### Total Cost of Producing 18,000 Monitors| Cost Component | Total Cost | Unit Cost ||---------------------------------------|-------------|-----------|| **Direct materials** | $2,160,000 | $120 || **Direct labor** | $1,224,000 | $68 || **Variable factory overhead** | $630,000 | $35 || **Fixed manufacturing overhead** | $504,000 | $28 || **Fixed non-manufacturing overhead** | $756,000 | $42 || **Total** | $5,274,000 | $293 |You are asked to review the intern's estimate before presenting the information to management. The company's controller believes there may be inaccuracies due to costs that should not be included. Specifically, the current labor force will be terminated with no associated costs and all materials need to be sourced from suppliers. Variable manufacturing overhead costs will decrease by $55,000, while non-manufacturing costs remain unchanged.#### Make or Buy Decisions**Differential Analysis Report**- **Purchase price of 18,000 monitors:** $3,816,000#### Differential Cost to Make:- **Direct materials:** $2,160,000- **Direct labor:** $1,224,000- **Overhead:** (not specified)- **Differential income (loss) from making monitors:** (not specified)> **Note:** The overhead cost and differential income (loss) fields are incomplete and require further input or calculation.

Avoidable costs are those costs which can be avoided if a particular product line is not continued.…

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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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Subject: acounting
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AIP 10.7 Overhead Costs from a New Factory Karsten is one of the premier carpet manufacturers in the world. It manufactures carpeting for both residential and commercial applications. Home sales and commercial sales each account for about 50 percent of total revenues. The firm is organized into three departments: Manu facturing, Residential Sales, and Commercial Sales. Manufacturing is a cost center and the two sales departments are profit centers. The full cost of each roll of carpeting produced (including fully absorbed overhead) is transferred to the sales department ordering the carpet. The evaluation of the sales departments includes the fully absorbed cost of each roll as the transfer price. The current manufacturing plant is operating at capacity. A new plant is being built that will more than double capacity. Within two years, management believes that its businesses will grow such that most of the excess capacity will be eliminated. When the new plant comes online, the plan is…
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Assuming the current ratio equals 2, which of the following would cause the current ratio to increase? O Accrual for payroll. Declaration of cash dividend. O Payment for inventory purchased on account. O Inventory purchased on account.
Recompute the effect of the order and make a recommendation to management. Indicate the better alternative in and its net advantage
2023 Income Statement Sales Cost of Goods Sold $ 770,000 $ 340,000 Depreciation Expense $ 95,000 Earnings before Interest and Taxes $ 335,000 Interest Expense $ 19,800 Taxable Income Tax Expense Net Income Dividends Paid Retained Earnings $ 315,200 $ 104,016 $ 211,184 $ 10,300 $ 200,884 Balance Sheet End of 2023 Beginning of 2023 Cash $ 280,000 $ 122,000 Accounts Receivable $ 50,000 $ 22,300 Inventory $ 188,000 $ 119,000 Net Fixed Assets $ 630,000 $ 630,000 Total Assets $1,148,000 $ 893.300 Accounts Payable Long-term Debt $ 158,000 $ $ 14,116 $ 71,800 121,500 Common Stock $ 375,000 $ 300,000 Accumulated Retained Earnings $ 600,884 $ 400,000 Total Liabilities & Shareholders' Equity $1,148,000 $ 893,300 Consider the financial statements displayed above. Based on these statements, calculate the firm's quick ratio as of the end of 2023. Note: Report your answer as a number rounded to two decimal points.
Variable costs: Direct materials $0.15 Direct labor 0.06 Variable overhead 0.11 Fixed overhead 0.30 Total cost $0.62

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