Problem 23-2A (Algo) Scrap or rework LO P2 Hip Manufacturing produces denim clothing. This year it produced 3,320 denim jackets at a cost of $99,600. These jackets were damaged in the warehouse during storage. Management identified three alternatives for these jackets. 1. Jackets can be sold as scrap to a secondhand clothing shop for $19,920. 2. Jackets can be disassembled at a cost of $6,640 and sold to a recycler for $39,840. 3. Jackets can be reworked and turned into good jackets. The cost of reworking the jackets will be $112,880, and the jackets can then be sold for $149,400. Required: (1) Compute the income for each alternative. (2) Which alternative should be chosen? Scrap, Recycle or Rework Analysis Revenue from scrap/recycle/rework Cost of recycled/reworked units Income Scrap Recycle Rework $ ° $ 0 $

Problem 23-2A (Algo) Scrap or rework LO P2 Hip Manufacturing produces denim clothing. This year it produced 3,320 denim jackets at a cost of $99,600. These jackets were damaged in the warehouse during storage. Management identified three alternatives for these jackets. 1. Jackets can be sold as scrap to a secondhand clothing shop for $19,920. 2. Jackets can be disassembled at a cost of $6,640 and sold to a recycler for $39,840. 3. Jackets can be reworked and turned into good jackets. The cost of reworking the jackets will be $112,880, and the jackets can then be sold for $149,400. Required: (1) Compute the income for each alternative. (2) Which alternative should be chosen? Scrap, Recycle or Rework Analysis Revenue from scrap/recycle/rework Cost of recycled/reworked units Income Scrap Recycle Rework $ ° $ 0 $

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter17: Activity Resource Usage Model And Tactical Decision Making

Section: Chapter Questions

Problem 19E: Walloon Company produced 150 defective units last month at a unit manufacturing cost of 30. The...

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Chapter 23, Question 2
vj subject-Accounting
Excercise 3.19 Walloon Company produced 150 defective units last month at a unit manufacturing cost of $30. Thedefective units were discovered before leaving the plant. Walloon can sell them "as is" for $20 or canrework them at a cost of $15 and sell them at the regular price of $50. What is the total relevant cost ofreworking the defective units? a. $2,250 b. $3,000 c. $4,500 d. $6,750
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Walloon Company produced 150 defective units last month at a unit manufacturing cost of 30. The defective units were discovered before leaving the plant. Walloon can sell them as is for 20 or can rework them at a cost of 15 and sell them at the regular price of 50. What is the total relevant cost of reworking the defective units? a. 2,250 b. 3,000 c. 4,500 d. 6,750
Classify costs Cromwell Furniture Company manufactures sofas for distribution to several major retail chains. The following costs are incurred in the production and sale of sofas: Fabric for sofa coverings Wood for framing the sofas Legal fees paid to attorneys in defense of the company in a patent infringement suit, 25,000 plus 160 per hour Salary of production supervisor Cartons used to ship sofas Rent on experimental equipment, 50 for every sofa produced Straight-line depreciation on factory equipment Rental costs of warehouse, 30,000 per month Property taxes on property, plant, and equipment Insurance premiums on property, plant, and equipment, 25,000 per year plus 25 per 25,000 of insured value over 16,000,000 Springs for seat cushions Consulting fee of 120,000 paid to efficiency specialists Electricity costs of 0.13 per kilowatt-hour Salespersons salary, 80,000 plus 4% of the selling price of each sofa sold Foam rubber for cushion fillings Janitorial supplies, 2,500 per month Employer's FICA taxes on controller's salary of 180,000 Salary of designers Wages of sewing machine operators Sewing supplies Instructions Classify the preceding costs as either fixed, variable, or mixed. Use the following tabular headings and place an X in the appropriate column. Identify each cost by letter in the cost column.
Pasha Company produced 50 defective units last month at a unit manufacturing cost of 30. The defective units were discovered before leaving the plant. Pasha can sell them as is for 20 or can rework them at a cost of 15 and sell them at the regular price of 50. Which of the following is not relevant to the sell-or-rework decision? a. 30 b. 20 c. 15 d. 50
pts T UousənO Noteworthy, Inc., produces and sells small electronic keyboards. Assume that you have the following information about Noteworthy's costs for the most recent month. Depreciation on factory equipment $970 Depreciation on CEO's company car 240 Speakers used in the keyboard 1,170 Production supervisor's salarY 2,210 Glue and screws used in the keyboards 270 Wages of persons who install the speakers 2,930 Cost to run an ad on local radio stations 650 Utilities for the factory 1,380 Personnel manager's salary 2,630 Wages of person who attaches legs to 2,140 keyboards Answer the following questions. 1. Calculate the total product cost for Noteworthy. 2. Calculate the prime cost for Noteworthy. 3. Calculate the manufacturing overhead for Noteworthy. 4. Calculate the direct labor for Noteworthy. 5. Calculate the conversion cost for Noteworthy. Edit Format Table 12pt v Paragraph v BIUA 2 T?
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Question 6:Part (a)What are the two methods to account for by-products? Which is the moreappropriate method to use and why?Part (b)The Carolina Company prepares lumber for companies who manufacturefurniture. The main product is finished lumber with a by-product of woodshavings. The by-product is sold to plywood manufacturers. For August 2020,the manufacturing process incurred $332,000 in total costs. Eighty thousandboard feet of lumber were produced and sold along with 6,800 pounds ofshavings. The finished lumber sold for $6.00 per board foot and the shavingssold for $0.60 a pound. There were no beginning or ending inventories.Required: Prepare an income statement showing the by-product as:(1) a cost reduction during production and(2) a revenue item when sold