Kando Company incurs a $9.00 per unit cost for Product A, which it currently manufactures and sells for $13.50 per unit. Instead of manufacturing and selling this product, the company can purchase it for $5.00 per unit and sell it for $10.30 per unit. If it does so, unit sales would remain unchanged and $5.00 of the $9.00 per unit costs of Product A would be eliminated. 1. Prepare Incremental cost analysis. Should the company continue to manufacture Product A or purchase it for resale? (Round your answers to 2 decimal places.) Selling price per unit Cost per unit to make Cost per unit to buy Cost per unit not eliminated it bought Income per unit Company should Make Buy
Q: Gloves and mittens are two related goods made by Kettle Factory. The overall manufacturing overhead…
A: Since you have posted a question with multiple sub-parts, we will do the first three sub-parts for…
Q: Question: Under the units of production method of depreciation (a) How much depreciation will…
A: Units of Production is a one of the Method of Depreciation. Under this Method, Depreciation is…
Q: e balance sheet have in respect to evaluating the health of the firm?
A: Balance sheet of the firm shows the overall financial position of the company and show how much are…
Q: Integrity Company reported pre-tax financial income of P400,000 for 2022. In the computation of…
A: >Current Liability is a liability that is to be paid within a short period of time, say within a…
Q: ABC Inc, a telecommunications operator, entered into a contract with Mr. X on March 1, 20x2. In line…
A: Revenue recognition principle says that all revenues are recognised by the business when these are…
Q: alculate the total variable cost of producing 300 units taking into consideration the learning curve…
A: The formulae for calculation of learning curve effect on labor time is Y= aXb Y= cumulative average…
Q: Problem 1 - Adjusting Entries Required: The following data are taken from an…
A: Adjusting entries are made under accrual basis of accounting. In accrual basis of accounting…
Q: What is the depreciation deduction, using 200% DB method, after year 4 for an asset that costs…
A: Depreciation refers to reduction in the value of asset over time due to use, wear and tear and…
Q: If the firm were all equity financed and the firm followed a strict residual dividend policy, how…
A: When a company follows strict residual dividend policy then it means that company will calculate…
Q: Which statement is true? Multiple Choice ___ The larger the standard deviation, the lower the…
A: Standard deviation :— Standard Deviations is a basic mathematical concepts that measures volatility…
Q: Co. started work on an P8,000,000 fixed-price truction contract in 20x1. Information on the contract…
A: in case of construction contract it is important to understand the method of completion so fast in…
Q: 32 FYE Dec 33 34 Cash & Cash Equivalents 35 36 37 Loans Held For Sale - Other Loans - Held for Sale…
A: Current liability: It implies to a borrowing or debt that has to be repaid by the borrower within a…
Q: Determine respective amount of discount, amount payable and maturity date for the following dating:…
A: The discount amount and the date of maturity for the invoices have to be computed as per the terms…
Q: Santos Company is preparing a cash budget for February. The company has $19,000 cash at the…
A: The cash budget is prepared to estimate the cash balance and cash requirements for the period. The…
Q: How much is the retirement benefit expense taken to profit or loss for the year ended December 31,…
A: Employee benefit coat will be recognised as incurred for the year as per IAS 19.
Q: Kaumajet Factory produces two products: table lamps and desk lamps. It has two separate departments:…
A: >Predetermined overhead rate is the overhead allocation rate, used to 'apply' or 'allocate' the…
Q: Vintage World uses a perpetual inventory system. Journalize the following sales transactions for…
A: Date Accounts Debit Credit Jan. 4 Accounts Receivable - Conch Designs $10,000…
Q: Journalize the transactions
A: Journal entries forms the basic step for preparation any books of accounts. Dual accounting approach…
Q: Required: 1. Prepare the adjusting Journal entry on December 31. 2. Post the beginning balances and…
A: Prepaid Insurance :— Prepaid insurance means the value of Insurance paid before the Actual date.…
Q: 1. A purchaser dissatisfied with his purchases returns the goods to the seller for a cash refund.…
A: A perpetual inventory system, as opposed to a physical inventory, is a program that constantly…
Q: You are the audit senior on the audit engagement of Brown’s Farm Produce. You have assigned the role…
A: Audit Procedure: A method for gathering and analyzing data in order to give proof is known as an…
Q: On December 1, 20x4, ABC Co enters into a contract to deliver 10 cars to XYZ company which is to be…
A: As per the provision of PFRS 115 Revenue from contracts with customer. Revenue can be recognize as…
Q: Sarap Catering quotes a price of P910 per person for a banquet dinner. This price includes the 10%…
A: The company has a basis food price on which it charges 10% VAT and 20% service charges.
Q: In 20x1, ABC Co. enters into a contract to construct a building for a customer. ABC identifies its…
A: The profits recognised in the year can be estimated on the basis of percentage of the work completed…
Q: Galaxy Quest produces telescopes in a single processing department. All direct materials used in the…
A: Process costing uses both cost per equivalent unit and equivalent units of production to calculate…
Q: retirement benefit cost taken to profit or loss and to other comprehensive income, respectively?
A: The employee benefits expenses computed on the amount spend on by the entity in accordance with…
Q: what are Detail the steps in the budget process.
A: A budget is a tool for organizing, carrying out, and managing operations of a company to make the…
Q: Heron Corporation, a calendar year, accrual basis taxpayer, provides the following information for…
A: Schedule M-1 is prepared to reconcile the entity's books and records with its taxable income. It is…
Q: A company purchases a delivery van for $23,000. The van is estimated to have a four-year service…
A: Depreciation is a non-cash expense that helps an entity to charge the regular usage of an asset as…
Q: Information for two alternative projects involving machinery investments follows. Project 1 requires…
A: Net Present Value=(Present Value of Cash Inflows-Present Value of Cash Outflows)
Q: XYZ Corporation has a lower and an upper limit for its savings account at P40,000 and P70,000…
A: Additional funds refers to the concept where the business or person looks to expand the operations…
Q: All cost is in constant dollars. The contractor wishes to know when the trucks should be replaced…
A: To find out the replacement cycle we must calculate the equivalent annual cost. This helps an…
Q: Computer the expected return given these three economic states, their likelihoods, and the potential…
A: >Expected return is the rate of return that is expected to be earned on the prospective…
Q: Suppose that in the market for reserves, the discount rate is 6% and the federal funds rate is 6%.…
A: Securities - Securities are often divided into two categories: debt and equity. Equity securities…
Q: A property is classified as investment property if
A: As per IAS 40, Investment property is land or building or both that is : held to rental or for…
Q: 3 On 15 December 20X6, Breeze Transport repaired eight buses at a repair cost of $650 per bus. A…
A: “Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: Explain why ethical auditing is the regular comprehensive evaluation of the compliance of the firm’s…
A: An ethical audit is an inspection or assessment of processes or systems to guarantee compliance with…
Q: Sunk costs are easy to spot---they're the fixed costs associated with a decision. Do you agree?…
A: Suck Cost: a cost that has already been spent but cannot be recouped; this kind of expense is…
Q: On January 1, 2021, Madison Products issued $70 million of 6%, 10-year convertible bonds at a net…
A: Answer & Explanation 1). Entry on Issuance DR CR Cash 70,900,000…
Q: A company had net income of $252,000. Depreciation expense is $26,000. During the year, accounts…
A: Cash flow from operating activities is a part of the cash flow statement and it includes transection…
Q: Compute the total income tax due on the income of Carding in 2021.
A: It has been given in the question that Carding has opted at the beginning of the year to use 8% tax…
Q: Assume that Pawn has sufficient capacity to fill the order. What price should Pawn charge to make a…
A: Selling price = Total Cost + Profit Here required to find Firstly Total Profit. Then use the below…
Q: acquiree's net assets is more than the original equity market value because of the value of control.
A: During the acquisition the company will pay either more money to acquire net asset i.e goodwill Or…
Q: is the function of a budget?
A: Budget is nothing but planned allocation of revenue and expenses so that it help organization the…
Q: A machine that produces cellphone components is purchased on January 1, 2024, for $112,000. It is…
A: Depreciation is a reduction in the value of an asset due to the usage of that asset. It is charged…
Q: Chapman Company obtains 100 percent of Abernethy Company's stock on January 1, 2020. As of that…
A: Chapman Company obtains 100% of Abernethy Company's stock as on 1st Jan 2020. The Stock is acquired…
Q: Jack and Jill are owners of UpAHill, an S Corporation. They own 25 and 75 percent, respectively.…
A: Detailed answer below: Year 1:Ordinary Income $44,500 (includes $2,000 of interest income related to…
Q: Assuming Carding uses OSD, how much is the net taxable income from profession? a. 460,000 b. 540,000…
A: OSD refers to the Optional standard deduction. As per the provision of OSD 40% of gross receipt/sale…
Q: Integrity Company leased equipment to a lessee on July 1, 2021. The lease is for 8 years. The first…
A: Annual Payments: P900,000 Number of lease years: 8 years Implicit interest rate: 10% Interest…
Q: Requirement 2: (a)Calculate the IRR. (Do not include the per cent sign (%). Round your answers to 2…
A: The net present value is used when there are a series of cash flows. The Net Present Value is…
Step by step
Solved in 2 steps
- Zena Technology sells arc computer printers for $55 per unit. Unit product costs are: A special order to purchase 15,000 arc printers has recently been received from another company and Zena has idle capacity to fill the order. Zena will incur an additional $2 per printer for additional labor costs due to a slight modification the buyer wants made to the original product. One-third of the manufacturing overhead costs is fixed and will be incurred no matter how many units are produced. When negotiating the price, what is the minimum selling price that Zena should accept for this special order?Cinnamon Depot bakes and sells cinnamon rolls for $1.75 each. The cost of producing 500,000 rolls in the prior year was: At the start of the current year, Cinnamon Depot received a special order for 18,000 rolls to be sold for $1.50 per roll. The company estimates it will incur an additional $1,000 in total fixed costs in order to lease a special machine that forms the rolls in the shape of a heart per the customers request. This order will not affect any of its other operations. Should the company accept the special order? (Show your work.)Markson and Sons leases a copy machine with terms that include a fixed fee each month plus acharge for each copy made. Markson made 9,000 copies and paid a total of $480 in January. In April, they paid $320 for 5,000 copies. What is the variable cost per copy if Markson uses the high-low method to analyze costs?
- Dimitri Designs has capacity to produce 30,000 desk chairs per year and is currently selling all 30,000 for $240 each. Country Enterprises has approached Dimitri to buy 800 chairs for $210 each. Dimitris normal variable cost is $165 per chair, including $50 per unit in direct labor per chair. Dimitri can produce the special order on an overtime shift, which means that direct labor would be paid overtime at 150% of the normal pay rate. The annual fixed costs will be unaffected by the special order and the contract will not disrupt any of Dimitris other operations. What will be the impact on profits of accepting the order?On January 1, 2019, Piper Company entered into an agreement with Save-Mart to sell its most popular product, the gadget. The contract stipulates that the price per unit will decrease as Save-Mart purchases higher volumes of the gadget, as follows: The contract states that Save-Mart pays Piper the unit price based on the current sales volume. Once a volume threshold is reached, the price is retroactively reduced to the applicable price per unit. Based on its past experience with similar contracts, Piper believes that the total sales volume for the year will be 1,800 units and uses the most likely amount approach to estimate variable consideration. In addition, Piper concludes it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur once the uncertainty surrounding the variable consideration is resolved. Required: 1. Determine the transaction price per unit that Piper should use to record revenue. 2. Assume that Save-Mart purchases 800 units in the first quarter of 2019 and 900 units in the second quarter of 2019. Prepare Pipers journal entries to record the sales in the first and second quarters. 3. Given the higher than expected sales volume in the first half of the year, Piper increases its estimate of the sales volume to 2,800 units. Prepare the journal entry to record this change in estimate.Kando Company incurs a $9 per unit cost for Product A, which it currently manufactures and sells for $13.50 per unit. Instead of manufacturing and selling this product, the company can purchase it for $5 per unit and sell it for $12 per unit. If it does so, unit sales would remain unchanged and $5 of the $9 per unit costs of Product A would be eliminated. Should the company continue to manufacture Product A or purchase it for resale?
- Diskmar has received a special order for 2,000 units of its product at a special price of $75. The product normally sells for $100 and has the following manufacturing costs:Direct material costs are $30; Direct labor costs are $20; and Variable Overhead costs are $15. Assume that Diskmar has sufficient capacity to fill the order without harming normal production and sales. a. If Diskmar accepts the order, what effect will the order have on the company's short-term profit? b. What minimum price should Diskmar charge to achieve a $25,000 incremental profit? c. Now assume Diskmar is currently operating at full capacity and cannot fill the order without harming normal production and sales. If Diskmar accepts the order, what effect will the order have on the company's short-term profit?Anson Corp. manufactures a product that yields the by-product, "Yum". The only costs associated with Yum are selling costs of PO.10 for each unit sold. Anson accounts for sales of Yum by deducting Yum's separable costs from Yum's sales, and then deducting this net amount from the major product's cost of goods sold. Yum's sales were 100,000 units at P1 each. If Anson changes its method of accounting for Yum's sales by showing the net revenue as other income, then net income wouldCamp Corporation produces a single product that it currently sells for P10. Fixed expenses are P120,000 for the year and variable expenses are P6 per unit. In addition, Camp’s salespersons are paid a commission of 10% of their sales.A customer has just approached Camp to make a special, one-time purchase of 10,000 units. These units would not be sold by the salespeople, and therefore no commission would have to be paid. The price Camp would have to charge on this special order to earn an additional profit of P40,000 is: P9.00 per unit P10.00 per unit P5.00 per unit P11.20 per unit
- For the next 2 items. Markgil Corp. manufactures a product that yields the by-product "Yum". The only costs associated with Yum are selling costs of P.10 for each unit sold. Abel accounts for sales of Yum by deducting Yum's separable costs from Yum's sales, and then deducting this net amount from the major product's cost of goods sold. Yum's sales were 100,000 units at P1.00 each. If Markgil changes its method of accounting for Yum's sales by showing the net amount as additional sales revenue, then Markgil's gross margin would * a. Increase by P90,000 b. Decrease by P90,000 c. Increase by P100,000 d. Increase by P100,000 e. Be unaffected If Markgil changes its method of accounting for Yum's sales by showing the net amount as other income, then Markgil's gross margin would * a. Increase by P90,000 b. Decrease by P90,000 c. Increase by P100,000 d. Increase by P110,000 e. Be unaffectedCapitol, Incorporated has received a special order for 2,000 units of its product at a special price of $195. The product normally sells for $260 and has the following manufacturing costs: Cost per Unit Direct materials $ 78 Direct labor 52 Variable manufacturing overhead 39 Fixed manufacturing overhead 65 Total unit cost $ 234 Assume that Capitol has sufficient capacity to fill the order without harming normal production and sales. Required: If Capitol accepts the order, what effect will the order have on the company’s short-term profit? What minimum unit price should Capitol charge to achieve a $65,000 incremental profit? Now, assume Capitol is currently operating at full capacity and cannot fill the order without harming normal production and sales. If Capitol accepts the order, what effect will the order have on the company’s short-term profit?Regis Company manufactures plugs at a cost of $36 per unit, which includes $8 of fixed overhead. Regis needs 30,000 of these plugs annually (as part of a larger product it produces). Orlan Company has offered to sell these units to Regis at $33 per unit. If Regis decides to purchase the plugs, $60,000 of the annual fixed overhead cost will be eliminated, and the company may be able to rent the facility previously used for manufacturing the plugs. If Regis Company purchases the plugs but does not rent the unused facility, the company would: