Kellerman and his crews turned out 25,000 fans during the month a remarkable feat given that the firm's manufacturing plant was closed for several days because of storm damage and flooding Kellerman was especially pleased with the fact that overall financial performance for the period was favorable when compared…
Accepting Business at a Special Price Forever Ready Company expects to operate at 90% of productive capacity during July. The total manufacturing costs for July for the production of 37,800 batteries are budgeted as follows: Direct materials $413,800 152,100 Direct labor Variable factory overhead 42,680 Fixed factory overhead 85,000 Total manufacturing costs $693,580 The company has an opportunity to submit a bid for 2,000 batteries to be delivered by July 31 to a government agency. If the contract is obtained, it is anticipated that the additional activity will not interfere with normal production during July or increase the selling or administrative expenses. What is the unit cost below which Forever Ready Company should not go in bidding on the government contract? Round your answer to two decimal places. per unit
aHRiIh mahufactures pipes and applies manufacturing overhead costs to production at a budgeted indirect-cost rate of $18 per direct labor-hour. The following data are obtained from the accounting records for June 2020: Direct materials $140,000 Direct labor (4,000 hours @ $10/hour) 40,000 Indirect labor 13,000 Plant facility rent 30,000 Depreciation on plant mach. & equip. 22,500 Sales commissions 24,000 Administrative expenses 28,000 For June 2020, manufacturing overhead is O overallocated by $6.500 Ounderallocated by $21.500 ovrcallocated by $21.500
Enjoy It Industries manufactures custom-designed playground equipment for schools and city parks. Enjoy It expected to incur $750,600 of manufacturing overhead cost, 41,700 of direct labor hours, and $1,000,800 of direct labor cost during the year (the cost of direct labor required $14,200 of direct materials. The City of Adams has contracted to purchase the playground equipment at a price of 27% over manufacturing cost. $24 per hour). The company allocates manufacturing overhead on the basis of direct labor hours. During July, Enjoy It completed Job 309. The job used 165 direct labor hours and Read the equirement Requirement 1. Calculate the manufacturing cost of Job 309. First identify the formula, then calculate the predetermined overhead rate. = Predetermined overhead rate per hour
Riverbed Company expects to produce 1,272,000 units of Product XX in 2022. Monthly production is expected to range from 84,800 to 127,200 units. Budgeted variable manufacturing costs per unit are direct materials $5, direct labor $6, and overhead $8. Budgeted fixed manufacturing costs per unit for depreciation are $2 and for supervision are $1. Prepare a flexible manufacturing budget for the relevant range value using 21,200 unit increments. (List variable costs before fixed costs. Activity Level Finished Units RIVERBED COMPANY Monthly Flexible Manufacturing Budget For the Year 2022 84800 106000 127200 Variable Costs Direct Materials $ 424000 530000 636000 Direct Labor Overhead 508800 636000 763200 678400 848000 1017600 Total Variable Costs 1611200 2014000 2416800 Fixed Costs Depreciation Supervision Total Fixed Costs Total Costs +A 424000 424000 424000 424000 636000 2247200 $ 212000 636000 2650000 EA 212000 636000 3052800
Wharton Company has the capacity to produce 50,000 units per year. The company sells each unit for $125. Budgeted information is as follows: Revenues $5,612,000 Direct materials $1,932,000 Direct labor 552,000 Manufacturing overhead (fixed) 276,000 Manufacturing overhead (variable) 552,000 3,312,000 Total $2,300,000 A special order has been received for 5,000 units to be sold for $80 per unit. The company would incur an additional $60,000 in total fixed costs in order to lease a special machine in order to make a slight modification to the original product. Should the company accept the special order? A. Yes, the revenue will increase substantially. B. No, total costs would increase by $303,600. C. Yes, profit will increase by $36,400. D. No, accepting this order would decrease profits to $2,263,600.