Required information[The following information applies to the questions displayed below.]Abel Company manufactures two products called Deluxe and Regular that sell for $68 and$39, respectively. Each product uses only one type of raw material that costs $3 per kilogram.The company has the capacity to annually produce 54,000 units of each product. Its unitcosts for each product at this level of activity are given below:Direct materialsDirect labourVariable manufacturing overheadTraceable fixed manufacturing overheadVariable selling expensesCommon fixed expensesDeluxe$ 14Regular$695.004.003.00910547.007$ 48$35Cost per unitThe company considers its traceable fixed manufacturing overhead to be avoidable, whereasits common fixed expenses are deemed unavoidable and have been allocated to productsbased on sales dollars.8. Assume that Abel normally produces and sells 40,200 Regular units and 30,200 Deluxe units per year. If Abeldiscontinues the Regular product line, its sales representatives could increase sales of Deluxe by 7,300 units. IfAbel discontinues the Regular product line, how much would profits increase or decrease?Profitincreasesby

The objective of the question is to determine the impact on Abel Company's profits if it…

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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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Required information. Cost Classifications (Algo) [The following information applies to the questions displayed below] Kubin Company's relevant range of production is 26,000 to 35,500 units. When it produces and sells 30,750 units, its average costs per unit are as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense Average Cost per Unit $8.50 $5.60 $ 3.10 1. Total amount of product cost 2. Total amount of period cost 3. Total amount of product cost 4 Total amount of period cost $6.60 $5.10 $.4.10 $2.00 $2.10 Exercise 1-8 (Algo) Product Costs and Period Costs; Variable and Fixed Costs [LO1-3, LO1-4] Required: 1. For financial accounting purposes, what is the total amount of product costs incurred to make 30,750 units? 2. For financial accounting purposes, what is the total amount of period costs incurred to sell 30,750 units? 3. For…
! Required information [The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $155 and $115, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 110,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha $ 24 23 Total common fixed expenses 432 22 23 19 22 $ 133 2. What is the company's total amount of common fixed expenses? Beta $ 12 26 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. 12 25 15 17 $ 107
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! Required information [The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $190 and $155, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 122,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha $ 40 34 21 29 26 29 $ 179 Beta Maximum price to be paid per pound $24 28 19 32 22 24 $ 149 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. 15. Assume that Cane's customers would buy a maximum of 94,000 units of Alpha and 74,000 units of Beta.…
Required information. [The following information applies to the questions displayed below.) Kubin Company's relevant range of production is 27,000 to 29,000 units. When it produces and sells 28,000 units, its average costs per unit are as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense Average Cost per Unit $8,70 $5.70 $3.20 $6.70 $5.20 $.4.20 $2.70 $.2.20 Required: 1. Assume the cost object is units of production: a. What is the total direct manufacturing cost incurred to make 28,000 units? b. What is the total indirect manufacturing cost incurred to make 28.000 units? 2. Assume the cost object is the Manufacturing Department and that its total output is 28.000 units. Next
Schonhardt Corporation's relevant range of activity is 4,000 units to 5,500 units. When it produces and sells 4,750 units, its average costs per unit are as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense If 4,500 units are produced, the total amount of fixed manufacturing cost incurred is closest to: Multiple Choice $27,550 $20,663 $19,238 Average Cost per Unit $ 8.00 $ 3.70 $2.05 $ 3.00 $ 1.35 $ 1.05 $14.250 $ 1.15 $ 1.05
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Dake Corporation's relevant range of activity is 2,600 units to 7,000 units. When it produces and sells 4,800 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 6.45 Direct labor $ 3.30 Variable manufacturing overhead $ 1.20 Fixed manufacturing overhead $ 2.50 Fixed selling expense $ 0.80 Fixed administrative expense $ 0.50 Sales commissions $ 0.60 Variable administrative expense $ 0.50 For financial reporting purposes, the total amount of product costs incurred to make 4,800 units is closest to:
[The following information applies to the questions displayed below.] Martinez Company's relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense Average Cost Per Unit $ 5.10 $ 2.60 $ 1.60 $4.00 $ 2.10 $ 2.10 $ 1.10 $ 0.55 11. If 8,000 units are produced, what is the total amount of manufacturing overhead cost incurred to support this level of production? What is this total amount expressed on a per unit basis? Note: Round your "per unit" answer to 2 decimal places. Total manufacturing overhead cost Manufacturing overhead per unit
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