Plainfield Company manufactures part G for use in its production cycle. The full cost per unit for each of 10,000 units of part G manufactured per year by Plainfield are as follows: TB MC Qu. 11-40 (Algo) Plainfield Company manufactures part G for ...Plainfield Company manufactures part G for use in its production cycle. The full cost per unit for each of 10,000 units of part G manufactured per year by Plainfield are as follows:Direct materials.Direct laborVariable overheadFixed overheadA)Verona Company has offered to sell Plainfield 10,000 units of part G for $25 per unit. If Plainfield accepts Verona's offer, the released facilities could be used to save $45,000 in relevant costs in the manufacture ofpart H. In addition, $7 per unit of the fixed overhead applied to part G would be eliminated. Based solely on a short-term financial analysis, which alternative is more desirable and by what amount?D)E)AlternativeManufactureManufactureBuyBuyBuyAmount$ 10,000$ 85,000$611$ 105,000$ 135,000$ 10,000710$34

Name: Plainfield Company manufactures part G for use in its production cycle
Uploaded: 2024-03-20T06:32:49.000Z
Channel: Bartleby
Description: Plainfield Company manufactures part G for use in its production cycle. The full cost per unit for each of 10,000 units of part G manufactured per year by Plainfield are as follows: TB MC Qu. 11-40 (Algo) Plainfield Company manufactures part G for ..

The variable costs changes with change in number of units produced during the period. While…

Business

Accounting

TB MC Qu. 11-40 (Algo) Plainfield Company manufactures part G for... Plainfield Company manufactures part G for use in its production cycle. The full cost per unit for each of 10,000 units of part G manufactured per year by Plainfield are as follows: Direct materials Direct labor Variable overhead Fixed overhead Verona Company has offered to sell Plainfield 10,000 units of part G for $25 per unit. If Plainfield accepts Verona's offer, the released facilities could be used to save $45,000 in relevant costs in the manufacture of part H. In addition, $7 per unit of the fixed overhead applied to part G would be eliminated. Based solely on a short-term financial analysis, which alternative is more desirable and by what amount? native A) Manufacture Manufacture Buy $6 11 Amount $10,000 $ 85,000 $ 105,000 $ 135,000 $10,000 10 $34

TB MC Qu. 11-40 (Algo) Plainfield Company manufactures part G for... Plainfield Company manufactures part G for use in its production cycle. The full cost per unit for each of 10,000 units of part G manufactured per year by Plainfield are as follows: Direct materials Direct labor Variable overhead Fixed overhead Verona Company has offered to sell Plainfield 10,000 units of part G for $25 per unit. If Plainfield accepts Verona's offer, the released facilities could be used to save $45,000 in relevant costs in the manufacture of part H. In addition, $7 per unit of the fixed overhead applied to part G would be eliminated. Based solely on a short-term financial analysis, which alternative is more desirable and by what amount? native A) Manufacture Manufacture Buy $6 11 Amount $10,000 $ 85,000 $ 105,000 $ 135,000 $10,000 10 $34

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 36,000 Rets per year. Costs associated with this level of production and sales are given below: Unit Total Direct materials $ 20 $ 720,000 Direct labor 10 360,000 Variable manufacturing overhead 3 108,000 Fixed manufacturing overhead 9 324,000 Variable selling expense 2 72,000 Fixed selling expense 6 216,000 Total cost $ 50 $ 1,800,000 The Rets normally sell for $55 each. Fixed manufacturing overhead is $324,000 per year within the range of 31,000 through 36,000 Rets per year. Required: 1. Assume that due to a recession, Polaski Company expects to sell only 31,000 Rets through regular channels next year. A large retail chain has offered to purchase 5,000 Rets if Polaski is willing to accept a 16% discount off the regular price. There would be no sales commissions on this order; thus, variable selling expenses would be slashed by…
Lynch Company manufactures and sells a single product. The following costs were incurred during the company's first year of operations: Variable costs per unit: Manufacturing: Direct materials $ 14 Direct labor $ 8 Variable manufacturing overhead $ 2 Variable selling and administrative $2 Fixed costs per year: Fixed manufacturing overhead $ 250,000 Fixed selling and administrative $ 160,000 During the year, the company produced 25,000 units and sold 21,000 units. The selling price of the company's product is $47 per unit. Required: Assume the company uses absorption costing: Compute the unit product cost. Prepare an income statement for the year. Assume the company uses variable costing: Compute the unit product cost. Prepare an income statement for the year.
Harris Company manufactures and sells a single product. A partially completed schedule of the company's total costs and costs per unit over the relevant range of 55,000 to 95,000 units is given below: Required: 1. Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. 2. Assume that the company produces and sells 85,000 units during the year at a selling price of $8.67 per unit. Prepare a contribution format income statement for the year. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. (Round the per unit variable cost and fixed cost to 2 decimal places.) Total cost: Variable cost Fixed cost Total cost Cost per unit: Variable cost Fixed cost Total cost per unit $ $ 55,000 Units Produced and Sold 75,000 187,000 320,000 507,000 95,000
Bambina corporation, manufacturer of beauty products has the following partially completed manufacturing cost data for its manufacturing The relevant range of production is 800,000 to 1,200,000 per year What is the total cost per unit for the 800,000 units produced
Cane Company manufactures two products called Alpha and Beta that sell for $140 and $100, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 106,000 units of each product. Its average cost per unit for each product at this level of activity is given below:
Han Products manufactures 22,000 units of part S-6 each year for use on its production line. At this level of activity, the cost per unit for part S-6 is: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total cost per part $ 3.60 10.00 2.40 6.00 $ 22.00 An outside supplier has offered to sell 22,000 units of part S-6 each year to Han Products for $20 per part. If Han Products accepts this offer, the facilities now being used to manufacture part S-6 could be rented to another company at an annual rental of $72,000. However, Han Products has determined that two-thirds of the fixed manufacturing overhead being applied to part S-6 would continue even if part S-6 were purchased from the outside supplier. Required: What is the financial advantage (disadvantage) of accepting the outside supplier's offer?
Scott Corporation produces a part for use in the production of one of its products. The per-unit costs associated with the annual production of 1,000 units of this part are as follows: Direct Materials $10.50 $24.00 Direct labor Variable factory overhead $5.50 Fixed factory overhead $12.00 Total Costs $52.00 $5,000 of the fixed factory overhead costs associated with the production of this product are common fixed costs. Larson Company has offered to sell 1,000 units of the same part to Scott Corporation for $42 per unit. Scott should: Select one: a. buy the part, because this would save $10.00 per unit. X b. buy the part, because this would save the company $5,000 annually. c. make the part, because this would save the company $5,000 annually. d. make the part, because this would save $2.00 per unit.
Crane Co. estimates that it will incur $805000 of overhead costs each year in its three main departments, machining ($460000), inspections ($230000) and packing ($115000). The machining department works 4000 hours per year, there are 600 inspections per year, and the packing department packs 1000 orders per year. Information about Crane's two products and their estimated use of cost drivers is as follows: Machining hours Inspections Orders packed Direct labor hours Product X 1000 100 350 1700 Product Y 3000 500 650 1800 If traditional costing based on direct labor hours is used, how much overhead will be assigned to Product X?
Harris Company manufactures and sells a single product. A partially completed schedule of the company's total costs and costs per unit over the relevant range of 55,000 to 95,000 units is given below: Required: 1. Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. 2. Assume that the company produces and sells 85,000 units during the year at a selling price of $8.90 per unit. Prepare a contribution format income statement for the year. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. (Round the per unit variable cost and fixed cost to 2 decimal places.) Total cost: Variable cost Fixed cost Total cost Cost per unit: Variable cost Fixed cost Total cost per unit 55,000 Units Produced and Sold $ $ $ 75,000 Units Produced and Sold 192,500 330,000 522,500 $ 0.00 $ 95,000 Units Produced and Sold…
Harris Company manufactures and sells a single product. A partially completed schedule of the company's total costs and costs per unit over the relevant range of 53,000 to 93,000 units is given below: Required: 1. Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. 2. Assume that the company produces and sells 83,000 units during the year at a selling price of $9.29 per unit. Prepare a contribution format income statement for the year. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 1 Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. (Round the per unit variable cost and fixed cost to 2 decimal places.) Total cost Variable cost Fixed cost Total cost Cost por unit: Required 2 Variable cost Fixed cost Total cost per unit 53,000 Units Produced and Sold $ S $ Required 1 Required 2 73,000 Units Produced and Sold 185,500 350,000…
Sherman Manufacturing Company currently manufactures a component used in one of its products. The annual production costs for 11,300 components are as follows: Material cost Labor cost Overhead Batch-level set-up costs for year Product-level manager's salary Allocated facility-level costs $ 7 per unit $ 3 per unit $ 1 per unit $ 5,700 $ 17,700 $ 11,700 An outside company has offered to supply 11,300 units of the component for $14.40 each. If the company outsources the component, it will be able to rent out the idle factory space for $2,000 per month but will not terminate the product manager. Required: a. Which items are not relevant to this outsourcing decision? b. Identify any opportunity costs associated with this decision. c. Prepare a quantitative analysis that indicates whether the component should be outsourced. Complete this question by entering your answers in the tabs below. Required A Required B Required C Prepare a quantitative analysis that indicates whether the component…
Delta Company produces a single product. The cost of producing and selling a single unit of this product at the company’s normal activity level of 60,000 units per year is: Direct materials $ 10.00 Direct labor $ 3.00 Variable manufacturing overhead $ 2.00 Fixed manufacturing overhead $ 4.00 Variable selling and administrative expense $ 2.50 Fixed selling and administrative expense $ 2.40 The normal selling price is $25 per unit. The company’s capacity is 75,000 units per year. An order has been received from a mail-order house for 10,000 units. What is the minimum price that should be charged per unit for this special order? a $25 b $23.90 c $15 d $17.50