Sell or Process FurtherJensen ManufacturingCompany makes a partiallycompleted assembly unit that it sells for $36 per unit.Normally, 42,000 units are sold each year. Variable unitcost data on the assembly are as follows:Direct material$10Direct labor8Variable manufacturing overhead 4The company is now using only 70% of its normalcapacity; it could fully use its normal capacity byprocessing the assembly further and selling it for $41per unit. If the company does this, material and laborcosts will each increase by $2 per unit and variableoverhead will go up by $1 per unit. Fixed costs willincrease from the current level of $160,000 to $180,000.Prepare an analysis showing whether Jensen shouldprocess the assemblies further.Use a negative sign with answer to only indicate a lossfrom processing assemblies further; otherwise do notuse negative signs with your answers.Sell of Process Further Differential Analysis$Differential revenueDifferential costsDirect materialDirect laborVariable overhead completed assembly unit that it sells for $36 per unit.Normally, 42,000 units are sold each year. Variable unitcost data on the assembly are as follows:Direct materialDirect laborVariable manufacturing overhead$1084The company is now using only 70% of its normalcapacity; it could fully use its normal capacity byprocessing the assembly further and selling it for $41per unit. If the company does this, material and laborcosts will each increase by $2 per unit and variableoverhead will go up by $1 per unit. Fixed costs willincrease from the current level of $160,000 to $180,000.Prepare an analysis showing whether Jensen shouldprocess the assemblies further.Use a negative sign with answer to only indicate a lossfrom processing assemblies further; otherwise do notuse negative signs with your answers.Sell of Process Further Differential Analysis$Differential revenueDifferential costsDirect materialDirect laborVariable overheadFixed costsAdditional income (loss) from processing further $

Differential analysis is a technique for making decisions that analyzes the net outcomes of two…

Sell or Process Further Jensen Manufacturing Company makes a partially completed assembly unit that it sells for $36 per unit. Normally, 42,000 units are sold each year. Variable unit cost data on the assembly are as follows: Direct material $10 Direct labor 8 Variable manufacturing overhead 4 The company is now using only 70% of its normal capacity; it could fully use its normal capacity by processing the assembly further and selling it for $41 per unit. If the company does this, material and labor costs will each increase by $2 per unit and variable overhead will go up by $1 per unit. Fixed costs will increase from the current level of $160,000 to $180,000. Prepare an analysis showing whether Jensen should process the assemblies further. Use a negative sign with answer to only indicate a loss from processing assemblies further; otherwise do not use negative signs with your answers. Sell of Process Further Differential Analysis Differential revenue $ Differential costs Direct material Direct labor Variable overhead

Sell or Process Further Jensen Manufacturing Company makes a partially completed assembly unit that it sells for $36 per unit. Normally, 42,000 units are sold each year. Variable unit cost data on the assembly are as follows: Direct material $10 Direct labor 8 Variable manufacturing overhead 4 The company is now using only 70% of its normal capacity; it could fully use its normal capacity by processing the assembly further and selling it for $41 per unit. If the company does this, material and labor costs will each increase by $2 per unit and variable overhead will go up by $1 per unit. Fixed costs will increase from the current level of $160,000 to $180,000. Prepare an analysis showing whether Jensen should process the assemblies further. Use a negative sign with answer to only indicate a loss from processing assemblies further; otherwise do not use negative signs with your answers. Sell of Process Further Differential Analysis Differential revenue $ Differential costs Direct material Direct labor Variable overhead

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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How do I prepare an analysis showing whether Jensen should process the assemblies further?
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Patriot Company manufactures flags in two sizes, small and large. The company has total fixed costs of $260,000 per year. Additional data follow. Sales price per unit Variable costs per unit Sales mix percent Small $ 26 $ 13 80% Large $33 $ 20 20% The company is considering buying new equipment that would increase total fixed costs by $51,500 per year and reduce the variable costs of each type of flag by $1 per unit. Break-even point in units Break-even point - Small Break-even point - Large Required: 1. Compute the weighted-average contribution margin without the new equipment. 2. Assume the new equipment is not purchased. Determine the break-even point in total sales units and the break-even point in units for each product. 3. Assume the new equipment is purchased. Compute the break-even point in total sales units and the number of units to sell for each product. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Assume the new…
not graded Sell or Process FurtherJensen Manufacturing Company makes a partially completed assembly unit that it sells for $44 per unit. Normally, 38,000 units are sold each year. Variable unit cost data on the assembly are as follows: Direct material $10 Direct labor 8 Variable manufacturing overhead 4 The company is now using only 70% of its normal capacity; it could fully use its normal capacity by processing the assembly further and selling it for $51 per unit. If the company does this, material and labor costs will each increase by $2 per unit and variable overhead will go up by $1 per unit. Fixed costs will increase from the current level of $160,000 to $225,000. Prepare an analysis showing whether Jensen should process the assemblies further.Use a negative sign with answer to only indicate a loss from processing assemblies further; otherwise do not use negative signs with your answers. Sell of Process Further Differential Analysis Differential revenue…
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