Going into 2004, Bob Moyer planned to produce 10,000 bicycles at Mile High Cycles. Construction of his bicycles includes the utilization of three departments, frames, wheel assembly, and final assembly. During this year, Mile High Cycles ended up actually producing 10,800 bicycles to meet higher than expected demand. Bob is curious as to whether or not he was successful in maintaining costs to meet these higher levels of demand.
The equipment is expected to cost $240,000 with a 12-year life and no salvage value. It will be depreciated on a straight-line basis. The company expects to sell 96,000 units of the equipment’s product each year. The expected annual income related to this equipment follows.
The Shamrock Manufacturing Chicago plant manager, Sean Fitzpatrick is contemplating replacing a large piece of manufacturing equipment. Mr. Fitzpatrick is also inline for a promotion to Shamrocks larger Houston plant within the next year, and is hesitant to make any decisions that will reduce short-run operating income and his performance evaluation. While the prospective replacement equipment promises to reduce cash operating costs, it costs $90,000, as well as the loss on disposal cost of the old equipment, which has not fully depreciated. Prior to making a decision, Mr. Fitzgerald must identify all relevant costs and chose a decision for the best interest of Shamrock (Datar,
Hobby Lobby Stores is a chain arts and crafts store around the nation. The owners, which is the Green Family, based a lot the their business and primary rules of their Christian faith. They have filed a court case to not provide birth contraception for their employee’s benefits for health. They feel birth contraception is unmoral and goes against their religion, which is what bases their crafts store. The Greens sued Kathleen Sebelius, who is the Secretary of the Department of Health and Human Services, on September 12, 2012 for the requirements of providing birth contraception. The court allowed their request of not providing this benefit to Hobby Lobby’s employees.
From the overhead analysis completed, it analysis six overhead items with associated costs. This analysis also compares numbers from traditional based costing vs activity based costing. With traditional based costing the analysis shows a total product cost number of 641,320 for Titanium bikes, where as ABC method shows a total product cost as 590,715. There is a difference for Carbon bikes as well. The traditional method shows a 679,380 where the ABC method shows a total product cost of 729,985. These numbers show that Competition Bikes could be overpricing the titanium bikes and could afford to lower the cost in order to be more competitive in the marketplace and maybe even bring in more revenue than previous years. As for the Carbon bikes the analysis states that using the traditional method that total product cost was at 679,380. Once the same analysis for total product cost using ABC method for Carbon bikes shows that number to be 729,985. This knowledge gained from getting a better understanding of each bikes specific costs can really help price the product better so that Competition Bikes remains more competitive in the industry.
Columbia High School was using the Humanities to 1500 textbook for humanities course in 1975. In 1985, school designed the course textbook as Volume 1 of the Humanities for eleventh and twelfth grade students for optional and required readings. A portion of Lysistrata was read aloud in the class during the fall semester year. After that one of the parents objected to an English translation of the Greek dramatist Aristophanes Lysistrata and to English poet Geoffrey Miller’s. The Miller’s Tale from this textbook and the parent believed that the two works of art were too vulgar. After the parent complaint, the school board review the book and they decided to retain
The Ilarion Manufacturing Company operates a job-order costing system and applies overhead cost to jobs on the basis of direct labor cost. Its predetermined overhead rate was based on a cost formula that estimated $117,000 of manufacturing overhead for an estimated allocation base of $90,000 direct labor dollars. The company has provided the following data in the form of an Excel worksheet:
Inventory, 1/1/X6 |24,000 units | |Units manufactured |80,000 | |Units sold |82,000 | |Inventory, 12/31/X6 |22,000 units | |Manufacturing costs: | |Direct materials |$3 per unit | |Direct labor |$5 per unit | |Variable factory overhead |$9 per unit | |Fixed factory overhead |$280,000 | |Selling & administrative expenses: | |Variable |$2 per unit | |Fixed |$136,000 | |
Benoit Company produces three products, A, B, and C. Data concerning the three products follow (per unit).
In assessing the variance report, both favorable and unfavorable areas were found in the materials and labor results. First, the direct materials variances report indicated a favorable outcome for the cost/price variance with no variance reported between actual and budgeted costs. The lack of variation is an indication that the expected materials expenses were unchanged from planned to actual results. However, the report exposed a $7,750 unfavorable variance in materials efficiency. The unfavorable difference in materials efficiency is an indication that more materials were used in the production than were anticipated which could be a sign of incorrect calculation of standards, inferior materials, spoilage, equipment, or staff issues (Benge, n.d.). Overall, the unfavorable materials efficiency variance resulted in a total difference of $7,750 for direct materials. Next, the direct labor variance report revealed that there was a $33,000 favorable result for the cost of labor. While more hours were required, the price of labor was less than budgeted. However, the labor efficiency variance indicated that there was an unfavorable variance of $48,000. This difference which is an indication that production takes longer than anticipated is proven by actual hours of 33000 instead of 30000. Overall, the unfavorable labor efficiency variance resulted
The true variable costs to Beauregard Textiles include the Direct Labor, Material, Material Spoilage, and Direct Department Expense. By excluding those expenses not related to the production of T-30, we can calculate the contribution margin for Beauregard using unit sales price and unit variable cost. Contribution margin is a measurement of the profitability of a product and is an excellent management tool to help determine whether to keep or drop certain aspects of the business. A positive contribution margin means that the company should produce the product, a negative contribution margin means the company is likely to suffer from every unit it produces.
The material handling expenses have been divided into two. The first group has been apportioned 60% of the total expenses which amounted to $120,000 of the total $200,000 while the second
Since material cost is one of the key cost drivers for the production of the units, it is best to take
The material handling expenses have been divided into two. The first group has been apportioned 60% of the total expenses which amounted to $120,000 of the total $200,000 while the second group has been apportioned 40% of the total expenses which amounted to $80,000