Your manufacturing company is interested in developing a cost model to price a AM part that will be manufactured for production. Based on data that they have collected: Machine and ancillaryequipment cost : $1,000,000 Equipment depreciation cost per year: $130,000 Machine Maintenance cost per year: $50,000 Machine operator cost per hour : $40/hr Set up and prep time foreach build : 30 min Post processing time per build: 1 hr Material Cost per Kg: $275/kg Amount of material needed per part: 100mgs/part They estimate the following: a. Number of parts madeper year: 60,000 b. Each build can build 200 parts simultaneously on a single platform c. Build time for each platform of 200 parts: 25 hrs d. The factory will run 24/7 for 200 days in a year.Under this scenario what will be the cost per part ?

Given information:Machine and ancillary equipment cost: $1,000,000Equipment depreciation cost per…

Answered: Your manufacturing company is…

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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Robo-Lawn is a lean manufacturer of robotic lawn mowers. The company budgets $800,000 of conversion costs and 10,000 production hours for this year. The manufacturing of each mower requires 5 production hours and $250 of raw materials. During a recent quarter, the company produced 600 mowers and sold 580 mowers. Each mower is sold for $1,000. Required: 1. Compute the conversion cost rate per mower. 2. Prepare journal entries to record (a) purchase of raw materials on credit, (b) applied conversion costs to production, (c) sale of 580 mowers on credit, and (d) cost of goods sold and finished goods inventory. I just need help on D. It needs Cost of goods sold, Finished goods inventory, and Work in process inventory.
Paradise Marine Sails manufactures sails for sailboats. The company’s capacity is 29,000 sails per month. They are currently producing 25,000 sails a month. Current production cost can be found in the chart below: Sales Price $200 Variable Cost Manufacturing Cost $100 Administrative Cost $50 Total Fixed Cost Manufacturing $500,000 Administrative $480,000 Should you accept a special order at a price of $170 for 3000 sails? Fixed cost will increase by $9,000 to produce these sails. Give a numerical justification Would your answer be different if the company was currently producing 28,000 sails?
Use the 5-Step Decision Making Process to evaluate the following decision: St. Augustine Bicycles has been manufacturing its own wheels for its bikes. The company is currently operating at 100% capacity, and variable manufacturing overhead is charged to production at the rate of 30% of direct labor cost. The direct materials and direct labor cost per unit to make the wheels are $3.00 and $3.60 respectively. Normal production is 200,000 wheels per year. A supplier offers to make the wheels at a price of $8 each. If the bicycle company accepts this offer, all variable manufacturing costs will be eliminated, but the $84,000 of fixed manufacturing overhead currently being charged to the wheels will have to be absorbed by other products. Prepare an incremental analysis for the decision to make or buy the wheels. Should St. Augustine Bicycles buy the wheels from the outside supplier? Clearly identify and label each step. Justify your answer.
Willis Company is trying to decide which of two bicycle wheels to manufacture next quarter. Cost data pertaining to the two choices follow. Multiple Choice Cost of materials per unit Cost of direct labor per unit Advertising cost per year 4,000 Depreciation on equipment 6,000 Which costs are relevant to the decision of which wheel to produce? Cost of materials and direct labor Wheel A $25 30 Cost of direct labor, advertising, and depreciation Cost of materials, direct labor and advertising Cost of advertising and depreciation Wheel XZ $45 35 7,000 9,000
Each year, Giada Company produces 20,000 units of a component part used in tablet computers. An outside supplier has offered to supply the part for $1.39. The unit cost is: Direct materials $0.83 Direct labor 0.34 Variable overhead 0.13 Fixed overhead 2.55 Total unit cost $3.85 1. What are the alternatives for Giada Company? a. Make the part in house b.Buy the part externally c.Make the part in house or buy the part externally d.None 2. Assume that none of the fixed cost is avoidable. List the relevant cost(s) of internal production. a.Direct materials, direct labor and variable and fixed overhead b.Direct materials, direct labor and variable overhead c.Direct materials, direct labor and fixed overhead d.None List the relevant cost(s) of external purchase. a.Purchase price b.Sales price c.Material price d.None 3. Which alternative is more cost effective and by how much? a. Making the part in house b. Buying the part from the external supplier by $___________ 4. What if…
Dexcon Technologies, Inc., is evaluating two alternatives to produce its new plastic filament with tribological (i.e., low friction) properties for creating custom bearings for 3-D printers. The estimates associated with each alternative are shown below. Using a MARR of 15% year, which alternative has the lower present worth? per Method DDM LS First Cost $-200,000 $-40,000 $-500,000 M&O Cost, per Year $-40,000 Salvage Value Life $2,000 $21,000 2 years 4 years The present worth for the DDM method is $ The present worth for the LS method is $ The (Click to select) v method is selected.
A-2
Woodruff Company is currently producing a snowmobile that uses five specialized parts. Engineering has proposed replacing these specialized parts with commodity parts, which will cost less and can be purchased in larger order quantities. Current activity capacity and demand (with specialized parts required) and expected activity demand (with only commodity parts required) are provided. Activities Activity Driver ActivityCapacity Current ActivityDemand Expected ActivityDemand Material usage Number of parts 200,000 200,000 200,000 Installing parts Direct labor hours 20,000 20,000 16,000 Purchasing parts Number of orders 7,600 6,498 3,990 Additionally, the following activity cost data are provided: Material usage: $11 per specialized part used; $27 per commodity part; no fixed activity cost. Installing parts: $21 per direct labor hour; no fixed activity cost. Purchasing parts: Four salaried clerks, each earning a $47,000 annual salary; each clerk is capable of processing 1,900…

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