Question No. 1-2The estimated costs of producing 6,000 units of a component are:Per UnitDirect Material$10Direct Labor8Applied Variable Factory Overhead9Applied Fixed Factory Overhead$1.5 per direct labor dollarThe same component can be purchased from market at a price of $29 per unit. If the componentis purchased from market, 25% of the fixed factory overhead will be saved.12Required:a. Should the component be purchased from the market?b. Being a production manager, provide your iogicai opinion on choosing betweenpurchasing the component from market or producing in-house

Variable factory overhead refers to those expenses which are involved in the production of goods and…

Answered: Question No. 1-2 The estimated costs of…

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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TB Problem Qu. 4-209 Daba Company manufactures two products, Product F ... Daba Company manufactures two products, Product F and Product G. The company expects to produce and sell 2,400 units of Product F and 2,800 units of Product G during the current year. The company uses activity-based costing to compute unit product costs for external reports. Data relating to the company's three activity cost pools are given below for the current year: Estimated Expected Activity Activity Cost Pool Overhead Cost Product F Product G Total Machine setups $ 16,720 132 setups 88 setups 220 setups Purchase orders $ 90,640 741 orders 1,319 orders 2,060 orders Order size $ 52,080 1,290 hours 1,190 hours 2,480 hours Required: Using the activity-based costing approach, determine the overhead cost per unit for each product. (Round your answers to 2 decimal places.) What is the overhead cost per unit for F and G.
1. Make-or-Buy Decision Companion Computer Company has been purchasing carrying cases for its portable computers at a purchase price of $61 per unit. The company, which is currently operating below full capacity, charges factory overhead to production at the rate of 39% of direct labor cost. The fully absorbed unit costs to produce comparable carrying cases are expected to be as follows: Direct materials $29 Direct labor 20 Factory overhead (39% of direct labor) 7.8 Total cost per unit $56.8 If Companion Computer Company manufactures the carrying cases, fixed factory overhead costs will not increase and variable factory overhead costs associated with the cases are expected to be 15% of the direct labor costs. 2. Machine Replacement Decision A company is considering replacing an old piece of machinery, which cost $599,500 and has $349,400 of accumulated depreciation to date, with a new machine that has a purchase price of $483,600. The old machine could be sold for $63,000.…
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Question 2 Moon produces tow products the A and B. The direct costs of the two products are given below: Direct materials Direct Labour A £4.00 £3.00 Materials handling Production set up costs The budgeted production for 80,000 units of A and 30,000 units of B. The two main activities identified for the simple production process are material handling and production set ups. Product A requires large production runs and large transfers of materials from stores. However, product B is a more complex product with a number of different types of materials required and shorter and more frequent production runs. A Number Material Handling requisitions 100 Number of Production Set Ups 50 Required: B The budgeted fixed overheads of Caplan are £600,000 and they are made up as follows: £200,000 £400,000 £600,000 The use of these activities for each product is £4.20 £2.20 B 400 200 Total 500 250 Calculate the unit cost of each product using the costing method of Activity Based Costing.
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LL Requlred Information The following information applies to the questions displayed below] Cane Company manufactures two products called Alpha and Beta that sell for $225 and $175, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 130,000 units of each product Its average cost per unit for each product at this level of activity are given below. Alpha $42 Beta $ 24 32 24 Direct materials Direct labor Variable manufacturing overhead Traceable Fixed manufacturing overhead Variable selling expenses Common fixed expenses 42. 26. 34 31. 34. 27. Total cost per unit $173 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. 2 What is the company's total amount of common fixed expenses? Total common fixed expenses. ( Prev of 15 2 3 4 Next e to search TPL F4 F5
Question 2 A company produces two products in three departments. Details are shown below regarding the time per unit required in each department, the available hours in each department and the contribution per unit of each product: Resources Product X Product Y Available hours hours per unit hours per unit Department A 8 10 11,000 Department B 4 10 9,000 Department C 12 6 12,000 Contribution per unit $4 $8 There is unlimited demand for Product X, but demand for Product Y is limited to 600 units per annum. Requirement Determine, using a step-by-step approach, what the optimum production plan is.
QUESTION 1 Identify each of the costs listed below. The plant manager's salary is $80,000. A salesperson earns a commission of 10% of revenue. Paid $20,000 to advertise a new product. A. Variable Cost B. Fixed Cost
Assume a company has two divisions, Division A and Division B. Division A has provided the following information regarding the one product that it manufactures and sells on the outside market: Selling price per unit (on the outside market). Variable cost per unit $ 60 $ 44 Fixed costs per unit (based on capacity) Capacity in units $ 4 20,000 Division B could use Division A's product as a component part in the manufacture of 4,000 units of its own newly-designed product. Division B has received a quote of $58 from an outside supplier for a component part that is comparable to the one that Division A makes. If the company's divisional managers are evaluated based their division's profits and Division A is currently selling 18,000 units on the outside market, what is Division A's lowest acceptable transfer price if it were to sell 4,000 units to Division B?

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