CALCULATOR PRINTER VERSION ( BACK NE National Corporation needs to set a target price for its newly designed product M14-M16. The following data relate to this new product. Per Unit Total Direct materials $26 Direct labor $44 Variable manufacturing overhead $15 Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses $1,377,000 $ 5 $ 1,053,000 These costs are based on a budgeted volume of 81,000 units produced and sold each year. National uses cost-plus pricing methods to set its target selling price. The markup percentage on total unit cost is 40%. Compute the total variable cost per unit, total fixed cost per unit, and total cost per unit for M14-M16. Variable cost per unit %$4 Fixed cost per unit Total cost per unit %24

CALCULATOR PRINTER VERSION ( BACK NE National Corporation needs to set a target price for its newly designed product M14-M16. The following data relate to this new product. Per Unit Total Direct materials $26 Direct labor $44 Variable manufacturing overhead $15 Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses $1,377,000 $ 5 $ 1,053,000 These costs are based on a budgeted volume of 81,000 units produced and sold each year. National uses cost-plus pricing methods to set its target selling price. The markup percentage on total unit cost is 40%. Compute the total variable cost per unit, total fixed cost per unit, and total cost per unit for M14-M16. Variable cost per unit %$4 Fixed cost per unit Total cost per unit %24

Financial & Managerial Accounting

14th Edition

ISBN:9781337119207

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter18: Activity-Based Costing

Section: Chapter Questions

Problem 3ADM: Production run size and activity improvement Littlejohn, Inc. manufactures machined parts for the...

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Production run size and activity improvement Littlejohn, Inc. manufactures machined parts for the automotive industry. The activity cost associated with Part XX-10 is as follows: Activity Activity-Base Usage Activity Rate = Activity Cost Fabrication 250 dlh 80per dlh 20,000 Setup 10 setups 80 per setup 800 Production control 10 prod, runs 30 per prod, run 300 Moving 10 moves 25 per move 250 Total activity cost per unit 21,350 Estimated units of production 500 Activity cost per unit 42.70 Each unit requires 30 minutes of fabrication direct labor. Moreover, part XX-10 is manufactured in production run sizes of 50 units. Each production run is set up, scheduled (production control), and moved as a batch of 50 units. Management is considering improvements in the setup, production control, and moving activities in order to cut the production run sizes by half. As a result, the number of setups, production runs, and mows will double from 10 to 20. Such improvements are expected to speed the companys ability to respond to customer orders. Setup is reengineered so that it takes 60% of the original cost per setup. Production control software will allow production control effort and cost per production run to decline by 60%. Moving distance was reduced by 40%, thus reducing the cost per mow by the same amount. A. Determine the revised activity cost per unit under the proposed changes. B. Did these improvements reduce the activity cost per unit? C. What cost per unit for setup would be required for the solution in (A) to equal the base solution?
EstimatedFixedCost EstimatedVariableCost(perunitsold) Production costs: Direct materials $19 Direct labor 13 Factory overhead $261,300 10 Selling expenses: Sales salaries and commissions 54,300 4 Advertising 18,400 Travel 4,100 Miscellaneous selling expense 4,500 4 Administrative expenses: Office and officers' salaries 53,100 Supplies 6,500 2 Miscellaneous administrative expense 6,040 2 Total $408,240 $54 It is expected that 8,640 units will be sold at a price of $135 a unit. Maximum sales within the relevant range are 11,000 units. Required: Question Content Area 1. Prepare an estimated income statement for 20Y7. Belmain Co.Estimated Income StatementFor the Year Ended December 31, 20Y7 $- Select - Cost of goods sold: $- Select - - Select - - Select -…
Question Q1Moona Inc. produces Mobile phones. Information of the company's operations last year appear below: Fixed cost:Fixed Manufacturing overhead Rs 40,000Fixed Selling & Administrative Rs 60,000Selling Price per unit Rs 100Variable cost per unit:Direct Materials Rs 30Direct labor Rs 10Variable Manufacturing overhead Rs 5Variable Selling & Administrative Rs 2Units In beginning Inventory 0Units Produced 2000Units Sold 1900 Required: a. Compute the unit product cost under both absorption and variable costing.b. Prepare an income statement for the year using absorption costing.c. Prepare a contribution format income statement for the year using variable costing. d. Prepare a report reconciling the difference in net operating income between absorption and variable costing for the year.
Average Cost per UnitDirect materials . . . . . . . . . . . . . . . . . . . . . . . . . $7.00Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4.00Variable manufacturing overhead . . . . . . . . . $1.50Fixed manufacturing overhead . . . . . . . . . . . $5.00Fixed selling expense . . . . . . . . . . . . . . . . . . . $3.50Fixed administrative expense . . . . . . . . . . . . . $2.50Sales commissions . . . . . . . . . . . . . . . . . . . . . . $1.00Variable administrative expense . . . . . . . . . . $0.50 Answer all questions independently.Required:1. What is the incremental manufacturing cost incurred if the company increases production from 20,000 to 20,001 units?2. What is the incremental cost incurred if the company increases production and sales from 20,000 to 20,001 units?3. Assume that Kubin Company produced 20,000 units and expects to sell 19,800 of them. If a new customer unexpectedly emerges…
Subject: Cost management & accounting MCQs: 1) Grover Company has the following data for the production and sale of 2,000 units. Sales price per unit $ 800 per unitFixed costs: Marketing and administrative $ 400,000 per periodManufacturing overhead $ 200,000 per periodVariable costs: Marketing and administrative $ 50 per unitManufacturing overhead $ 80 per unitDirect labor $ 100 per unitDirect materials $ 200 per unitWhat is the total manufacturing cost per unit? a) $380 b) $480 c) $730 d) $430 2) Vegas Company has the following unit costs: Variable manufacturing overhead $ 25 Direct materials 20 Direct labor 19 Fixed manufacturing overhead 12 Variable marketing and administrative 7 Vegas produced and sold 10,000 units. If the product sells for $100, what is the gross margin?…
I. PROBLEM SOLVINGAnswer the following items on the space provided. Show your computations.At the beginning of 201A, ABC Company had the following standard costs for one (1) of its chemical products:Direct material (3 pounds at P3.20) P9.60Labor standard (0.9 hours at P9.00) 8.10Variable overhead (0.9 hours at P1.50) 1.35Fixed overhead (0.9 hours at P4.00) 3.60Total P22.65ABC computes its overhead rates using budgeted capacity, which is 144,000 units. Actual results for 201Aare:Units produced 140,000 unitsMaterials purchased 421,175 lbs. at P3.30Materials used 421,000 lbs.Direct labor 128,750 hrs at P8.90Fixed overhead P517,525Variable overhead 218,000Required: Indicate whether conditions are favorable or unfavorable. 4. Labor rate variance (LRV)5. Labor efficiency variance (LEV)6. Variable overhead (VOH) rate variance7. VOH efficiency variance8. Fixed overhead (FOH) spending variance9. FOH volume variance
I. PROBLEM SOLVINGAnswer the following items on the space provided. Show your computations.At the beginning of 201A, ABC Company had the following standard costs for one (1) of its chemical products:Direct material (3 pounds at P3.20) P9.60Labor standard (0.9 hours at P9.00) 8.10Variable overhead (0.9 hours at P1.50) 1.35Fixed overhead (0.9 hours at P4.00) 3.60Total P22.65ABC computes its overhead rates using budgeted capacity, which is 144,000 units. Actual results for 201Aare:Units produced 140,000 unitsMaterials purchased 421,175 lbs. at P3.30Materials used 421,000 lbs.Direct labor 128,750 hrs at P8.90Fixed overhead P517,525Variable overhead 218,000Required: Indicate whether conditions are favorable or unfavorable. 1. Material purchase price variance (MPPV)2. Material price usage variance (MPUV)3. Material quantity variance (MQV)4. Labor rate variance (LRV)5. Labor efficiency variance (LEV)6. Variable overhead (VOH) rate variance7. VOH efficiency variance8. Fixed overhead (FOH)…
Comprehensive Activity-Based Costing Exercise [LO7–2, LO7–3, LO7–4, LO7–5] A dvanced Products Corporation has supplied the following data from its activity-based costing system: Overhead Costs Wages and salaries . . . . . . . . . . . . . $300,000 Other overhead costs . . . . . . . . . . . 100,000 Total overhead costs . . . . . . . . . . . . $400,000 Activity Cost Pool Activity Measure Total Activity for the Year Supporting direct labor . . . . . . . . . . . . . Number of direct labor-hours 20,000 DLHs Order processing . . . . . . . . . . . . . . . . . . Number of customer orders 400 orders Customer support . . . . . . . . . . . . . . . . . Number of customers 200 customers Other . . . . . . . . . . . . . . . . . . . . . . . . . . . This is an organization sustaining activity Not applicable Distribution of Resource Consumption Across Activities Supporting Direct Labor Order Processing Customer Support Other Total Wages and salaries . . . . . 40% 30% 20% 10% 100% Other overhead costs . .…
Cost Accounting Need Help with question 1. Simplifying the ABC System: Equally Accurate Reduced ABC Systems Selected activities and other information are provided for Patterson Company for its most recent year of operations. Expected Consumption Ratios Activity Driver Quantity Wafer A Wafer B 7. Inserting dies Number of dies 2,000,000 0.70 0.30 8. Purchasing materials Number of purchase orders 2,500 0.20 0.80 1. Developing test programs Engineering hours 10,000 0.25 0.75 3. Testing products Test hours 20,000 0.60 0.40 ABC assignments $1,500,000 $1,500,000 Total overhead cost…
Deuter Int’l Business manufactures two products, Product L11 and Product L12. The company is considering adopting an activity-based costing system with the following activity pools, activity measures, and expected activity: Expected Activity Activity Cost Pools Estimated Overhead Cost Product L11 Product 12 Total Machine setups required $200,000 600 1,400 2,000 Purchase orders issued 38,382 500 100 600 Machine-hours required 92,650 6,800 10,200 17,000 $331,032 The amount overhead costs assigned to Product L11 would be closest to: Question 15 options: 1) $331,032 2) $129,045 3) $165,516 4) $130,758
KPR manufactures deals in various products. Relevant details of the products are as under: AWAXAYAZ Estimated annual demand (units)5000100070008000 Sales price per unit (Rs.)150180154175 Material consumption: Q (Rs)2729.524.529.75 Labor hours (Rs)5056.2543.7562.5 Variable overheads (based on labor cost) 70%80%10%90% Fixed overheads per unit (Rs.)10201416 Machine hours required: Processing machine hours 56810 The capacity utilization is as under:Hours Processing machine 150,000 RequiredCompute the number of units of each product that the company should produce in order tomaximize the profit. (B) KPR manufactures is considering a special order for 20 handcrafted gold bracelets to be given as gifts to members of a wedding party. The normal selling price of a gold bracelet is Rs 184 and its unit product cost is Rs140.00 as shown below: Direct materials . . . . . . . . . . . . . . . . . . . . Rs 81.00Direct labor . . . . . . . . . . . . . . . . . . . . . . . 42.00Manufacturing…
Q15. A company manufacturing two products furnishes the following data Annual output: Product Output units Machine Hours Purchase Orders Machine set-ups A 5000 20000 160 20 B 60000 120000 384 44 Total 65000 140000 544 64 The annual overheads are as under. Rs Volume related activity costs 550,000 Set up related costs 820,000 Purchase related costs 618,000 Total 1,988,000 You are required to calculate the overheads cost per unit of each product A and B based on Activity based costing method.