Culver Windows Inc. is in the process of setting a target price on its newly designed tinted window. Cost data relating to the window at a budgeted volume of 4,640 units are as follows. Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses (a) Per Unit $ 110 $ 70 $ 10 Markup Percentage $ 10 Total Culver Windows uses cost-plus pricing methods that are designed to provide the company with a 25% ROI on its tinted window line. A total of $1,178,560 in assets is committed to production of the new tinted window. $ 139,200 % $ 118,320 Compute the markup percentage under absorption-cost pricing that will allow Culver Windows to realize its desired ROI.

Culver Windows Inc. is in the process of setting a target price on its newly designed tinted window. Cost data relating to the window at a budgeted volume of 4,640 units are as follows. Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses (a) Per Unit $ 110 $ 70 $ 10 Markup Percentage $ 10 Total Culver Windows uses cost-plus pricing methods that are designed to provide the company with a 25% ROI on its tinted window line. A total of $1,178,560 in assets is committed to production of the new tinted window. $ 139,200 % $ 118,320 Compute the markup percentage under absorption-cost pricing that will allow Culver Windows to realize its desired ROI.

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Description: 13. Culver windows inc. is in the process of setting… Culver Windows Inc. is in the process of setting a target price on its newly designed tinted window. Cost data relating to the window ata budgeted volume of 4,640 units are as follows.Direct mater

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter9: Evaluating Variances From Standard Costs

Section: Chapter Questions

Problem 3CMA

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Firenza Company manufactures specialty tools to customer order. Budgeted overhead for the coming year is: Previously, Sanjay Bhatt, Firenza Companys controller, had applied overhead on the basis of machine hours. Expected machine hours for the coming year are 50,000. Sanjay has been reading about activity-based costing, and he wonders whether or not it might offer some advantages to his company. He decided that appropriate drivers for overhead activities are purchase orders for purchasing, number of setups for setup cost, engineering hours for engineering cost, and machine hours for other. Budgeted amounts for these drivers are 5,000 purchase orders, 500 setups, and 2,500 engineering hours. Sanjay has been asked to prepare bids for two jobs with the following information: The typical bid price includes a 40 percent markup over full manufacturing cost. Required: 1. Calculate a plantwide rate for Firenza Company based on machine hours. What is the bid price of each job using this rate? 2. Calculate activity rates for the four overhead activities. What is the bid price of each job using these rates? 3. Which bids are more accurate? Why?
JoyT Company manufactures Maxi Dolls for sale in toy stores. In planning for this year, JoyT estimated variable factory overhead of 600,000 and fixed factory overhead of 400,000. JoyT uses a standard costing system, and factory overhead is allocated to units produced using standard direct labor hours. The level of activity budgeted for this year was 10,000 direct labor hours, and JoyT used 10,300 actual direct labor hours. Based on the output accomplished during this year, 9,900 standard direct labor hours should have been used. Actual variable factory overhead was 596,000, and actual fixed factory overhead was 410,000 for the year. Based on this information, the variable factory overhead controllable variance for JoyT for this year was: a. 24,000 unfavorable. b. 2,000 unfavorable. c. 4,000 favorable. d. 22,000 favorable.
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