In addition to the unit indirect manufacturing costs, the following data are expected for the company's Emery Company manufactures wheel rims. The company produces two wheel rim models: standard and deluxe. For 2019, Emery's managers have decided to use the same indirect manufacturing costs per wheel standard and deluxe models for 2019: im that they computed in 2018 using activity-based costing. (Click the icon to view the 2018 indirect manufacturing costs per wheel rim.) E (Click the icon to view the expected information.) Because of limited machine hour capacity, Emery can produce either 2,000 standard rims or 2,000 deluxe rims. Read the requirements. Requirement 1. If Emery's managers rely on the ABC unit cost data computed in 2018, which model will they produce? Carry each cost to the nearest cent. (Ignore selling and administrative expenses for this calculation.) Jse the ABC unit cost data to compute the gross profit per unit for each model. Data Table Data Table ABC Data Gross Profits Standard Deluxe Sales price Indirect Manufacturing Cost Per Unit Standard Deluxe Direct materials Standard Deluxe Sales price 2$ 910.00 $ 1,000.00 Direct labor ABC costs 403.60 $ 459.60 Direct materials 33.00 46.00 Indirect manufacturing costs Single-rate costs 2$ 323.70 $ 539.50 Direct labor 48.00 56.00 Activate Windows nter any number in the edit fields and then continue to the next question.
In addition to the unit indirect manufacturing costs, the following data are expected for the company's Emery Company manufactures wheel rims. The company produces two wheel rim models: standard and deluxe. For 2019, Emery's managers have decided to use the same indirect manufacturing costs per wheel standard and deluxe models for 2019: im that they computed in 2018 using activity-based costing. (Click the icon to view the 2018 indirect manufacturing costs per wheel rim.) E (Click the icon to view the expected information.) Because of limited machine hour capacity, Emery can produce either 2,000 standard rims or 2,000 deluxe rims. Read the requirements. Requirement 1. If Emery's managers rely on the ABC unit cost data computed in 2018, which model will they produce? Carry each cost to the nearest cent. (Ignore selling and administrative expenses for this calculation.) Jse the ABC unit cost data to compute the gross profit per unit for each model. Data Table Data Table ABC Data Gross Profits Standard Deluxe Sales price Indirect Manufacturing Cost Per Unit Standard Deluxe Direct materials Standard Deluxe Sales price 2$ 910.00 $ 1,000.00 Direct labor ABC costs 403.60 $ 459.60 Direct materials 33.00 46.00 Indirect manufacturing costs Single-rate costs 2$ 323.70 $ 539.50 Direct labor 48.00 56.00 Activate Windows nter any number in the edit fields and then continue to the next question.
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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Concept explainers
Cost-Volume-Profit Analysis
Cost Volume Profit (CVP) analysis is a cost accounting method that analyses the effect of fluctuating cost and volume on the operating profit. Also known as break-even analysis, CVP determines the break-even point for varying volumes of sales and cost structures. This information helps the managers make economic decisions on a short-term basis. CVP analysis is based on many assumptions. Sales price, variable costs, and fixed costs per unit are assumed to be constant. The analysis also assumes that all units produced are sold and costs get impacted due to changes in activities. All costs incurred by the company like administrative, manufacturing, and selling costs are identified as either fixed or variable.
Marginal Costing
Marginal cost is defined as the change in the total cost which takes place when one additional unit of a product is manufactured. The marginal cost is influenced only by the variations which generally occur in the variable costs because the fixed costs remain the same irrespective of the output produced. The concept of marginal cost is used for product pricing when the customers want the lowest possible price for a certain number of orders. There is no accounting entry for marginal cost and it is only used by the management for taking effective decisions.
Question
Transcribed Image Text:Emery Company manufactures wheel rims. The company produces two wheel rim models: standard and
deluxe. For 2019, Emery's managers have decided to use the same indirect manufacturing costs per wheel
rim that they computed in 2018 using activity-based costing.
In addition to the unit indirect manufacturing costs, the following data are expected for the company's
standard and deluxe models for 2019:
E (Click the icon to view the expected information.)
(Click the icon to view the 2018 indirect manufacturing costs per wheel rim.)
Because of limited machine hour capacity, Emery can produce either 2,000 standard rims or 2,000 deluxe
rims.
Read the requirements.
Requirement 1. If Emery's managers rely on the ABC unit cost data computed in 2018, which model will they produce? Carry each cost to the nearest cent. (Ignore selling and administrative expenses for this
calculation.)
Use the ABC unit cost data to compute the gross profit per unit for each model.
Data Table
Data Table
ABC Data Gross Profits
Standard
Deluxe
Sales price
Indirect Manufacturing Cost Per Unit
Standard
Deluxe
Direct materials
Standard
Deluxe
Sales price
$
910.00 $ 1,000.00
Direct labor
ABC costs
403.60 $
459.60
Direct materials
33.00
46.00
Indirect manufacturing costs
Single-rate costs
$
323.70 $
539.50
Direct labor
48.00
56.00
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Transcribed Image Text:- X
Data Table
Data Table
Emery Company manufactures wheel rims. The company produces two wheel rim models:
deluxe. For 2019, Emery's managers have decided to use the same indirect manufacturing
rim that they computed in 2018 using activity-based costing.
(Click the icon to view the 2018 indirect manufacturing costs per wheel rim.)
Standard
Deluxe
Indirect Manufacturing Cost Per Unit
Sales price
$
910.00 $ 1,000.00
Standard
Deluxe
Direct materials
33.00
46.00
АВС costs
$
403.60 $
459.60
Direct materiais
Direct labor
48.00
56.00
Single-rate costs
$
323.70 $
539.50
Direct labor
Indirect manufacturing costs
Print
Done
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Gross profit per unit
Emery's managers will produce 2000 units of the
model to maximize income.
Requirement 2. If the managers rely on the single plantwide overhead allocation rate cost data, which model will they produce?
Use the single plantwide allocation rate cost data to compute the gross profit per unit for each model. (Round amounts to the nearest cent, $X.XX.)
Single-Allocation-Base Data Gross Profits
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