Loose Leaf For Managerial Accounting for Managers
6th Edition
ISBN: 9781264445394
Author: Noreen, Eric, BREWER, Peter, Garrison, Ray
Publisher: McGraw Hill
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Daily Kneads, Inc., is considering outsourcing one of its many products rather than making it internally. The supplier will charge $20,000
for 20,000 pounds of the product. The costs per pound to make this product include:
Cost per Pound
$0.30
Direct Labor
Direct Materials
$0.60
$0.70
Allocated Unavoidable Overhead
If Daily Kneads outsources, what is the savings (or loss) per pound for the company as a whole? If the amount is a loss include a
negative sign (not parentheses) in your answer.
"_"
"Blast it!" sald David Wilson, president of Teledex Company. "We've just lost the bid on the Koopers Job by $2,000. It seems we're
elther too high to get the Job or too low to make any money on half the Jobs we bid."
Teledex Company manufactures products to customers' specifications and uses a job-order costing system. The company uses a
plantwide predetermined overhead rate based on direct labor cost to apply Its manufacturing overhead (assumed to be all fixed) to
Jobs. The following estimates were made at the beginning of the year.
Department
Fabricating Machining
$ 358,750 $ 410, e00
$ 102,500
Assembly
92, 250
$ 307,500 S
Total Plant
Manufacturing overhead
Direct labor
861,e0e
615, eee
24
205,000
Jobs require varying amounts of work In the three departments. The Koopers Job, for example, would have requlred manufacturing
costs In the three departments as follows:
Fabricating
$ 3,500
$ 3,800
Department
Machining
$ 200
$ 500
Assembly
$1,900
$ 6,700
Total Plant
$ 5,600
$11,000
Direct…
"Blast It!" sald David Wilson, president of Teledex Company. "We've Just lost the bid on the Koopers job by $2,000. It seems we're
either too high to get the job or too low to make any money on half the jobs we bid."
Teledex Company manufactures products to customers' specifications and uses a job-order costing system. The company uses a
plantwide predetermined overhead rate based on direct labor cost to apply Its manufacturing overhead (assumed to be all fixed) to
Jobs. The following estimates were made at the beginning of the year.
Department
Fabricating Machining
$ 358,750 $ 410,e00
$ 205,000
Assembly
Total Plant
Manufacturing overhead
92,250
$ 307,500
861, eee
615, e00
Direct labor
$ 102,500
Jobs require varying amounts of work in the three departments. The Koopers job, for example, would have required manufacturing
costs in the three departments as follows:
Fabricating
$ 3,500
$ 3,800
Department
Machining
$ 200
$ 5ee
Assembly
$ 1,900
$ 6,700
Total Plant
$ 5,600
$11,000
Direct…
Chapter 3 Solutions
Loose Leaf For Managerial Accounting for Managers
Ch. 3 - Prob. 3.1QCh. 3 - Prob. 3.2QCh. 3 - Prob. 3.3QCh. 3 - Prob. 3.4QCh. 3 - Prob. 3.5QCh. 3 - Prob. 3.6QCh. 3 - Prob. 3.7QCh. 3 - Prob. 3.8QCh. 3 - Prob. 3.9QCh. 3 - Prob. 3.10Q
Ch. 3 - Prob. 3.11QCh. 3 - Prob. 3.12QCh. 3 - Prob. 3.13QCh. 3 - Prob. 1AECh. 3 - Prob. 1TF15Ch. 3 - Prob. 3.1ECh. 3 - Prob. 3.2ECh. 3 - Prob. 3.3ECh. 3 - Prob. 3.4ECh. 3 - Prob. 3.5ECh. 3 - Prob. 3.6ECh. 3 - Prob. 3.7ECh. 3 - Prob. 3.8ECh. 3 - Prob. 3.9ECh. 3 - Prob. 3.10ECh. 3 - Prob. 3.11ECh. 3 - Prob. 3.12ECh. 3 - Prob. 3.13ECh. 3 - Prob. 3.14ECh. 3 - Prob. 3.15ECh. 3 - Prob. 3.16PCh. 3 - Prob. 3.17PCh. 3 - Prob. 3.18PCh. 3 - Prob. 3.19PCh. 3 - Prob. 3.20PCh. 3 - Prob. 3.21PCh. 3 - Prob. 3.22PCh. 3 - Prob. 3.23PCh. 3 - Plantwide versus Multiple Predetermined Overhead...Ch. 3 - Prob. 3.25PCh. 3 - Prob. 3.26C
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- Blast it!” said David Wilson, president of Teledex Company. “We’ve just lost the bid on the Koopers job by $3,000. It seems we’re either too high to get the job or too low to make any money on half the jobs we bid.” Teledex Company manufactures products to customers’ specifications and uses a job-order costing system. The company uses a plantwide predetermined overhead rate based on direct labor cost to apply its manufacturing overhead (assumed to be all fixed) to jobs. The following estimates were made at the beginning of the year: Department Fabricating Machining Assembly Total Plant Manufacturing overhead $ 365,750 $ 418,000 $ 94,050 $ 877,800 Direct labor $ 209,000 $ 104,500 $ 313,500 $ 627,000 Jobs require varying amounts of work in the three departments. The Koopers job, for example, would have required manufacturing costs in the three departments as follows: Department Fabricating Machining Assembly Total Plant Direct materials $ 3,900…arrow_forwardHelparrow_forwardAs always, things change. Your supplier has a unionized work factory and lost a labor negotiation. They called to explain the situation and said that their cost of labor is going to increase 30%. Then they told you that they understood that you couldn't pay an increase that matched the labor cost so they asked instead for a 25% increase in the original price. Original Costs ($) Direct Material Costs + Direct Labor Costs + Overhead Costs of Goods Sold + SG&A Total Product Cost + Profit Product Price + Tooling Cost (Amortized) Total Price $30.00 $20.00 $22.00 $72.00 $18.00 $90.00 $13.50 $103.50 $8.00 $111.50 What is the NEW price is the supplier asking for? What is the MAXIMUM price you are willing to pay? What other ideas do you have regarding the cost structure? What should you tell your supplier? Costs with 30% increase to Labor ($) Direct Material Costs + Direct Labor Costs + Overhead Costs of Goods Sold + SG&A Total Product Cost + Profit Product Price + Tooling Cost (Amortized)…arrow_forward
- The first part of this was answered. I just need 2B, 4A, and 4B answeredarrow_forward"This is really an odd situation," said Jim Carter, general manager of Highland Publishing Company. "We get most of the jobs we bid on that require a lot of press time in the Printing Department, yet profits on those jobs are never as high as they ought to be. On the other hand, we lose most of the jobs we bid on that require a lot of time in the Binding Department. I would be inclined to think that the problem is with our overhead rates, but we're already computing separate overhead rates for each department. So what else could be wrong?" Highland Publishing Company is a large organization offering a variety of printing and binding work. The Printing and Binding departments are supported by three service departments. The costs of these service departments are allocated to other departments in the order listed below. The Personnel cost is allocated based on number of employees. The Custodial Services cost is allocated based on square feet of space occupied and the Maintenance cost is…arrow_forward"This is really an odd situation," said Jim Carter, general manager of Highland Publishing Company. "We get most of the jobs we bid on that require a lot of press time in the Printing Department, yet profits on those jobs are never as high as they ought to be. On the other hand, we lose most of the jobs we bid on that require a lot of time in the Binding Department. I would be inclined to think that the problem is with our overhead rates, but we're already computing separate overhead rates for each department. So what else could be wrong?" Highland Publishing Company is a large organization offering a variety of printing and binding work. The Printing and Binding departments are supported by three service departments. The costs of these service departments are allocated to other departments in the order listed below. The Personnel cost is allocated based on number of employees. The Custodial Services cost is allocated based on square feet of space occupied and the Maintenance cost is…arrow_forward
- “This is really an odd situation,” said Jim Carter, general manager of Highland Publishing Company. “We get most of the jobs we bid on that require a lot of press time in the Printing Department, yet profits on those jobs are never as high as they ought to be. On the other hand, we lose most of the jobs we bid on that require a lot of time in the Binding Department. I would be inclined to think that the problem is with our overhead rates, but we’re already computing separate overhead rates for each department. So what else could be wrong?” Highland Publishing Company is a large organization offering a variety of printing and binding work. The Printing and Binding departments are supported by three service departments. The costs of these service departments are allocated to other departments in the order listed below. The Personnel cost is allocated based on number of employees. The Custodial Services cost is allocated based on square feet of space occupied and the Maintenance cost is…arrow_forward"This is really an odd situation," said Jim Carter, general manager of Highland Publishing Company. "We get most of the jobs we bid on that require a lot of press time in the Printing Department, yet profits on those jobs are never as high as they ought to be. On the other hand, we lose most of the jobs we bid on that require a lot of time in the Binding Department. I would be inclined to think that the problem is with our overhead rates, but we're already computing separate overhead rates for each department. So what else could be wrong?" Highland Publishing Company is a large organization offering a variety of printing and binding work. The Printing and Binding departments are supported by three service departments. The costs of these service departments are allocated to other departments in the order listed below. The Personnel cost is allocated based on number of employees. The Custodial Services cost is allocated based on square feet of space occupied and the Maintenance cost is…arrow_forward"Blast it!" said David Wilson, president of Teledex Company. "We've just lost the bid on the Koopers job by $2,000. It seems we're either too high to get the job or too low to make any money on half the jobs we bid. Teledex Company manufactures products to customers' specifications and uses a job-order costing system. The company uses a plantwide predetermined overhead rate based on direct labor cost to apply its manufacturing overhead (assumed to be all fixed) to jobs. The following estimates were made at the beginning of the year: Department Total Plant Fabricating Machining Assembly Manufacturing overhead $369,250 $ 422,000 $ 94,950 $ 886, 200 Direct labor $211,000 $ 105, 500 $ 316,500 $ 633,000 Jobs require varying amounts of work in the three departments. The Koopers job, for example, would have required manufacturing costs in the three departments as follows: Department Total Plant Fabricating Machining Assembly Direct materials $4,100 $ 400 $2,500 $ 7,000 Direct labor $5,000…arrow_forward
- “Blast it!” said David Wilson, president of Teledex Company. “We’ve just lost the bid on the Koopers job by $3,000. It seems we’re either too high to get the job or too low to make any money on half the jobs we bid.” Teledex Company manufactures products to customers’ specifications and uses a job-order costing system. The company uses a plantwide predetermined overhead rate based on direct labor cost to apply its manufacturing overhead (assumed to be all fixed) to jobs. The following estimates were made at the beginning of the year: Department Fabricating Machining Assembly Total Plant Manufacturing overhead $ 360,500 $ 412,000 $ 92,700 $ 865,200 Direct labor $ 206,000 $ 103,000 $ 309,000 $ 618,000 Jobs require varying amounts of work in the three departments. The Koopers job, for example, would have required manufacturing costs in the three departments as follows: Department Fabricating Machining Assembly Total Plant Direct materials $ 3,600…arrow_forward"Blast it!" said David Wilson, president of Teledex Company. "We've just lost the bid on the Koopers job by $3,000. It seems we're either too high to get the job or too low to make any money on half the jobs we bid." Teledex Company manufactures products to customers' specifications and uses a job-order costing system. The company uses a plantwide predetermined overhead rate based on direct labor cost to apply its manufacturing overhead (assumed to be all fixed) to jobs. The following estimates were made at the beginning of the year: Manufacturing overhead Direct labor Fabricating Department Machining Assembly Total Plant $ 365,750 $ 418,000 $ 94,050 $ 877,800 $ 209,000 $ 104,500 $ 313,500 $ 627,000 Jobs require varying amounts of work in the three departments. The Koopers job, for example, would have required manufacturing costs in the three departments as follows: Direct materials Direct labor Manufacturing overhead Fabricating $ 3,900 $ 4,600 ? Department Machining $ 200 $ 500 ?…arrow_forward“Blast it!” said David Wilson, president of Teledex Company. “We’ve just lost the bid on the Koopers job by $3,000. It seems we’re either too high to get the job or too low to make any money on half the jobs we bid.” Teledex Company manufactures products to customers’ specifications and uses a job-order costing system. The company uses a plantwide predetermined overhead rate based on direct labor cost to apply its manufacturing overhead (assumed to be all fixed) to jobs. The following estimates were made at the beginning of the year: Department Total Plant Fabricating Machining Assembly Manufacturing overhead $ 355,250 $ 406,000 $ 91,350 $ 852,600 Direct labor $ 203,000 $ 101,500 $ 304,500 $ 609,000 Jobs require varying amounts of work in the three departments. The Koopers job, for example, would have required manufacturing costs in the three departments as follows: Department Total Plant Fabricating Machining Assembly Direct materials $ 3,300 $ 200 $…arrow_forward
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