At the end of 2018, Diatomic Company implemented a new labor process and redesigned its product with the expectation that input usage efficiency would increase. Now, at the end of 2019, the president of the company wants an assessment of the changes on the company's productivity. The data needed for the assessment are as follows: 2018 2019 Output 45,000 54,000 Output prices $10.00 $10.00 Materials (Ibs.) 22,500 22,950 Materials unit price $3.00 $4.00 Labor (hrs.) 18,000 16,875 Labor rate per hour $5.00 $5.00 Power (kwh) 11,250 14,625 Price per kwh $2.00 $3.00 How much profit was generated in 2019? a. $540,000 Ob. $270,000 Oc. $319,950 Od. $220,050 se . Which of the following is true of non-value-added activities? Oa. These activities are a source of waste in the value stream of a product. Ob. These activities are identified only after the finished goods reaches final customers. Oc. These activities ensure that no rework is required as the final product has zero-defects. d. These activities result from adopting new technology for the production process. С.

At the end of 2018, Diatomic Company implemented a new labor process and redesigned its product with the expectation that input usage efficiency would increase. Now, at the end of 2019, the president of the company wants an assessment of the changes on the company's productivity. The data needed for the assessment are as follows: 2018 2019 Output 45,000 54,000 Output prices $10.00 $10.00 Materials (Ibs.) 22,500 22,950 Materials unit price $3.00 $4.00 Labor (hrs.) 18,000 16,875 Labor rate per hour $5.00 $5.00 Power (kwh) 11,250 14,625 Price per kwh $2.00 $3.00 How much profit was generated in 2019? a. $540,000 Ob. $270,000 Oc. $319,950 Od. $220,050 se . Which of the following is true of non-value-added activities? Oa. These activities are a source of waste in the value stream of a product. Ob. These activities are identified only after the finished goods reaches final customers. Oc. These activities ensure that no rework is required as the final product has zero-defects. d. These activities result from adopting new technology for the production process. С.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 9EA: The cost data for Evencoat Paint for the year 2019 is as follows: Using the high-low method, express...

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The cost data for BC Billing Solutions for the year 2020 is as follows: Using the high-low method, express the companys overtime wages as an equation where x represents number of invoices processed. Assume BC has monthly fixed costs of $3,800. Predict the overtime wages if 9,000 invoices are processed. Predict the overtime wages if 6,500 invoices are processed. Using Excel, create a scatter graph of the cost data and explain the relationship between the number of invoices processed and overtime wage expense.
The cost data for Evencoat Paint for the year 2019 is as follows: Using the high-low method, express the companys maintenance costs as an equation where x represents the gallons of paint produced. Then estimate the fixed and variable costs. Predict the maintenance costs i190,000 gallons of paint are produced. Predict the maintenance costs if 81,000 gallons of paint are produced. Using Excel, create a scatter graph of the cost data and explain the relationship between gallons of paint produced and equipment maintenance expenses.
At the end of 20x5, Bing Pharmaceuticals began to implement an environmental quality management program. As a first step, it identified the following costs in its accounting records as environmentally related for the calendar year just ended: Required: 1. Prepare an environmental cost report by category. Assume that total operating costs are 150,000,000. 2. Use a pie chart to illustrate the relative distribution percentages for each environmental cost category. Comment on what this distribution communicates to a manager.
Nabors Company had actual quality costs for the year ended June 30, 20x5, as given below. At the zero-defect state, Nabors expects to spend 375,000 on quality engineering, 75,000 on vendor certification, and 50,000 on packaging inspection. Assume sales to be 25,000,000. Required: 1. Prepare a long-range performance report for 20x5. What does this report tell the management of Nabors? 2. Explain why quality costs still are present for the zero-defect state. 3. What if Nabors achieves the zero-defect state reflected in the report? What are some of the implications of this achievement?
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Javier Company has sales of 8 million and quality costs of 1,600,000. The company is embarking on a major quality improvement program. During the next three years, Javier intends to attack failure costs by increasing its appraisal and prevention costs. The right prevention activities will be selected, and appraisal costs will be reduced according to the results achieved. For the coming year, management is considering six specific activities: quality training, process control, product inspection, supplier evaluation, prototype testing, and redesign of two major products. To encourage managers to focus on reducing non-value-added quality costs and select the right activities, a bonus pool is established relating to reduction of quality costs. The bonus pool is equal to 10 percent of the total reduction in quality costs. Current quality costs and the costs of these six activities are given in the following table. Each activity is added sequentially so that its effect on the cost categories can be assessed. For example, after quality training is added, the control costs increase to 320,000, and the failure costs drop to 1,040,000. Even though the activities are presented sequentially, they are totally independent of each other. Thus, only beneficial activities need be selected. Required: 1. Identify the control activities that should be implemented, and calculate the total quality costs associated with this selection. Assume that an activity is selected only if it increases the bonus pool. 2. Given the activities selected in Requirement 1, calculate the following: a. The reduction in total quality costs b. The percentage distribution for control and failure costs c. The amount for this years bonus pool 3. Suppose that a quality engineer complained about the gainsharing incentive system. Basically, he argued that the bonus should be based only on reductions of failure and appraisal costs. In this way, investment in prevention activities would be encouraged, and eventually, failure and appraisal costs would be eliminated. After eliminating the non-value-added costs, focus could then be placed on the level of prevention costs. If this approach were adopted, what activities would be selected? Do you agree or disagree with this approach? Explain.
At the end of 2018, Diatomic Company implemented a new labor process and redesigned its product with the expectation that input usage efficiency would increase. Now, at the end of 2019, the president of the company wants an assessment of the changes on the company's productivity. The data needed for the assessment are as follows: 2018 2019 Output 45,000 54,000 Output prices $10.00 $10.00 Materials (lbs.) 22,500 22,950 Materials unit price $3.00 $4.00 Labor (hrs.) 18,000 16,875 Labor rate per hour $5.00 $5.00 Power (kwh) 11,250 14,625 Price per kwh $2.00 $3.00 By how much did profit change as a result of profitability changes in labor? a.$23,625 increase b.$23,625 decrease c.$5,625 increase d.$45,000 increase
At the end of 2021, Mejorar Company implemented a low-cost strategy to improve its competitive position. Its objective was to become the low-cost producer in its industry. A Balanced Scorecard was developed to guide the company toward this objective. To lower costs, Mejorar undertook a number of improvement activities such as JIT production, total quality management, and activity-based management. Now, after two years of operation, the president of Mejorar wants some assessment of the achievements. To help provide this assessment, the following information on one product has been gathered: 1. Compute the following measures for 2021 and 2023: a. actual velocity and cycle time (2021 and 2023) (My question: In the book it stated that Actual Velocity (# units produced/time) and Cycle Time (time/# units produced) However, which one is per hour and per minute Or maybe I wrong let me know?) b. Percentage of total revenue from new customers (2021 and 2023) (assume one unit per customer) c.…
Benoit Manufacturing Company manufactures and sells parts for various musical gadgets. The followinginformation to a single part which is used in the production of a wind instrument. The business earnedOperating Income of $220,000 in 2019, when production was 3,000 units and the president of Darius is underpressure from shareholders to increase operating income in 2020 and is therefore considering theimplementation of strategies mainly geared at increasing revenues and or decreasing variable costs. Data forvariable cost per unit and total fixed costs were as follows: Variable expenses per unit: Direct Material $58Direct Labour $74Variable Manufacturing Overhead $48Fixed expenses: Fixed Manufacturing Overhead $215,000Fixed Selling Costs $65,000Fixed Administrative Costs $160,000 Required:d) Calculate the margin of safety in units and in sales dollars. e) The President of Benoit is under pressure from shareholders to increase operating income by 50% in2020. Management expects per unit…
Benoit Manufacturing Company manufactures and sells parts for various musical gadgets. The followinginformation to a single part which is used in the production of a wind instrument. The business earnedOperating Income of $220,000 in 2019, when production was 3,000 units and the president of Darius is underpressure from shareholders to increase operating income in 2020 and is therefore considering theimplementation of strategies mainly geared at increasing revenues and or decreasing variable costs. Data forvariable cost per unit and total fixed costs were as follows:Variable expenses per unit: Direct Material $58Direct Labour $74Variable Manufacturing Overhead $48Fixed expenses: Fixed Manufacturing Overhead $215,000Fixed Selling Costs $65,000Fixed Administrative Costs $160,000 f) Assume that as a result of reorganizing the production process, the management of BenoitManufacturing was able to reduce direct material cost per unit by $5 due to a change in the supplier ofthe raw material…
Benoit Manufacturing Company manufactures and sells parts for various musical gadgets. The followinginformation to a single part which is used in the production of a wind instrument. The business earnedOperating Income of $220,000 in 2019, when production was 3,000 units and the president of Darius is underpressure from shareholders to increase operating income in 2020 and is therefore considering theimplementation of strategies mainly geared at increasing revenues and or decreasing variable costs. Data forvariable cost per unit and total fixed costs were as follows: Variable expenses per unit: Direct Material $58Direct Labour $74Variable Manufacturing Overhead $48Fixed expenses: Fixed Manufacturing Overhead $215,000Fixed Selling Costs $65,000Fixed Administrative Costs $160,000Required:a) Compute the selling price per unit in 2019, using the equation method. b) Given the sales of 3,000 units and the selling price calculated in (a), prepare a contribution marginincome statement for the…
Wildhorse Company had $273,300 of net income in 2019 when the selling price per unit was $155, the variable costs per unit were $90, and the fixed costs were $571,700. Management expects per unit data and total fixed costs to remain the same in 2020. The president of Wildhorse Company is under pressure from stockholders to increase net income by $39,000 in 2020. (A) Compute the number of units sold in 2019. Type your answer here units (B) Compute the number of units that would have to be sold in 2020 to reach the stockholders’ desired profit level. Type your answer here units (C) Assume that Wildhorse Company sells the same number of units in 2020 as it did in 2019. What would the selling price have to be in order to reach the stockholders’ desired profit level? New selling price $Type your answer here