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Edile Accessories (EA) makes travel bags, both for sale under their own label ("Branded") and for other resellers to put their label on the bags ("Private-Label"). The bags sold through the two channels are similar, but they differ slightly in the quality of materials and detail in the manufacturing process. The manufacturing plant at EA has two departments. Department A-101 was the original manufacturing facility and many of the machines are original. Department A-102 is new, with state-of-the-art equipment. The new equipment facilitates the additional care taken with the Branded product. The following information presents financial results for the two models from last year: Private Label Sales revenue Direct material Direct labor Branded $ 804,000 $ 624,000 252,000 180,000 a. Using plantwide allocation b. Using department allocation. 188,400 128,400 Manufacturing overhead. Department A-101 Department A-102 Total overhead The product costing system at EA allocates manufacturing overhead on the basis of direct labor costs. Required: a. Compute the profit or loss for each product using plantwide allocation. b. Compute the profit or loss for each product using department allocation. Note: For all requirements, loss amounts should be indicated by minus sign. Do not round Intermediate calculations. Enter your answers rounded to the nearest whole number. Profit or Loss Private Label Total $1,428,000 440,400 308,400 $ 237,600 317,520 $ 555,120 Branded

Edile Accessories (EA) makes travel bags, both for sale under their own label ("Branded") and for other resellers to put their label on the bags ("Private-Label"). The bags sold through the two channels are similar, but they differ slightly in the quality of materials and detail in the manufacturing process. The manufacturing plant at EA has two departments. Department A-101 was the original manufacturing facility and many of the machines are original. Department A-102 is new, with state-of-the-art equipment. The new equipment facilitates the additional care taken with the Branded product. The following information presents financial results for the two models from last year: Private Label Sales revenue Direct material Direct labor Branded $ 804,000 $ 624,000 252,000 180,000 a. Using plantwide allocation b. Using department allocation. 188,400 128,400 Manufacturing overhead. Department A-101 Department A-102 Total overhead The product costing system at EA allocates manufacturing overhead on the basis of direct labor costs. Required: a. Compute the profit or loss for each product using plantwide allocation. b. Compute the profit or loss for each product using department allocation. Note: For all requirements, loss amounts should be indicated by minus sign. Do not round Intermediate calculations. Enter your answers rounded to the nearest whole number. Profit or Loss Private Label Total $1,428,000 440,400 308,400 $ 237,600 317,520 $ 555,120 Branded

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter9: Standard Costing: A Functional-based Control Approach
Section: Chapter Questions
Problem 12E: Quincy Farms is a producer of items made from farm products that are distributed to supermarkets....
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Edile Accessories (EA) makes travel bags, both for sale under their own label ("Branded") and for other resellers to put their label on the bags ("Private-Label"). The bags sold through the two channels are similar, but they differ slightly in the quality of materials and detail in the manufacturing process. The manufacturing plant at EA has two departments. Department A-101 was the original manufacturing facility and many of the machines are original. Department A-102 is new, with state-of-the-art equipment. The new equipment facilitates the additional care taken with the Branded product. The following information presents financial results for the two models from last year: Private Label Sales revenue Direct material Direct labor Branded $ 804,000 $ 624,000 252,000 180,000 a. Using plantwide allocation b. Using department allocation. 188,400 128,400 Manufacturing overhead. Department A-101 Department A-102 Total overhead The product costing system at EA allocates manufacturing overhead on the basis of direct labor costs. Total $1,428,000 Profit or Loss Private Label Required: a. Compute the profit or loss for each product using plantwide allocation. b. Compute the profit or loss for each product using department allocation. Note: For all requirements, loss amounts should be indicated by minus sign. Do not round intermediate calculations. Enter your answers rounded to the nearest whole number. 440,400 308,400 $ 237,600 317,520 $ 555,120 Branded
Transcribed Image Text:Edile Accessories (EA) makes travel bags, both for sale under their own label ("Branded") and for other resellers to put their label on the bags ("Private-Label"). The bags sold through the two channels are similar, but they differ slightly in the quality of materials and detail in the manufacturing process. The manufacturing plant at EA has two departments. Department A-101 was the original manufacturing facility and many of the machines are original. Department A-102 is new, with state-of-the-art equipment. The new equipment facilitates the additional care taken with the Branded product. The following information presents financial results for the two models from last year: Private Label Sales revenue Direct material Direct labor Branded $ 804,000 $ 624,000 252,000 180,000 a. Using plantwide allocation b. Using department allocation. 188,400 128,400 Manufacturing overhead. Department A-101 Department A-102 Total overhead The product costing system at EA allocates manufacturing overhead on the basis of direct labor costs. Total $1,428,000 Profit or Loss Private Label Required: a. Compute the profit or loss for each product using plantwide allocation. b. Compute the profit or loss for each product using department allocation. Note: For all requirements, loss amounts should be indicated by minus sign. Do not round intermediate calculations. Enter your answers rounded to the nearest whole number. 440,400 308,400 $ 237,600 317,520 $ 555,120 Branded
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