ACCOUNTING PRINCIPLES 222 5/16 >C<
2nd Edition
ISBN: 9781323461525
Author: Horngren
Publisher: PEARSON C
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Textbook Question
Chapter 19, Problem 6QC
What is Gell's actual
Learning Objective 3
- $158,000
- $83,000
- $145,000
- $220,000
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Problem: Module 6 Textbook Problem 6
Learning Objective: 6-3 Make appropriate outsourcing decisions
Benson Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of
producing 9,400 containers follows.
Unit-level materials
Unit-level labor
Unit-level overhead
Product-level costs*
Allocated facility-level costs
$ 6,600
6,300
4,000
9,900
26,400
*One-third of these costs can be avoided by purchasing the containers.
Russo Container Company has offered to sell comparable containers to Benson for $2.80 each.
Required
a. Calculate the total relevant cost. Should Benson continue to make the containers?
b. Benson could lease the space it currently uses in the manufacturing process. If leasing would produce $12,400 per month, calculate
the total avoidable costs. Should Benson continue to make the containers?
a.
Total relevant cost
Should Benson continue to make the containers?
b. Total avoidable cost
Should Benson continue to…
20A Forecast costs at different volumes (Learning Objectives 1 & 2)
Famsworth Drycleaners has capacity to clean up to 7,500 garments per month.
Requirements
1. Complete the following schedule for the three volumes shown.
4,500 Garments
6,000 Garments
7,500 Garments
Total variable costs
$4,200
Total fixed costs
Total operating costs
Variable cost per garment
Fxed cost per garment
$2.40
Average cost per garment
2. Why does the average cost per garment change?
3. Suppose the owner, Dustin Farnsworth, erroneously uses the average cost per unit at
full capacity to predict total costs at a volume of 4,500 garments. Would he overesti-
mate or underestimate his total costs? By how much?
Task 2: CLO4
OBJECTIVE: To enable learners to identify the relevant costs and benefits from costs and revenue
information available in the financial database to aid decision making on time.
REQUIREMENT: Short term decision making
Question
Selma Corporation uses Part PB7 in one of its products. The company's Accounting Department reports the
following costs to produce 7,000 units of the PB7 that are needed every year.
$ per unit
Direct materials
7.00
Direct labour
6.00
Variable overhead
5.60
Supervisor's salary
Depreciation of special equipment
Allocated general overhead
4.70
1.50
5.40
An outside supplier has offered to make the part and sell it to the company for $28.30 each. If this offer is
accepted, the supervisor's salary and all of the variable costs, including direct labor, can be avoided. The
special equipment used to make the part was purchased many years ago and has no salvage value or other
use. The allocated general overhead represents fixed costs of the entire company. If…
Chapter 19 Solutions
ACCOUNTING PRINCIPLES 222 5/16 >C<
Ch. 19 - Prob. 1QCCh. 19 - When a manufacturing company uses direct...Ch. 19 - When a manufacturing company uses indirect...Ch. 19 - When a manufacturing company uses direct labor, it...Ch. 19 - What is Gell's predetermined overhead allocation...Ch. 19 - What is Gell's actual manufacturing overhead cost?...Ch. 19 - How much manufacturing overhead would Gell...Ch. 19 - What entry would Gell make to adjust the...Ch. 19 - A manufacturing company completed work on a job....Ch. 19 - Prob. 10QC
Ch. 19 - Why do managers need to know the cost of their...Ch. 19 - What types of companies use job order costing...Ch. 19 - What types of companies use process costing...Ch. 19 - What is the purpose of a job cost record?Ch. 19 - Explain the difference between cost of goods...Ch. 19 - A job was started on May 15, completed on June 27,...Ch. 19 - Give the journal entry for raw materials purchased...Ch. 19 - What is the purpose of the raw materials...Ch. 19 - How does the use of direct and indirect materials...Ch. 19 - Give the journal entry for direct and indirect...Ch. 19 - Give five examples of manufacturing overhead...Ch. 19 - What is the predetermined overhead allocation...Ch. 19 - What is an allocation base? Give some examples.Ch. 19 - How is manufacturing overhead allocated to jobs?Ch. 19 - A completed job cost record shows the unit cost of...Ch. 19 - Explain the journal entry for the allocation of...Ch. 19 - Give the journal entry for the completion of a...Ch. 19 - Why does the sale of a completed job require two...Ch. 19 - Prob. 19RQCh. 19 - If a company incurred $5,250 in actual overhead...Ch. 19 - Refer to the previous question. Give the journal...Ch. 19 - Explain the terms accumulate, assign, allocate,...Ch. 19 - Why would the manager of a service company need to...Ch. 19 - How is the predetermined overhead allocation rate...Ch. 19 - Distinguishing between job order costing and...Ch. 19 - Prob. S19.2SECh. 19 - Prob. S19.3SECh. 19 - Prob. S19.4SECh. 19 - Prob. S19.5SECh. 19 - Prob. S19.6SECh. 19 - Prob. S19.7SECh. 19 - Prob. S19.8SECh. 19 - Prob. S19.9SECh. 19 - Prob. S19.10SECh. 19 - Prob. S19.11SECh. 19 - Prob. S19.12SECh. 19 - Prob. S19.13SECh. 19 - Prob. S19.14SECh. 19 - Distinguishing between job order costing and...Ch. 19 - Defining terminology Learning Objectives 1,2 Match...Ch. 19 - Prob. E19.17ECh. 19 - Prob. E19.18ECh. 19 - Prob. E19.19ECh. 19 - Prob. E19.20ECh. 19 - Prob. E19.21ECh. 19 - Prob. E19.22ECh. 19 - Prob. E19.23ECh. 19 - Prob. E19.24ECh. 19 - Prob. E19.25ECh. 19 - Prob. E19.26ECh. 19 - Prob. E19.27ECh. 19 - Prob. P19.28APGACh. 19 - Prob. P19.29APGACh. 19 - Prob. P19.30APGACh. 19 - Prob. P19.31APGACh. 19 - Prob. P19.32APGACh. 19 - Prob. P19.33APGACh. 19 - Prob. P19.34BPGBCh. 19 - Prob. P19.35BPGBCh. 19 - Prob. P19.36BPGBCh. 19 - Prob. P19.37BPGBCh. 19 - Prob. P19.38BPGBCh. 19 - Prob. P19.39BPGBCh. 19 - Accounting for manufacturing overhead This problem...Ch. 19 - Prob. 19.1DCCh. 19 - Prob. 19.1FC
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