近Requlred InformatlonThe following information applies to the questions displayed below]Cane Company manufactures two products called Alpha and Beta that sell for $225 and $175, respectively. Each productuses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 130,000units of each product. Its average cost per unit for each product at this level of activity are given below.Alpha244242Beta$ 2432Direct materialsDirect labor.Variable manufacturing overheadTraceable fixed manufacturing overheadVariable selling expensesCommon fixed expenses26.34273429.$173Total cost per unitThe company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expensesare unavoidable and have been allocated to products based on sales dollars.14. Assume that Cane's customers would buy a maximum of 99,000 units of Alpha and 79,000 units of Beta. Also assume that the rawmaterial available for production is limited to 344,000 pounds. What total contribution margin will it earn?Prev1415.of 15Nexte to search

Solution: Alpha Beta Sales Price 225 175 Variable costs: Direct materials 42 24…

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Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 4EA: Zena Technology sells arc computer printers for $55 per unit. Unit product costs are: A special...

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Abilene Industries manufactures and sells three products (XX, W, and ZZ). The sales price and unit variable cost for the three products are as follows: Their sales mix is reflected as a ratio of 4:2:1. Annual fixed costs shared by the three products are $345.000 per year. What are total variable costs for Abilene with their current product mix? Calculate the number of units of each product that will need to be sold in order for Abilene to break even. What is their break-even point in sales dollars? Using an income statement format, prove that this is the break-even point.
A company produces two products. E and F in batches of 100 units. The production and cost data are: The company can only perform 12,000 set-ups each period yet there is unlimited demand for each product. What is the differential profit from producing product E instead of product F for the year? A. $216,000 B. $204,000 C. $12,000 D. $54,000
Eagle Brand Inc. produces two products as follows: Eagle Brand has 1,000 lbs. of raw materials that can be used to produce Products X and Y. Which of the following alternatives should Eagle Brand accept to maximize the contribution margin? a. 100 units of Product Y. b. 250 units of Product X. c. 200 units of Product X and 20 units of Product Y. d. 200 units of Product X and 50 units of Product Y.
Gelbart Company manufactures gas grills. Fixed costs amount to 16,335,000 per year. Variable costs per gas grill are 225, and the average price per gas grill is 600. Required: 1. How many gas grills must Gelbart Company sell to break even? 2. If Gelbart Company sells 46,775 gas grills in a year, what is the operating income? 3. If Gelbart Companys variable costs increase to 240 per grill while the price and fixed costs remain unchanged, what is the new break-even point?
Zena Technology sells arc computer printers for $55 per unit. Unit product costs are: A special order to purchase 15,000 arc printers has recently been received from another company and Zena has idle capacity to fill the order. Zena will incur an additional $2 per printer for additional labor costs due to a slight modification the buyer wants made to the original product. One-third of the manufacturing overhead costs is fixed and will be incurred no matter how many units are produced. When negotiating the price, what is the minimum selling price that Zena should accept for this special order?
1. Party Co. produces 1,000 parts per year, which are used in the assembly of one of its products. The unit product cost of these parts are: Variable manufacturing cost, P12.00; fixed manufacturing cost, P9.00. The part can be purchased from an outside supplier at P20.00. If the part is purchased from the outside supplier, two thirds of the fixed manufacturing costs can be eliminated. What would be the annual impact on the company’s net operating income as a result of buying the part from the outside supplier? 2.Division A produces a part that it sells to outside customers. Data concerning this part follows: Selling price to outside customers, P60; Variable cost per unit, P40; Total fixed costs, P100,000; Capacity in units, 20,000 units. Division B of the same company purchases 5,000 units of similar part from an outside supplier at a price of P58 per unit. If Division B wants to purchase 5,000 units from Division A instead, and Division A has no idle capacity, what should be the…
(2) Sage Company is operating at 90% of capacity and is currently purchasing a part used in its manufacturing operations for $18 per unit. The unit cost for the business to make the part is $21 including fixed costs and $10 excluding fixed costs. If 32,799 units of the part are normally purchased during the year but could be manufactured using unused capacity, what would be the amount of differential cost increase or decrease from making the part rather than purchasing it? a.$262,392 cost decrease b.$590,382 cost decrease c.$98,397 cost increase d.$262,392 cost increase
Fundador Inc. manufactures X product from a process that yields a by-product called Z. The by-product requires additional processing cost of P30,000. The by-product will require selling and administrative expenses totaling P20,000. It is Fundador’s accounting policy to charge the joint costs to the main product only. Information concerning a batch produced during the year ended December 31, 2020 follows: Product Units Produced Market Value at Split off Units Sold X 100,000 P50 60,000 Z 8,000 10 8,000 The Joint costs incurred up to split-off point are: Direct materials P2,000,000 Direct labor 800,000 Factory Overhead 200,000 The Selling and Administrative expense of Fundador Inc. for the year ended December…
Agta Enterprises manufactures a product that sells for R180 each. The company presently produces and sells 50 000 units per year. Unit variable manufacturing and selling expenses are R90 and R18 respectively. Annual fixed costs are R2 200 000 for manufacturing overheads and R1 040 000 for selling and administrative activities. Determine the sales quantity required in order to achieve the company’s profit objective of R1 800 000.
The Products 4U Inc. manufactures and sells one product which has the following available information: Description Cost Selling price per unit $27.00 Variable costs per unit: Direct material $9.00 Direct labour $2.30 Manufacturing overhead $1.40 Sales commission $3.80 Total annual fixed costs $100,000 How many units does the company have to sell every year to break even? Rounding Rules: For units, round up to the next whole unit. Examples: If your answer is 11,248.4689 units, enter 11249 If your answer is 11,248.5175 units, enter 11249 If your answer is 11,248.0010 units, enter 11249
Agta Enterprises manufactures a product that sells for R180 each. The company presently produces and sells 50 000 units per year. Unit variable manufacturing and selling expenses are R90 and R18 respectively. Annual fixed costs are R2 200 000 for manufacturing overheads and R1 040 000 for selling and administrative activities Suppose the marketing manager proposes that the selling price be increased to R198 per unit. Calculate the amount by which fixed costs must decrease in order to achieve the company’s profit objective of R1 800 000, if 50 000 units are sold.
Malakas Company produces 15,000 pounds of Product A and 30,000 pounds of Product B each week by incurring a common variable cost (joint costs) of P700,000. These two products can be sold as is or processed further. Further processing of either products does not delay the production of subsequent batches of the joint product. Data regarding these two products are as follows: Product A Product B Selling price per pound without further processing P24.00 P18.00 Selling price per pound with further processing 30.00 22.00 Total separate weekly variable costs of further processing 100,000 90,000 To maximize Life Company’s manufacturing contribution margin, identify which product or products should be processed further. How much should be the total separate variable costs of further processing that should be incurred each week after you decision? 1. 90,000 2. 100,000 3. 190,000 4. -0- Group of answer choices 1 2 3…

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