Johnson Company manufactures and sells different colors of dry erase markers. Results from last year from the sale of green markers is given below: Sales revenue (79,000 units @ $4 each) Variable costs Contribution margin Fixed costs: Salaries of line supervisors Advertising expense Allocated general overhead Net loss $316,000 $237,000 $ 79,000 $ 43,000 $ 28,000 $ 19,000 $<11,000> Johnson Company is considering eliminating the green dry erase markers product line The company has determined that if the

Johnson Company manufactures and sells different colors of dry erase markers. Results from last year from the sale of green markers is given below: Sales revenue (79,000 units @ $4 each) Variable costs Contribution margin Fixed costs: Salaries of line supervisors Advertising expense Allocated general overhead Net loss $316,000 $237,000 $ 79,000 $ 43,000 $ 28,000 $ 19,000 $<11,000> Johnson Company is considering eliminating the green dry erase markers product line The company has determined that if the

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 1CE: The expected costs for the Maintenance Department of Stazler, Inc., for the coming year include:...

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JART manufactures and sells underwater markers. Its contribution margin income statement follows. Contribution Margin Income Statement Per Unit $ 6.00 For Year Ended December 31 Sales (470,000 units) Variable costs Direct materials Direct labor Variable overhead Contribution margin Fixed costs Fixed overhead Fixed general and administrative Income 1.51 0.39 0.60 3.50 0.30 0.25 $ 2.95 Annual Total $ 2,820,000 709,700 183,300 282,000 1,645,000 Required: 1. Compute income from the special offer. 2. Should the company accept or reject the special offer? 141,000 117,500 $ 1,386,500 A potential customer offers to buy 57,000 units for $2.90 each. These sales would not affect the company's sales through its normal channels. Details about the special offer follow. Direct materials cost per unit and variable overhead cost per unit would not change. • Direct labor cost per unit would be $0.50 because the offer would require overtime pay. • Accepting the offer would require incremental fixed…
JART manufactures and sells underwater markers. Its contribution margin income statement follows Contribution Hargin Income Statement Per Unit $ 6.00 For Year Ended December 31 Sales (590,000 units) Variable costs Direct materials Direct labor Varlable overhead Contribution margin Fixed costs Fixed overhead Annual Total $3,540,000 1.63 0.47 961,700 277,300 295,000 2,006,000 0.50 3.40 0.20 118,000 Fixed general and administrative 0.15 88,500 Income $ 3.05 $ 1,799,500 A potential customer offers to buy 69,000 units for $3.00 each. These sales would not affect the company's sales through its normal channels. Detals about the special offer follow. • Direct materials cost per unit and variable overhead cost per unit would not change • Direct labor cost per unit would be $0.50 because the offer would require overtime pay Accepting the offer would require incremental fixed general and administrative costs of $6,900. Accepting the offer would require no incremental fixed overhead costs.…
JART manufactures and sells underwater markers. Its contribution margin income statement follows. Contribution Margin Income Statement For Year Ended December 31 Per Unit Annual Total Sales (420,000 units) $ 7.00 $ 2,940,000 Variable costs Direct materials 1.46 613,200 Direct labor 0.44 184,800 Variable overhead 0.70 294,000 Contribution margin 4.40 1,848,000 Fixed costs Fixed overhead 0.30 126,000 Fixed general and administrative 0.25 105,000 Income $ 3.85 $ 1,617,000 A potential customer offers to buy 52,000 units for $3.70 each. These sales would not affect the company’s sales through its normal channels. Details about the special offer follow. Direct materials cost per unit and variable overhead cost per unit would not change. Direct labor cost per unit would be $0.62 because the offer would require overtime pay. Accepting the offer would require incremental fixed general and administrative costs of $5,200. Accepting the offer would require no…
JART manufactures and sells underwater markers. Its contribution margin income statement follows. Contribution Margin Income Statement For Year Ended December 31 Annual Total Sales (600,000 units) Variable costs Per Unit $ 7.00 $ 4,200,000 Direct materials Direct labor 984,000 1.64 0.56 336,000 Variable overhead 0.60 360,000 Contribution margin Fixed costs 4.20 2,520,000 Fixed overhead 0.20 Fixed general and administrative 120,000 90,000 0.15 Income $ 3.85 $ 2,310,000 A potential customer offers to buy 70,000 units for $3.60 each. These sales would not affect the company's sales through its normal channels. Details about the special offer follow • Direct materials cost per unit and variable overhead cost per unit would not change. . Direct labor cost per unit would be $0.71 because the offer would require overtime pay, Accepting the offer would require incremental fixed general and administrative costs of $7,000 Accepting the offer would require no incremental fixed overhead costs…
Hyper Color Company manufactures widgets. The following data is related to sales and production of the widgets for last year. Selling price per unit Variable manufacturing costs per unit Variable selling and administrative expenses per unit Fixed manufacturing overhead (in total) Fixed selling and administrative expenses (in total) Units produced during the year Units sold during year $170 $60 $6 OA. $107,200 OB. $334.000 OC. $350,800 OD. $238,000 $35,000 $9,000 1,700 1,400 Using absorption costing, what is operating income for last year? (Round any intermediary calculations to the nearest whole dollar)
The Peterson company incurred the following revenue and costs in the month of May: Sales Revenue $57,000 Direct Materials $12,000 Variable Selling Costs $5,000 Direct labor paid $9,000 Mfg. Plant Utility Costs $19,000 Fixed Adv. Costs $2,000 1. The company's gross margin is ? 2. If $10,000 of the mfg plant utility costs were fixed (and rest variable) then the Contribution Margin was? 3. If companys revenue is $530,000, profit before taxes $98000, and product costs are $390,000 then the companys period costs total is? 4. If fixed Costs are $15,000, operating income is $55, 000, revenues are $ 160,000, variable costs are $90,000, total Contribution Margin is?
K Maintenance costs at Red Dot Manufacturing over the past six months are listed in the following table. (Click the icon to view the maintenance costs.) Using the high-low method, what is the total maintenance costs at Red Dot Manufacturing if 18,000 machine hours were used? OA. $7,875 OB. $15,660 O C. $10,175 O D. $9,950 Maintenance costs Month January February March April May June Maintenance cost $9,500 $9,860 Print E $8,600 $8,840 $8,600 $8,100 Done Machine hours 15,800 17,300 14,500 16,100 17,100 15,500 - X - Remaining: 01:
Calculating and Using a Single Charging Rate The expected costs for the Maintenance Department of Stazler, Inc., for the coming year include: Fixed costs (salaries, tools): $72,930 per year Variable costs (supplies): $1.30 per maintenance hour Estimated usage by: Assembly Department 4,900 Fabricating Department 6,200 Packaging Department 11.000 Total maintenance hours 22,100 Actual usage by: Assembly Department 3,425 Fabricating Department 6,300 Packaging Department 10,200 Total maintenance hours 19,925 Required: 1. Calculate a single charging rate for the Maintenance Department. Round your answer to the nearest cent. per maintenance hour 2. Use this rate to assign the costs of the Maintenance Department to the user departments based on actual usage. Calculate the total amount charged for maintenance for the year. 3. What if the Assembly Department used 4,000 maintenance hours in the year? How much would have been charged out to the three departments? when required, round your answers…
ake's Roof Repair has provided the following data concerning its costs: Fixed Cost per Month Cost per Repair-Hour $ 21,300 $ 16.00 $ 7.00 $ 0.50 $ 1.50 Wages and salaries Parts and supplies Equipment depreciation $ 2,770 Truck operating expenses $5,780 $ 4,630 Administrative expenses $3,820 $ 0.80 For example, wages and salaries should be $21,300 plus $16.00 per repair-hour. The company expected to work 2,900 repair-hours in May, but actually worked 2,800 repair-hours. The company expects its sales to be $46.00 per repair-hour. Required: Compute the company's activity variances for May. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Rent
Shun Corporation manufactures and sells a hand held calculator. The following information relates to Shun's operations for last year: Unit product cost under variable costing Fixed manufacturing overhead cost for the year Fixed selling and administrative expense for the year Units (calculators) produced and sold $5.20 per unit $260,000 $180,000 400,000 What is Shun's absorption costing unit product cost for last year? Multiple Choice $4.10 per unit $6.30 per unit $4.55 per unit $5.85 per unit
Stratford Company distributes a lightweight lawn chair that sells for $15 per unit. Variable expenses are $6 per unit, and fixed expenses total $180,000 annually. 1. Assume that the operating results for last year were as follows:Sales . . . . . . . . . . . . . . . . . . . . . . . $360,000Variable expenses. . . . . . . . . . . . . 144,000Contribution margin . . . . . . . . . . . . 216,000Fixed expenses . . . . . . . . . . . . . . . 180,000Net operating income . . . . . . . . . . $ 36,000Sales (13,500 units at $20 per unit) . . . . . . . $270,000Variable expenses . . . . . . . . . . . . . . . . . . . . 189,000Contribution margin . . . . . . . . . . . . . . . . . . . 81,000Fixed expenses . . . . . . . . . . . . . . . . . . . . . . 90,000Net operating loss . . . . . . . . . . . . . . . . . . . . $ (9,000) a. Compute the degree of operating leverage at the current level of sales. b. The president expects sales to increase by 15% next year. By how much should net operating income…
Farrow Company reports the following annual results. Contribution Margin Income Statement Sales (440,000 units) Variable costs Direct materials Direct labor Overhead Contribution margin. Fixed costs Fixed overhead Fixed general and administrative Income Per Unit $15.00 2.00 4.00 2.50 6.50 2.00 1.50 $ 3.00 (a) Compute the income or loss for the special offer. (b) Should the company accept or reject the special offer? Required A Required B Annual Total $ 6,600,000. 880,000 1,760,000 1,100,000 2,860,000 The company receives a special offer for 44,000 units at $12 per unit. The additional sales would not affect its normal sales. Variable costs per unit would be the same for the special offer as they are for the normal units. The special offer would require incremental fixed overhead of $176,000 and incremental fixed general and administrative costs of $189,000. 880,000 660,000 $ 1,320,000 Complete this question by entering your answers in the tabs below.