Silver Bowls for You Inc. utilizes operation costing as it produces large batches of very similar products but offers customer customization foł some of Its SHelIngs Below is summary cost data for the month of June: Product A Product B 8,000 $1,700,000 Totals Units produced Total Materials 26,000 34,000 $1,150,000 $2,850,000 Conversion cost data follows for the 34,000 units produced. Please note that the custom design costs are only attributed to Product A. Conversion costs: Assembly Painting Custom design $300,000 $1,000,000 $180,000 What is the cost per unit for product A and B respectively if operation costing is used? (Round any intermediary calculations to the nearest cent. Round final answer to the nearest dollar.) ..... O A. $88, $256 O B. $88, $251 C. $89, $251 O D. $82, $251

Silver Bowls for You Inc. utilizes operation costing as it produces large batches of very similar products but offers customer customization foł some of Its SHelIngs Below is summary cost data for the month of June: Product A Product B 8,000 $1,700,000 Totals Units produced Total Materials 26,000 34,000 $1,150,000 $2,850,000 Conversion cost data follows for the 34,000 units produced. Please note that the custom design costs are only attributed to Product A. Conversion costs: Assembly Painting Custom design $300,000 $1,000,000 $180,000 What is the cost per unit for product A and B respectively if operation costing is used? (Round any intermediary calculations to the nearest cent. Round final answer to the nearest dollar.) ..... O A. $88, $256 O B. $88, $251 C. $89, $251 O D. $82, $251

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter7: Variable Costing For Management analysis

Section: Chapter Questions

Problem 3PA: During the first month of operations ended May 31, Big Sky Creations Company produced 40,000...

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During the first month of operations ended May 31, Big Sky Creations Company produced 40,000 designer cowboy boots, of which 36,000 were sold. Operating data for the month are summarized as follows: During June, Big Sky Creations produced 32,000 designer cowboy boots and sold 36,000 cowboy boots. Operating data for June are summarized as follows: Instructions 1. Using the absorption costing concept, prepare income statements for (a) May and (b) June. 2. Using the variable costing concept, prepare income statements for (a) May and (b) June. 3. a. Explain the reason for the differences in operating income in (1) and (2) for May. b. Explain the reason for the differences in operating income in (1) and (2) for June. 4. Based on your answers to (1) and (2), did Big Sky Creations Company operate more profitably in May or in June? Explain.
Rouse manufactures coffee mugs that it sells to other companies for customizing with their own logos. Rouse prepares flexible budgets and uses a standard cost system to control manufacturing costs. The standard unit cost of a coffee mug is based on static budge volume of 59,700 coffee mugs per month: 4. Journalize the actual manufacturing overhead and the allocated manufacturing overhead. Journalize the movement of all production costs from Work-in-Process InventoryJournalize the adjusting of the Manufacturing Overhead account . 5. Rouse intentionally hired more highly skilled workers during JulyHow did this decision affect the cost variances ? Overall , was the decision wise?
Daba Company manufactures two products, Product F and Product G. The company expects to produce and sell 1,400 units of Product F and 1,800 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 Overhead Activity Cost Pool Machine setups Purchase orders Order size Cost $ 13,200 $ 85,680 $ 26,840 Overhead cost per unit Product F Product F 120 setups 882 orders 1,270 hours Product G Expected Activity Product G Required: Using the activity-based costing approach, determine the overhead cost per unit for each product. (Round your answers to 2 decimal places.) 80 setups 1,638 orders 1,170 hours Total 208 setups 2,520 orders 2,448 hours
Finch Cameras, Incorporated manufactures two models of cameras. Model ZM has a zoom lens; Model DS has a fixed lens. Finch uses an activity-based costing system. The following are the relevant cost data for the previous month: Direct Cost per Unit Direct materials Direct labor Category Unit level Batch level Product level Facility level Total Estimated Cost $ 25,960 48,360 90,000 180,000 $ 344,320 Type of Product Model ZM Model DS Required B Model ZM $20.40 28.80 Cost Driver Number of units. Number of setups. Number of TV commercials Number of machine hours Finch's facility has the capacity to operate 2,700 machine hours per month. Required a. Compute the cost per unit for each product. b. The current market price for products comparable to Model ZM IS $119 and for DS is $72. If Finch sold all of its products at the market prices, what was its profit or loss for the previous month? c. A market expert belleves that Finch can sell as many cameras as it can produce by pricing Model ZM at…
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Thornton Cameras, Incorporated manufactures two models of cameras. Model ZM has a zoom lens; Model DS has a fixed lens. Thornton uses an activity-based costing system. The following are the relevant cost data for the previous month: Direct Cost per Unit Direct materials Direct labor Model ZM $ 20.50 29.00 Model DS $ 9.00 11.00 Category Unit level Batch level. Product level Facility level Total Estimated Cost Cost Driver $ 24,990 Number of units 45,120 Number of setups 88,750 228,000 Number of TV commercials Number of machine hours $ 386,860 Amount of Cost Driver ZM: 2,450 units; DS: 9,450 units ZM: 24 setups; DS: 24 setups ZM: 16; DS: 9 ZM: 400 hours; DS: 800 hours Thornton's facility has the capacity to operate 3,600 machine hours per month. Required a. Compute the cost per unit for each product. b. The current market price for products comparable to Model ZM is $126 and for DS is $90. If Thornton sold all of its products at the market prices, what was its profit or loss for the…
Xie Company identified the following activities, costs, and activity drivers for this year. The company manufactures two types of go- karts: Deluxe and Basic. Activity Handling materials Inspecting product Processing purchase orders Paying suppliers Insuring the factory. Designing packaging Activity Required: Compute the activity rate for each activity, assuming the company uses activity-based costing. (Round activity rate answers to 2 decimal places.) Handling material Inspecting product Processing orders Paying suppliers Insuring factory Designing packaging Expected Costs $700,000 975,000 180,000 250,000 375,000 150,000 Expected Costs $ $ Expected Activity 100,000 parts 1,500 batches 700 orders 500 invoices 40,000 square feet 2 models. 700,000 975,000 180,000 250,000 375,000 150,000 2,630,000 Activity Driver 100,000 parts 1,500 batches 700 orders 500 invoices 40,000 square feet 2 models Activity Rate
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Feldpausch Corporation has provided the following data from its activity-based costing system: Activity Cost Pool Assembly Processing orders Inspection Multiple Choice O The company makes 770 units of product W26B a year, requiring a total of 1,800 machine-hours, 48 orders, and 35 inspection-hours per year. The product's direct materials cost is $51.46 per unit and its direct labor cost is $13.35 per unit. The product sells for $135.40 per unit. According to the activity-based costing system, the product margin for product W26B is: (Round your intermediate calculations and final answers to 2 decimal places.) O O $7,059.42 $4,602.42 $6,033.30 Total Cost $ 1,495,676 $ 53,658 $ 147,420 $54,354.30 Total Activity machine-hours. 58,700 1,800 orders 2,100 inspection-hours
Xie Company identified the following activities, costs, and activity drivers for this year. The company manufactures two types of go- karts: Deluxe and Basic. Activity Handling materials Inspecting product Processing purchase orders Paying suppliers Insuring the factory Designing packaging Production volume Parts required Batches made Purchase orders Invoices Space occupied Models Assume that the following information is available for the company's two products for the first quarter of this year. Deluxe Model 10,000 units 20,000 parts Basic Model 30,000 units 30,000 parts 100 batches 20 orders 10 invoices 7,000 sq. ft 1 model Deluxe Activity Handling materials Inspecting product Processing orders Paying suppliers Insuring factory Designing packaging Expected Costs $715,000 990,000 195,000 265,000 390,000 165,000 Required: Compute activity rates for each activity and assign overhead costs to each product model using activity-based costing (ABC). What is the overhead cost per unit of…