Compute the contribution margin for each product. What is the expected net income?
Q: Cool Air Inc., manufactures single room sized air conditioners. The cost accounting system estimates…
A: Since, The Company has Surplus Capacity Available than the Minimum Per Unit Price for the Special…
Q: Futura Company purchases the 50,000 starters that it installs in its standard line of farm tractors…
A: Financial advantage (disadvantage) of making the starters = (Purchase price per unit - Relevant…
Q: A fiber company purchased base ingredients and produced a Petro Fiber for use in making air…
A: if Petro fiber sold at split off Point CALCULATION PARTICULAR AMOUNT A Sale at Split…
Q: What is the product margin? Should Janet make these proposed changes to her fees? You will answer…
A: Marginal costing is used by the management widely to determine the cost of an extra unit produced by…
Q: Filtration, Inc. manufactures filters for use in secondary water irrigation systems. The costs per…
A: Workings: Total cost = Direct material + Direct labor + variable overhead + fixed overhead.
Q: Futura Company purchases the 61,000 starters that it installs in its standard line of farm tractors…
A: If the cost of buying is more than the cost of making, then there will be financial advantage. If…
Q: Garden Labs produces a drug used for the treatment of arthritis. The drug is produced in batches.…
A:
Q: XYZ Enterprises produces high quality blankets sold to hotels and resorts. Blankets must be well…
A: The special order should be considered of it provides additional income to the business.
Q: ournal entry to record KLK’s research and development costs. Show the solution step by step
A: Journal entry: Journal entry is the book of original entry where first transactions are recorded in…
Q: Janet Gilbert is director of labs. She has some extra capacity and has contracted with some small…
A: Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for you. If…
Q: Futura Company purchases the 64,000 starters that it installs in its standard line of farm tractors…
A: The decision which relates to whether buying a product or manufacturing it is called the make or buy…
Q: Pumpkin Company needs 20,000 units of a certain part to use in one of its products. The following…
A: Variable cost means the cost which vary with the level of output and fixed cost means the cost which…
Q: Durant Company manufactures glass bottles for dairy products. The contribution margin is $0.42 per…
A: Net contribution margin after recall = Actual contribution margin - Additional cost incurred due to…
Q: Micron Manufacturing produces electronic equipment. This year, it produced 7,500 oscilloscopes at a…
A:
Q: Quality Clothing, Inc., produces skorts and jumper uniforms for school children. In the process of…
A: Given,
Q: The Brisbane Manufacturing Company produces a single model of a CD player. Each player is sold for…
A: Net present value is the difference between present value of cash inflows and present value of cash…
Q: KLK Clothing Company manufactures professionals clothing for women. In order to keep costs low while…
A: Working Note: Compute the research and development costs:
Q: Harold Manufacturing produces denim clothing. This year, it produced 5,000 denim jackets at a…
A: Incremental income: It is the income generated from additional sales. The income is calculated by…
Q: Old People Racquets manufactures pickleball racquets in four different models. For the year, the…
A: Decision making process has to look into short-term as well as long-term perspectives. On deciding…
Q: The KLK Clothing Company manufactures professionals clothing for women. In order to keep costs low…
A: The KLK Clothing Company manufactures professionals clothing for women. In order to keep costs low…
Q: Quality Clothing, Inc., produces skorts and jumper uniforms for school children. In the process of…
A:
Q: Ampro-Mag is a small company that makes materials for safely controlling hazardous spills of all…
A: Since you have posted multiple questions , we will do the first one for you . If you want any…
Q: Sabor Inc. is a medical testing laboratory that performs several tests and analyses for hospitals in…
A: The contribution margin per hour is calculated as ratio of contribution margin per unit and the…
Q: Harold Manufacturing produces denim clothing. This year, it produced 5,000 denim jackets at a…
A: It depicts the increase in income due to choosing different alternatives.
Q: Jasmine Gonazles, Administrative Director of Small Imaging Center, has been asked by the practice…
A: Hello, since your question has multiple sub-parts, we will solve first three sub-parts for you. If…
Q: BeLuxe Company manufactures a variety of natural skin care products that are used in spas across…
A: Acceptance/rejection of fresh order depends upon selling price offered by the purchaser and per-unit…
Q: Ginocera Inc. is a designer, manufacturer, and distributor of custom gourment kitchen knives. A new…
A: Income Statement: Company's income and expenditures along with profit or loss during the…
Q: Garden Labs produces a drug used for the treatment of arthritis. The drug is produced in batches.…
A: Computation is represented as below: As per the above computation, yes, Garden will accept the…
Q: Garden Labs produces a drug used for the treatment of arthritis. The drug is produced in batches.…
A:
Q: Garden Labs produces a drug used for the treatment of arthritis. The drug is produced in batches.…
A:
Q: Garden Labs produces a drug used for the treatment of arthritis. The drug is produced in batches.…
A:
Q: Ginocera Inc. is a designer, manufacturer, and distributor of low-cost, high-quality stainless steel…
A: The question is based on the concept of Cost Accounting.
Q: Piper Rose Boutique has been approached by the community college to make special polo shirts for the…
A: In case company receives a special order, firstly the company checks for its capacity to complete…
Q: Paper Roses Boutique has been approached by the community college to make special polo shirts for…
A: Special Order Decision: It is a one-time order that a customer makes. Here, managers perform…
Q: The KLK Clothing Company manufactures professionals clothing for women. In order to keep costs low…
A:
Q: Intercontinental Chemical Company, located in Buenos Aires, Argentina, recently received an order…
A: Relevant cost refers to that cost which is relevant for choosing the best alternative whereas…
Q: The Brisbane Manufacturing Company produces a single model of a CD player. Each player is sold for…
A: Hi student Since there are multiple subparts, we will answer only first three subparts. If you want…
Q: The Croydon division of CC Industries supplies the Hauser division with 100,000 units per month of…
A: Given information is: The Croydon division of CC Industries supplies the Hauser division with…
Q: Feinan Sports, Inc., manufactures sporting equipment, including weight-lifting gloves. A national…
A: Relevant Costing: Relevant cost is the cost for the special orders. The Relevant Cost: All the…
Q: Harold Manufacturing produces denim clothing. This year, it produced 5,000 denim jackets at a…
A: Income from Alternatives:- When companies have different alternatives available, then they choose…
Q: Walton Co. purchases the 400,000 compressors that it installs in its refrigerators from a Chinese…
A: Financial disadvantage upon making the product rather than buying from the chinese supplier: In…
Q: Wham Products, a maker of specialty products, is currently manufacturing and selling a product…
A: Normal units when the special order is considered=400000-5000=395,000
Q: PIM Industries Incorporated manufactures electronics components. Each unit costs $50 before the…
A: Operating profits are the total earnings of the entity over a specific period of time that is…
Q: UTAH CORP. is a chemical manufacturer that supplies various products to industrial users. The…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: UTAH CORP. is a chemical manufacturer that supplies various products to industrial users. The…
A: In order to compute the standard labor time, we need to factor in two more things a. the normal…
Q: Intercontinental Chemical Company, located in Buenos Aires, Argentina, recently received an order…
A: Relevant cost are the costs that makes the difference to the decision making process. Any past cost,…
Q: Ginocera Inc. is a designer, manufacturer, and distributor of custom gourment kitchen knives. A new…
A: Income Statement The purpose of preparing the income statement is to know the net income which was…
Gayle’s Chemical Company is a manufacturer of cosmetic products in Jamaica.
Due to the onslaught of the coronavirus (COVID -19), Gayle decided to produce two new products to help in reducing the spread of the virus. The following information is available:
Hand Sanitizer Gloves
Selling price per unit $46 $36
Variable cost per unit $38 $24
Total fixed costs are $234,000. Willard plans to sell 21,000 units of Hand Sanitizer and 7,000 units of Gloves.
Required:
- Compute the contribution margin for each product.
- What is the expected net income?
- Assume the sales mix is 3 units of Hand Sanitizer for every 1 unit of Gloves.
What is the break-even point in units for each product?
Assume the sales mix is 3 units of Hand Sanitizer for every 2 units of Gloves.
What is the break-even point in units for each product?
Step by step
Solved in 2 steps
- Bienestar, Inc., has two plants that manufacture a line of wheelchairs. One is located in Kansas City, and the other in Tulsa. Each plant is set up as a profit center. During the past year, both plants sold their tilt wheelchair model for 1,620. Sales volume averages 20,000 units per year in each plant. Recently, the Kansas City plant reduced the price of the tilt model to 1,440. Discussion with the Kansas City manager revealed that the price reduction was possible because the plant had reduced its manufacturing and selling costs by reducing what was called non-value-added costs. The Kansas City manufacturing and selling costs for the tilt model were 1,260 per unit. The Kansas City manager offered to loan the Tulsa plant his cost accounting manager to help it achieve similar results. The Tulsa plant manager readily agreed, knowing that his plant must keep pacenot only with the Kansas City plant but also with competitors. A local competitor had also reduced its price on a similar model, and Tulsas marketing manager had indicated that the price must be matched or sales would drop dramatically. In fact, the marketing manager suggested that if the price were dropped to 1,404 by the end of the year, the plant could expand its share of the market by 20 percent. The plant manager agreed but insisted that the current profit per unit must be maintained. He also wants to know if the plant can at least match the 1,260 per-unit cost of the Kansas City plant and if the plant can achieve the cost reduction using the approach of the Kansas City plant. The plant controller and the Kansas City cost accounting manager have assembled the following data for the most recent year. The actual cost of inputs, their value-added (ideal) quantity levels, and the actual quantity levels are provided (for production of 20,000 units). Assume there is no difference between actual prices of activity units and standard prices. Required: 1. Calculate the target cost for expanding the Tulsa plants market share by 20 percent, assuming that the per-unit profitability is maintained as requested by the plant manager. 2. Calculate the non-value-added cost per unit. Assuming that non-value-added costs can be reduced to zero, can the Tulsa plant match the Kansas City per-unit cost? Can the target cost for expanding market share be achieved? What actions would you take if you were the plant manager? 3. Describe the role that benchmarking played in the effort of the Tulsa plant to protect and improve its competitive position.Coyle Pharmaceuticals produces two organic chemicals (Org AB and Org XY) used in the production of two of its most wide-selling anti-cancer drugs. The controller and environmental manager have identified the following environmental activities and costs associated with the two products: Required: 1. Calculate the environmental cost per pound for each product. Which of the two products appears to cause the most degradation to the environment? 2. In which environmental category would you classify excessive use of materials and energy? 3. Suppose that the toxin releases cause health problems for those who live near the chemical plant. The costs, due to missed work and medical treatments, are estimated at 2,025,000 per year. How would assignment of these costs change the unit cost? Should they be assigned?Basuras Waste Disposal Company has a long-term contract with several large cities to collect garbage and trash from residential customers. To facilitate the collection, Basuras places a large plastic container with each household. Because of wear and tear, growth, and other factors, Basuras places about 200,000 new containers each year (about 20% of the total households). Several years ago, Basuras decided to manufacture its own containers as a cost-saving measure. A strategically located plant involved in this type of manufacturing was acquired. To help ensure cost efficiency, a standard cost system was installed in the plant. The following standards have been established for the products variable inputs: During the first week in January, Basuras had the following actual results: The purchasing agent located a new source of slightly higher-quality plastic, and this material was used during the first week in January. Also, a new manufacturing process was implemented on a trial basis. The new process required a slightly higher level of skilled labor. The higher- quality material has no effect on labor utilization. However, the new manufacturing process was expected to reduce materials usage by 0.25 pound per container. Required: 1. CONCEPTUAL CONNECTION Compute the materials price and usage variances. Assume that the 0.25 pound per container reduction of materials occurred as expected and that the remaining effects are all attributable to the higher-quality material. Would you recommend that the purchasing agent continue to buy this quality, or should the usual quality be purchased? Assume that the quality of the end product is not affected significantly. 2. CONCEPTUAL CONNECTION Compute the labor rate and efficiency variances. Assuming that the labor variances are attributable to the new manufacturing process, should it be continued or discontinued? In answering, consider the new processs materials reduction effect as well. Explain. 3. CONCEPTUAL CONNECTION Refer to Requirement 2. Suppose that the industrial engineer argued that the new process should not be evaluated after only one week. His reasoning was that it would take at least a week for the workers to become efficient with the new approach. Suppose that the production is the same the second week and that the actual labor hours were 9,000 and the labor cost was 99,000. Should the new process be adopted? Assume the variances are attributable to the new process. Assuming production of 6,000 units per week, what would be the projected annual savings? (Include the materials reduction effect.)
- ZZOOM, Inc., has decided to discontinue manufacturing its Z Best model. Currently, the company has 4,600 partially completed Z Best models on hand. The government has put a recall on a particular part in the Z Best model, so each base model must now be reworked to accommodate the style of the new part. The company has spent $110 per unit to manufacture these Z Best models to their current state. Reworking each Z Best model will cost $22 for materials and $25 for direct labor. In addition, $9 of variable overhead and $34 of allocated fixed overhead (relating primarily to depreciation of plant and equipment) will be allocated per unit. If ZZOOM completes the Z Best models, it can sell them for $180 per unit. On the other hand, another manufacturer is interested in purchasing the partially completed units for $105 each and converting them into Z Plus models. Prepare a differential analysis per unit to determine if ZZOOM should complete the Z Best models or sell them in their current state.Trifecta Distributors has decided to discontinue manufacturing its X Plus model. Currently, the company has 4,600 partially completed X Plus models on hand. The government has put a recall on a particular part in the X Plus model, so each base model must now be reworked to accommodate the style of the new part. The company has spent $110 per unit to manufacture these X Plus models to their current state. Reworking each X Plus model will cost $20 for materials and $20 for direct labor. In addition, $7 of variable overhead and $32 of allocated fixed overhead (relating primarily to depreciation of plant and equipment) will be allocated per unit. Il Trifecta completes the X Plus models, it can sell them for $160 per unit. On the other hand, another manufacturer is interested in purchasing the partially completed units for $104 each and converting them into Z Plus models. Prepare a differential analysis per unit to determine if Trifecta should complete the X Plus models or sell them in their current state.The PUPPY SAFETY Corp. is dedicated to the wholesale of microfiche systems to detect the location of lost pets. The company has a production capacity of 10,000 system units and currently only produces 8,000. The company is operating above its tie point. The sale price per system is $500.00 and the related costs are presented later. Required: Indicate whether this business should accept or reject a special order of 500 microchips at a price of $300. The client is the Humane Society and it is an order that will not be repeated in the future as this comes from non-recurring funds. When we learned that the Humane Society was seeking bids, we took it upon ourselves to send our sales specialists who brought a proposal prepared following the usual sales and marketing practices. Despite being a special order, if accepted, it will follow the typical pattern of routine orders in terms of transaction costs. This order has no effect on the routine business of PUPPY SAFETY. Manufacturing costs…
- The printing department is considering buying 10,000 additional rolls of gray cloth from an outside supplier at $2,000 per roll, which is much higher than Dover’s cost of weaving the roll. The printing department expects that 10% of the rolls obtained from the outside supplier will result in defective products. Should the printing department buy the gray cloth from the outside supplier? Show your calculations.Garden Labs produces a drug used for the treatment of arthritis. The drug is produced in batches. Chemicals costing $50,000 are mixed and heated, then a unique separation process extracts the drug from the mixture. A batch yields a total of 3,000 gallons of the chemicals. The first 2,500 gallons are sold for human use while the last 500 gallons, which contain impurities, are sold to veterinarians. The costs of mixing, heating, and extracting the drug amount to $155,000 per batch. The output sold for human use is pasteurized at a total cost of $130,000 and is sold for $600 per gallon. The product sold to veterinarians is irradiated at a cost of $20 per gallon and is sold for $450 per gallon. In March, Garden, which had no opening inventory, processed one batch of chemicals. It sold 2,000 gallons of product for human use and 300 gallons of the veterinarian product. Garden uses the net realizable value method for allocating joint production costs. Q. If Garden were to use the constant…Garden Labs produces a drug used for the treatment of arthritis. The drug is produced in batches. Chemicals costing $50,000 are mixed and heated, then a unique separation process extracts the drug from the mixture. A batch yields a total of 3,000 gallons of the chemicals. The first 2,500 gallons are sold for human use while the last 500 gallons, which contain impurities, are sold to veterinarians. The costs of mixing, heating, and extracting the drug amount to $155,000 per batch. The output sold for human use is pasteurized at a total cost of $130,000 and is sold for $600 per gallon. The product sold to veterinarians is irradiated at a cost of $20 per gallon and is sold for $450 per gallon. In March, Garden, which had no opening inventory, processed one batch of chemicals. It sold 2,000 gallons of product for human use and 300 gallons of the veterinarian product. Garden uses the net realizable value method for allocating joint production costs. Q. Calculate the gross margin on the sale…
- Garden Labs produces a drug used for the treatment of arthritis. The drug is produced in batches. Chemicals costing $50,000 are mixed and heated, then a unique separation process extracts the drug from the mixture. A batch yields a total of 3,000 gallons of the chemicals. The first 2,500 gallons are sold for human use while the last 500 gallons, which contain impurities, are sold to veterinarians. The costs of mixing, heating, and extracting the drug amount to $155,000 per batch. The output sold for human use is pasteurized at a total cost of $130,000 and is sold for $600 per gallon. The product sold to veterinarians is irradiated at a cost of $20 per gallon and is sold for $450 per gallon. In March, Garden, which had no opening inventory, processed one batch of chemicals. It sold 2,000 gallons of product for human use and 300 gallons of the veterinarian product. Garden uses the net realizable value method for allocating joint production costs. Q. Compute the cost of ending inventory…Garden Labs produces a drug used for the treatment of arthritis. The drug is produced in batches. Chemicals costing $50,000 are mixed and heated, then a unique separation process extracts the drug from the mixture. A batch yields a total of 3,000 gallons of the chemicals. The first 2,500 gallons are sold for human use while the last 500 gallons, which contain impurities, are sold to veterinarians. The costs of mixing, heating, and extracting the drug amount to $155,000 per batch. The output sold for human use is pasteurized at a total cost of $130,000 and is sold for $600 per gallon. The product sold to veterinarians is irradiated at a cost of $20 per gallon and is sold for $450 per gallon. In March, Garden, which had no opening inventory, processed one batch of chemicals. It sold 2,000 gallons of product for human use and 300 gallons of the veterinarian product. Garden uses the net realizable value method for allocating joint production costs. Q. How much in joint costs does Garden…Garden Labs produces a drug used for the treatment of arthritis. The drug is produced in batches. Chemicals costing $50,000 are mixed and heated, then a unique separation process extracts the drug from the mixture. A batch yields a total of 3,000 gallons of the chemicals. The first 2,500 gallons are sold for human use while the last 500 gallons, which contain impurities, are sold to veterinarians. The costs of mixing, heating, and extracting the drug amount to $155,000 per batch. The output sold for human use is pasteurized at a total cost of $130,000 and is sold for $600 per gallon. The product sold to veterinarians is irradiated at a cost of $20 per gallon and is sold for $450 per gallon. In March, Garden, which had no opening inventory, processed one batch of chemicals. It sold 2,000 gallons of product for human use and 300 gallons of the veterinarian product. Garden uses the net realizable value method for allocating joint production costs. Q. Suppose that the separation process…
