SixthZ makes custom cornhole boards and mass-produced bean bags for the cornhole boards, which are also separately sold. It rents sewing machines on as-needed basis. It needs one sewing machine for every 5,000 bags produced. The cost of this equipment is an example of a: Group of answer choices Step cost Variable cost Fixed cost

SixthZ makes custom cornhole boards and mass-produced bean bags for the cornhole boards, which are also separately sold. It rents sewing machines on as-needed basis. It needs one sewing machine for every 5,000 bags produced. The cost of this equipment is an example of a: Group of answer choices Step cost Variable cost Fixed cost

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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Splish World manufactures a workout product, CardioBands, that helps users raise their heartbeats without exerting too much effort. The per-unit costs to manufacture and sell this rubber-band-based product are as follows. DM DL Variable-MOH Fixed-MOH Variable SG&A Fixed SG&A Total $1.10 0.75 0.30 1.55 0.25 0.95 $4.90 Splish World normally sells its CardioBands for $15 each. Jerry's Gym wants to purchase 50 of these workout products to incorporate in two of its cardio classes, but it wants a special price of $220 for the complete order. Splish World has enough production capacity to take on this special order.
Multiproduct CVP and decision making. Crystal Clear Products produces two types of water filters.One attaches to the faucet and cleans all water that passes through the faucet. The other is a pitcher-cumfilterthat only purifies water meant for drinking.The unit that attaches to the faucet is sold for $90 and has variable costs of $25.The pitcher-cum-filter sells for $110 and has variable costs of $20.Crystal Clear sells two faucet models for every three pitchers sold. Fixed costs equal $1,200,000.1. What is the breakeven point in unit sales and dollars for each type of filter at the current sales mix?2. Crystal Clear is considering buying new production equipment. The new equipment will increase fixedcost by $208,000 per year and will decrease the variable cost of the faucet and the pitcher units by $5 and$10, respectively. Assuming the same sales mix, how many of each type of filter does Crystal Clear needto sell to break even?3. Assuming the same sales mix, at what total sales level…
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Portsmouth Company makes upholstered furniture. Its only variable cost is direct materials. The demand for the company's products far exceeds its manufacturing capacity. The bottleneck (or constraint) in the production process is upholstery labor-hours. Information concerning three of Portsmouth's products appears below: Recliner Sofa Love Seat Selling price per unit $ 1,158 $ 1,950 $ 1,400 Variable cost per unit $ 750 $ 1,300 $ 1,000 Upholstery labor-hours per unit 6 hours 13 hours 5 hours Required: Portsmouth is considering paying its upholstery laborers hourly compensation, in addition to their usual salaries, to work overtime. Assuming this extra time would be used to produce sofas, up to how much of an overtime rate per hour should the company be willing to pay to keep the upholstery shop open after normal working hours? A small nearby upholstering company has offered to upholster furniture for Portsmouth at a price of $45 per hour. The management of…
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Portsmouth Company makes upholstered furniture. Its only variable cost is direct materials. The demand for the company's products far exceeds its manufacturing capacity. The bottleneck (or constraint) in the production process is upholstery labor-hours. Information concerning three of Portsmouth's products appears below: Recliner Sofa Love Seat Selling price per unit $ 1,050 Variable cost per unit Upholstery labor-hours per unit $ 750 $ 2,090 $ 1,250 $ 1,500 $ 1,100 6 hours 14 hours 5 hours Required: 1. Portsmouth is considering paying its upholstery laborers hourly compensation, in addition to their usual salaries, to work overtime. Assuming that this extra time would be used to produce sofas, up to how much of an overtime rate per hour should the company be willing to pay to keep the upholstery shop open after normal working hours? 2. A small nearby upholstering company has offered to upholster furniture for Portsmouth at a price of $57 per hour. The management of Portsmouth is…
College Life produces sweatshirts for college organizations and uses hybrid costing. It reports the following for its fabrication process. Customers choose screen-printed or embroidered logos. Direct materials Conversion Fabrication process costs Customer choices-Logo types Screen-printed Embroidered Required: a. Compute the cost per unit for both the screen-printed and embroidered sweatshirts. b. If the company has a target markup of 30% above cost, compute the selling price for each type of sweatshirt. c. For the current period, the company added direct materials into production that should have produced 5,700 sweatshirts. Actual production was 5,415 (nondefective) sweatshirts. Compute the yield for this period. Express the answer in percent. Required 1 Required 2 Required 3 Per Unit $ 26 13 Complete this question by entering your answers in the tabs below. $39 $ 6 $ 12 Yield For the current period, the company added direct materials into production that should have produced 5,700…
The jarvis corporation produces bucket loader assemblies for the tractor industry. The product has a long term life expectancy. Jarvis has a traditional manufacturing and inventory system. Jarvis is considering the installation of a just-in-time inventory system to improve its cost structure. In doing a full study using its manufacturing engineering team as well as consulting with industry JIT experts and the main vendors and suppliers of the components Jarvis uses to manufacture the bucket loader assemblies, the following incremental cost-benefit relevant information is available for analysis: The Jarvis cost of investment capital hurdle rate is 15%. One time cost to rearrange the shop floor to create the manufacturing cell workstations is $275,000. One time cost to retrain the existing workforce for the JIT required skills is $60,000. Anticipated defect reduction is 40%. Currently there is a cost of quality defect assessment listed as $150,000 per year. The setup time for…
The Quality Athletics Company produces a wide variety of outdoor sports equipment. Its newest division, Golf Technology, manufactures and sells a single product: AccuDriver, a golf club that uses global positioning satellite technology to improve the accuracy of golfers' shots. The demand for AccuDriver is relatively insensitive to price changes. The following data are available for Golf TechnoloTotal annual fixed costs $30,000,000 Variable cost per AccuDriver $440 Number of AccuDrivers sold each year 155,000 Average operating assets invested in the division $ 50,000,0001. Compute Golf Technology's ROI if the selling price of AccuDrivers is $ 740 per club. 2. If management requires an ROI of at least 20% from the division, what is the minimum selling price that the Golf Technology Division should charge per AccuDriver club? 3. Assume that Quality Athletics judges the performance of its investment centres on the basis of RI rather than ROI. What is the minimum selling price that Golf…
Portsmouth Company makes upholstered furniture. Its only variable cost is direct materials. The demand for the company's products far exceeds its manufacturing capacity. The bottleneck (or constraint) in the production process is upholstery labor-hours. Information concerning three of Portsmouth's products appears below: Selling price per unit Variable cost per unit Upholstery labor-hours per unit Required 1 Required 2 Required 3 Recliner $ 1,184 $ 800 Complete this question by entering your answers in the tabs below. Additional contribution margin per hour Required: 1. Portsmouth is considering paying its upholstery laborers hourly compensation, in addition to their usual salaries, to work overtime. Assuming that this extra time would be used to produce sofas, up to how much of an overtime rate per hour should the company be willing to pay to keep the upholstery shop open after normal working hours? 2. A small nearby upholstering company has offered to upholster furniture for…