![Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_largeCoverImage.gif)
Concept explainers
Unused capacity, activity-based costing, activity-based management. Archer Pro manufactures two models of sport bows, Basic and Deluxe, using a combination of machining and hand finishing. Machine setup costs are driven by the number of setups. Indirect
Archer Pro Budgeted Costs and Activities for the Year Ended December 31, 2017 | |
Direct materials—Basic bows | $ 450,000 |
Direct materials—Deluxe bows | 320,000 |
Direct manufacturing labor—Basic bows | 155,000 |
Direct manufacturing labor—Deluxe bows | 195,000 |
Indirect manufacturing labor costs | 105,000 |
Machine setup costs | 60,000 |
Equipment and maintenance costs | 264,000 |
Facility rent | 250,000 |
Total | $1799,000 |
Other budget information follows:
Basic | Deluxe | |
Number of bows | 10,000 | 5,000 |
Machine-hours | 15,000 | 18,000 |
Number of setups | 500 | 300 |
Square footage of production space used | 4,000 | 3,500 |
- 1. Calculate the cost per unit of each cost-allocation base.
Required
- 2. What is the budgeted cost of unused capacity?
- 3. Calculate the budgeted total cost and the cost per unit for each model.
- 4. Why might excess capacity be beneficial for Archer Pro? What are some of the issues Archer Pro should consider before increasing production to use the space?
![Check Mark](/static/check-mark.png)
Want to see the full answer?
Check out a sample textbook solution![Blurred answer](/static/blurred-answer.jpg)
Chapter 5 Solutions
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
- Murphy corporation has the following data pertaining solve this accounting questionsarrow_forwardStockinger Corporation has provided the following information concerning a capital budgeting project: Investment required in equipment Expected life of the project Salvage value of equipment Annual sales Annual cash operating expenses $ 284,000 4 $ 0 $ 590,000 Working capital requirement One-time renovation expense in year 3 $ 426,000 $ 30,000 $ 82,000 The company's income tax rate is 30% and its after-tax discount rate is 11%. The working capital would be required immediately and would be released for use elsewhere at the end of the project. The company uses straight-line depreciation on all equipment. Assume cash flows occur at the end of the year except for the initial investments. The company takes income taxes into account in its capital budgeting. The total cash flow net of income taxes in year 3 is:arrow_forwardAn asset was acquired by Hugo and Sons for a first cost of $100,000 via a 10% per year loan that needs to be paid back using equal uniform amounts at the end of each year in 2 years. In the first year, the company claimed $60,000 depreciation. If the gross income is $200,000 and operating expenses are $50,000, what is the taxable income? Subject - general account question.arrow_forward
- Please given correct option general accountingarrow_forwardNafth Company has an Equipment Services Department that performs all needed maintenance work on the equipment in the company's Fabrication and Assembly Departments. Costs of the equipment Services Department are charged to the Fabrication and Assembly Departments on the basis of direct labor-hours. Data on direct labor-hours for last year follow: Budgeted direct labor-hours Actual direct labor-hours Peak-period direct labor-hours Fabrication Assembly Total 21,000 51,000 72,000 26,000 56,000 82,000 31,000 71,000 102,000 For the year just ended, the company budgeted its variable maintenance costs at $220,000 for the year. Actual variable maintenance costs for the year totaled $265,000. For performance evaluation purposes, how much of the $265,000 of actual variable maintenance cost should be charged to the Assembly Department at the end of the year just ended? Note: Do not round your intermediate calculations.arrow_forwardWhat is up and coming's cost of equity on this financial accounting question?arrow_forward
- Please given answer general Accountingarrow_forwardWhat was the number of units started or transferred on this financial accounting question?arrow_forwardAssume that Stanford CPAs encountered the following issues during its various audit engagements for issuers in 2023: Stanford conducted the audit of Luck, a new client, this past year. Last year, Luck was audited by another CPA, who issued an unqualified opinion on its financial statements. Luck is presenting financial statements for 2022 and 2023 in comparative form. One of Stanford’s clients is RealCo, a real estate holding company. Assume that RealCo experienced a significant decline in the value of its investment properties during the past year because of a downturn in the economy and has appropriately recognized that decline in market value under GAAP. Stanford wishes to emphasize the decline in the economy and its impact on RealCo’s financial position and results of operations for 2023 in its audit report. For the past five years, Stanford has conducted the audits of TechTime, a company that provides technology consulting services, and has always issued unqualified opinions on…arrow_forward
- Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage LearningEssentials of Business Analytics (MindTap Course ...StatisticsISBN:9781305627734Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. AndersonPublisher:Cengage Learning
![Text book image](https://www.bartleby.com/isbn_cover_images/9781305970663/9781305970663_smallCoverImage.gif)
![Text book image](https://www.bartleby.com/isbn_cover_images/9781305627734/9781305627734_smallCoverImage.gif)