5th Edition

ISBN: 9780134128528

Author: Karen W. Braun, Wendy M. Tietz

Publisher: PEARSON

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Textbook Question

Chapter 3, Problem 3.36BE

Sustainability and job costing (Learning Objectives 2, 3, & 4)

SUSTAINABILITY

Lancaster Plastics manufactures custom park furniture and signage from recycled plastics (primarily shredded milk jugs). Many of the company’s customers are municipalities that are required by law to purchase goods that meet certain recycled-content guidelines. (Recycled content can include post-consumer waste materials, pre-consumer waste materials, and recovered materials). As a result, Lancaster Plastics includes two types of direct material charges in its job cost for each job: (1) virgin materials (non-recycled), and (2) recycled-content materials. Lancaster Plastics also keeps track of the pounds of each type of direct material so that the final recycled-content percentage for the job can be reported to the customer. The company also reports on the percentage of recycled-content as a total of plastics used each month on its own internal reporting system to help encourage managers to use recycled content whenever possible.

Lancaster Plastics uses a predetermined manufacturing overhead rate of $8 per direct labor hour. Here is a summary of the materials and labor used on a recent job for Lyon County:

Description	Quantity	Cost
Virgin materials	80 Pounds	$ 3.80 per pound
Recycled content material	120 Pounds	$ 2.60 per pound
Direct labor	12 hours	$ 16.00 per hour

Requirements

1. Calculate the total cost of the Lyon County job.
2. Calculate the percentage of recycled-content used in the Lyon County job (using pounds.) If items purchased by Lyon County are required by county charter to contain at least 40% recycled-content, does the job meet that requirement?

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Chapter 3, Problem 3.35BE

Chapter 3, Problem 3.37BE

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Chapter 3 Solutions

Managerial Accounting (5th Edition)

Ch. 3 - (Learning Objective 1) For which of the following...Ch. 3 - (Learning Objective 2) Which of the following...Ch. 3 - (Learning Objective 2) Which of the following...Ch. 3 - (Learning Objective 3) The amount of manufacturing...Ch. 3 - (Learning Objective 4) Which of the following is...Ch. 3 - (Learning Objective 5) Which of the following is...Ch. 3 - (Learning Objective 5) Assuming the amount of...Ch. 3 - Prob. 8QC Ch. 3 - Prob. 9QC Ch. 3 - Prob. 10QC

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Solution Summary: The author calculates the total cost of the LC job by summing direct material, direct labor, and manufacturing overhead costs.

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