The production department is proposing the purchase of an automatic insertion machine. It has identified three machines and has asked the accountant to analyze them to determinewhich one has the best average rate of return.Machine A$43,529.50 $80,697.00Machine B Machine C$64,675.95310,925.00 268,990.00 431,173.00Estimated average incomeAverage investmentOa. Machine BOb. Machine AOc. Machine COd. Machines B and C have the same preferred average rate of return.

Average rate of return (ARR) = ARR is a financial ratio that calculates the return generated from…

Answered: The production department is proposing…

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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Activity Rate Travel Deliveries $2 per mile driven. $ 50 per delivery $ 22 per phone call Customer service Two of the company's many customers include Customer A and Customer B. These two customers consumed the company's activities as follows: Total Expected Activity Customer A Customer B 250 5 12 Activity Cost Pool Travel (number of miles driven) Deliveries (number of deliveries) Customer service (number of phone calls) How much cost would be assigned from the Travel activity to Customer A? Multiple Choice $170 $60 $680 340 15 20
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bloii Q2. Read the following case relating to a toy manufacturing company produces two products: Product A and B and solve the questions given at the end of the case using the data. The budgeted cost information for each product is as follows. Particulars Product-A Product- B Material 30 40 Labor 20 15 Production overhead cost incurred Machine cost 300000 700000 Set up cost Quality inspection cost Total 250000 1250000 For each of product "A" and "B" we are also given the following information: Product "A" Product "B" No of units produced No production runs No of inspection 20000 40000 180 100 300 400 No of machine hours 50000 50000 Requirements: 1. Calculate the cost of each unit of product "A" and "B" under absorption (Traditional method) costing using the number of units as basis of absorption. 2. Calculate the cost of each unit of product "A" and "B" using ABC system. In this case we are required to suggest the toy company whether to adopt ABC or not.
Calculating ABC Unit Costs Perkins National Bank has collected the following information for four activities and two types of credit cards: Activity Driver Classic Gold Activity Rate ($) Processing transactions Transactions processed 12,000 7,200 0.20 Preparing statements Number of statements 12,000 7,200 0.95 Answering questions Number of calls 24,000 36,000 4.00 Providing ATMs ATM transactions 48,000 14,400 1.50 There are 4,900 holders of Classic cards and 20,400 holders of Gold cards. Required: Calculate the unit cost (rounded to the nearest cent) for Classic and Gold credit cards. Unit cost for Classic: Unit cost for Gold:
please help me solve this question, it is saying this is the wrong answer. thanks! please answer with steps computation explanation do that I can understand the whole process no copy paste
Simplifying the ABC System: Approximately Relevant ABC Systems Patterson Company produces wafers for integrated circuits. Data for the most recent year are provided: Activity Inserting and sorting process activities: Expected Consumption Ratios Driver Wafer A Wafer B 1 Developing test programs $ 50,000 Engineering hours 0.25 0.75 Making probe 2. 60,000 Development hours 0.10 0.90 cards Testing products 600,000 Test hours 0.60 0.40 Setting up 4. 135,000 Number of batches 0.55 0.45 batches Engineering Number of change 5. 90,000 0.15 0.85 design orders Handling wafer 6. 300,000 Number of moves 0.45 0.55 lots 7. Inserting dies 700,000 Number of dies 0.70 0.30 Procurement process activities: Purchasing Number of 8. 400,000 0.20 0.80 materials purchase orders Unloading 9. 60,000 materials Number of receiving orders 0.35 0.65 Inspecting 10. 75,000 Inspection hours 0.65 0.35 materials 11. Moving materials 500,000 Distance moved 0.50 0.50 12. Paying suppliers 30,000 Number of invoices 0.30 0.70…
E4-4 Altex Inc. manufactures two products: car wheels and truck wheels. To determine the amount of overhead to assign to each product line, the controller, Robert Hermann, has developed the following information. Estimated wheels produced Direct labor hours per wheel Car 40,000 1 Total estimated overhead costs for the two product lines are $770,000. Instructions (a) Compute the overhead cost assigned to the car wheels and truck wheels, assuming that direct labor hours is used to allocate overhead costs. Activity Cost Pools Setting up machines Assembling Inspection Truck 10,000 3 (b) Hermann is not satisfied with the traditional method of allocating overhead because he believes that most of the overhead costs relate to the truck wheels product line because of its complexity. He therefore develops the following three activity cost pools and related cost drivers to better understand these costs. Expected Use of Cost Drivers 1,000 setups 70,000 labor hours 1,200 inspections Estimated…
ABC Company has an ABC system with three pools: Total cost in cost pool Activity Machine setups Customer service Maintenance $18,500 $5,000 Cost Driver $29,000 #setups O $9,000 #orders not enough information machine- hours $13,000 $6,000 $10,000 Compute total capacity costs allocated to product X. Activity volume (#cost driver units) Product X Product Y Total 45 15 25 20 5 25 65 20 50
Simplifying the ABC System: Equally Accurate Reduced ABC Systems Selected activities and other information are provided for Patterson Company for its most recent year of operations. Expected Consumption Activity 7. Inserting dies 8. Purchasing materials 1. Developing test programs 3. Testing products ABC assignments Total overhead cost Required: Driver Number of dies Number of purchase orders Engineering hours Test hours Wafer A Wafer B Quantity 1,900,000 X والے 1,900 9,000 19,000 3. What if the two activities were 1 and 3? Repeat Requirements 1 and 2. Wafer A 0.7 0.2 Ratios 0.25 0.6 $165,000 1. Form reduced system cost pools for activities 7 and 8. Do not round interim calculations. Round your final answers to the nearest dollar. Inserting dies cost pool Purchasing cost pool Wafer B 0.3 2. As the costs of the reduced system cost pools to Wafer A and Wafer B. Do not round interim calculations. Round your final answers to the nearest dollar. 0.8 0.75 0.4 $165,000 $330,000
Calculating ABC Unit Costs Perkins National Bank has collected the following information for four activities and two types of credit cards: Activity Driver Classic Gold Activity Rate ($) Processing transactions Transactions processed 12,000 7,200 0.20 Preparing statements Number of statements 12,000 7,200 0.95 Answering questions Number of calls 24,000 36,000 4.00 Providing ATMs ATM transactions 48,000 14,400 1.50 There are 5,000 holders of Classic cards and 21,000 holders of the Gold cards. Required: Calculate the unit cost (rounded to the nearest cent) for Classic and Gold credit cards. Unit cost for Classic $fill in the blank 1 Unit cost for Gold $fill in the blank 2

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