View PoliciesCurrent Attempt in ProgressHartley Company produces two products, Flower andPlanter. Flower is a high-volume item totaling 20000 unitsannually. Planter is a low-volume item totaling only 6000unitsper year. Flower requires 1 hour of direct labor forcompletion, while each unit of Planter requires 2 hours.Therefore, total annual direct labor hours are 32000(20000+ 12000). Expected arnnual manufacturingoverhead costs are $660000. Hartley uses a traditionalcosting system and assigns overhead based on direct laborhours. Each unit of Planter would be assigned overhead ofO need more information to compute.O $25.38.O $20.63.O $41.25.

Meaning of Direct labor overhead:Direct Labor cost such as payment for production hours are directly…

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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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Melbourne Corporation has traditionally made a subcomponent of its major product. Annual production of 30,000 subcomponents results in the following costs: Direct materials $ 250,000 Direct labor $ 200,000 Variable manufacturing overhead $ 190,000 Fixed manufacturing overhead $ 120,000 Melbourne has received an offer from an outside supplier who is willing to provide the 30,000 units of the subcomponent each year at a price of $28 per unit. There would be no effect of this decision on the total fixed manufacturing overhead of the company. Melbourne knows that the facilities now being used to manufacture the subcomponent could be rented to another company for revenue of $80,000 per year if the subcomponent were purchased from the outside supplier. The financial advantage (disadvantage) of making the subcomponent would be: Multiple Choice $0 $280,000 $120,000 $200,000
SixthZ incurred the following costs during 2018: Variable costs treehouse Manufacturing: Direct Materials $500 Direct Labor $270 VMO $40 Variable Selling & Admin $75 Fixed costs per year Fixed Manufacturing Overhead $125,000 Fixed Selling & Admin $60,000 During the year, SixthZ produced 1,100 treehouses and sold 950 treehouses. The selling price of each set was $1,000. Assuming SixthZ uses variable costing, what is the unit product cost? O $941.58 O $885 O $923.64 O $810
Whispering Winds Inc. has been manufacturing capacity, and variable manufacturing and direct labour costs per unit to make the A supplier offers to make the lampshades per year. variable manufacturing costs will be its own shades for its table lamps. The company is currently operating at 100% of overhead is charged to production at the rate of 50% of direct labour costs. The direct materials lampshades are $4.70 and $5.60, respectively. Normal production is 48,800 table lamps at a price of $13.50 per unit. If Whispering Winds Inc. accepts the supplier's offer all eliminated, but the $41.300 of fixed manufacturing overhead currently being charged to the lampshades will have to be absorbed by other products
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Santana Rey expects sales of Business Solutions’ line of computer workstation furniture to equal 300 workstations (at a sales price of $3,700 each) for 2021. The workstations’ manufacturing costs include the following. Direct materials $ 760 per unit Direct labor $ 300 per unit Variable overhead $ 60 per unit Fixed overhead $ 14,400 per year Selling and administrative expenses for these workstations follow. Variable $ 35 per unit Fixed $ 3,500 per year Santana is considering how many workstations to produce in 2021. She is confident that she will be able to sell any workstations in her 2021 ending inventory during 2022. However, Santana does not want to overproduce as she does not have sufficient storage space for many more workstations. Required: 1. Complete the following income statements using absorption costing. 2. Complete the following income statements using variable costing. 3. Which costing method, absorption or variable, yields the higher income when 320 workstations are…

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