%23 Requlred Information The 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 product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 130,000 units of each product. Its average cost per unit for each product at this level of activity are given below. Alpha $ 42 42 Beta $ 24 Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses 32. 24 27. 34. Total cost per unit The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses. are unavoidable and have been allocated to products based on sales dollars. 9. Assume that Cane expects to produce and sell 99,000 Alphas during the current year. A supplier has offered to manufacture and deliver 99,000 Alphas to Cane for a price of $156 per unit. What is the financial advantage (disadvantage) of buying 99,000 units from the supplier instead of making those units? 灣彩券 < Prev 10 11 15 of 15 Next > ere to search F4 F5 F7 F8 70

%23 Requlred Information The 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 product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 130,000 units of each product. Its average cost per unit for each product at this level of activity are given below. Alpha $ 42 42 Beta $ 24 Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses 32. 24 27. 34. Total cost per unit The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses. are unavoidable and have been allocated to products based on sales dollars. 9. Assume that Cane expects to produce and sell 99,000 Alphas during the current year. A supplier has offered to manufacture and deliver 99,000 Alphas to Cane for a price of $156 per unit. What is the financial advantage (disadvantage) of buying 99,000 units from the supplier instead of making those units? 灣彩券 < Prev 10 11 15 of 15 Next > ere to search F4 F5 F7 F8 70

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter11: Performance Evaluation And Decentralization

Section: Chapter Questions

Problem 47P: (Appendix 11A) Cycle Time, Velocity, Conversion Cost The theoretical cycle time for a product is 30...

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Refer to Exercise 20.10. Assume the economic lot size for small casings is 120,000 and that of the large casings is 40,000. Morrison Manufacturing sells an average of 9,600 small casings per workday and an average of 3,200 large casings per workday. It takes Morrison two days to set up the equipment for small or large casings. Once set up, it takes three workdays to produce a batch of small casings and five days for large casings. There are 250 workdays available per year. Required: 1. What is the reorder point for small casings? Large casings? 2. Using the economic order batch size, is it possible for Morrison to produce the amount that can be sold of each casing? Does scheduling have a role here? Explain. Is this a push- or pull-through system approach to inventory management? Explain.
(Appendix 11A) Cycle Time, Velocity, Conversion Cost The theoretical cycle time for a product is 30 minutes per unit. The budgeted conversion costs for the manufacturing cell are 2,700,000 per year. The total labor minutes available are 600,000. During the year, the cell was able to produce 1.5 units of the product per hour. Suppose also that production incentives exist to minimize unit product costs. Required: 1. Compute the theoretical conversion cost per unit. 2. Compute the applied conversion cost per unit (the amount of conversion cost actually assigned to the product). 3. CONCEPTUAL CONNECTION Discuss how this approach to assigning conversion costs can improve delivery time performance.
Q – 10: Sohar Company manufactures 10,000 units of a spare part ALFA each year for use on its production line. At this level of activity, the cost per unit for part ALFA is as follows: Direct materials $ 2.40 Direct labor 3.50 Variable manufacturing overhead 1.60 Fixed manufacturing overhead 5.00 Total cost per part $12.50 An outside supplier has offered to sell 15,000 units of spare part ALFA each year to Sohar Company for $11.75 per part. If Sohar Company accepts this offer, the facilities now being used to manufacture ALFA could be rented to another company at an annual rental of $75,000. However, Sohar Company has determined that $3 of the fixed manufacturing overhead being applied to part ALFA would continue even if part ALFA were purchased from the outside supplier. Required: a) Prepare computations showing how much profits will increase or decrease if the outside supplier’s offer is accepted. b) Also mention which cost is opportunity cost…
23. FGM Limited produces nail brushes for domestic use. It sells 80,000 in a year. Raw materials cost P0.15 per brush and other variable cost per year P48,000. Fixed costs amount to P60,000. What is the total cost per unit. P0.75 P1.35 P1.50 P1.00
34. PASASACOST Corp. sells two products, product 1 and product 2. Three units of product 1 are sold for every two products of product 2. Fixed costs is Php 234,000 per year. Product 1 is sold for Php 20 per unit and the variable costs identified with production and sale of each unit of the product amount to Php 14.00. Product 2 is sold for Php 24.00 per unit, and the variable costs identified with the production and sale of the product amounts to Php 20.00. The weighted-average unit contribution margin is