Lockrite Security Company manufacturers home alarms. Currently, it is manufacturing one of its components at a total cost of $43, which includes fixed costs of $12 per unit. An outside provider of this component has offered to sell Lockrite the component for $35. Provide a differential analysis of the outside purchase proposal. If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Make Component (Alternative 1) or Buy Component (Alternative 2) Make Buy Differential Component Component Effects (Alternative 1) (Alternative 2) (Alternative 2)
Q: Swifty Department Store uses a perpetual inventory system. Data for product E2-D2 include the…
A: The inventory can be valued using various methods as FIFO, LIFO and average method. Using FIFO…
Q: How are credit balances in accounts receivable reported on the financial statements?
A: Sales is the revenue being earned by the business on delivery of goods and services by the business.…
Q: 6 The financial year of Sweet and Cheap Trading ends on 31 October. The following balances were…
A: “Since you have posted a question with multiple sub-parts, we will solve the first three subparts…
Q: Compute for the benefit ratio of the following projects. Project cost Gross income Operating cost…
A: Introduction: The benefit-cost ratio (BCR) is a financial or qualitative indicator that depicts the…
Q: Nash SA uses a calendar year for financial reporting. The company is authorized to Issue 8,850,000…
A: calculation of weighted average ordinary share used in computing earnings per share for 2022 on the…
Q: Beginning inventory, purchases, and sales for Item XJ-56 are as follows: May 1 Beginning…
A: Introduction: Ending inventory is the worth of products still available for purchase and held by a…
Q: Sales revenue for Carbon Company is $580,000. Required: a. Prepare a traditional income…
A:
Q: Bierce Corporation has two manufacturing departments--Machining and Finishing. The company used the…
A: “Since you have posted a question with multiple sub-parts, we will solve three sub-parts d to f for…
Q: 59 units at $81 48 units 33 units at $84 17 units 18 units 27 units at $88 The business maintains a…
A: FIFO Method - Under FIFO method of Inventory valuation Company used or sell inventory that was…
Q: Assume the following information (the quantity of materials purchased = the quantity used):…
A: Variances are difference between actual cost and standard cost. If actual cost is higher than…
Q: Required information Problem 9-2A (Algo) Allocation of indirect expenses to departments LO P2 [The…
A: The manufacturing overhead costs include indirect costs such as factory rent, insurance,…
Q: Assume the following information appears in the standard cost card for a company that makes only one…
A: Material Price Variance :— It is the difference between actual quantity of material at standard…
Q: Requirements 1. Journalise the following transactions: a. Purchase of the goods on 8…
A: Perpetual System of Inventory is one of the method of Inventory Keeping. Under this system,…
Q: Required: 1. Identify reasons for entries (a) through (d). 2. Assume that the underapplied or…
A: 1) Identify reasons a Actual manufacturing overhead for the year b Applied manufacturing…
Q: These are small question , please answer all otherwise skip it Q1. What is the CM for 'Room'…
A: The contribution margin would be defined as the gap between the firm's sale price and variable…
Q: Independence, Due care, and Technical training and proficiency which of these 3 standards do you…
A: Generally Accepted Auditing Standards (GAAS) are Standards in Auditing which are globally practiced…
Q: Use the following information to calculate the cost of goods manufactured during July. Work in…
A: The cost of goods manufactured is the direct cost incurred to manufacture the product. It includes…
Q: When is Leasing used?
A: Fixed assets are those type of assets which are being held by the business for longer period of…
Q: In 2020 the budget for a machine shop showed overheads of $60,000 and volume of activity of 12,000…
A: Overheads are the all type of indirect costs and expenses being incurred. These costs can not be…
Q: 2020 January 1 January 3 January 4 January 5 January 7 January 10 January 11 January 12 January 18…
A: Introduction: A journal is the team's corporate book in which all transactions are recorded in…
Q: From the following balances of Maryam Plc., as at 31.12.18 a) Income statement b) Statement of…
A: Financial Statement - The company prepares usually three main financial statements every year. Those…
Q: Sept. Dec. 30 31 31 9.2%. Received interest on the Trust bond. Received interest on the Hanna and…
A: Bonds are a financing tool. This is a loan. Company issue bonds to get money and people invest money…
Q: How does activity-based costing differ from traditional costing systems? Can you please create a…
A: The costing systems are the system which are used by the companies to identify the cost incurred in…
Q: Journalized the transactions and prepare a ledger of each account
A: Journal entries recording is the first step in accounting cycle process, under which atleast one…
Q: The following table includes quarterly working capital levels for your firm for the next year.…
A: Wokriing capital :— Working capital is a financial metric which represents operating liquidity…
Q: Which of the following conditions would not indicate that two business segments should be classified…
A: Operating segments are the business components of an entity which earns revenue and incur expenses.…
Q: On December 29, 2009, Bay Company was registered at the Securities and Exchange Commission with…
A: Shareholders equity is the total amount attributable to the shareholders of the company. It includes…
Q: On December 31, 2020, Parent company (A) acquired 80% of Subsidiary (B) outstanding common stocks…
A: Journal entry: The first step in accounting is a journal entry, which is used to record a business…
Q: The total stockholders' equity of Honest Corporation is P748,125 on December 31, 2020, with total…
A: Book value per share is different from the par value of share. It includes the value of retained…
Q: QUESTION 9 Natalie owns a condominium near Cocoa Beach in Florida. This year, she incurs the…
A: Solution:- Given, Natalie Owns a condominium near Cocoa Beach in Florida. Natalie rented out the…
Q: State two objectives of budgetary planning and control systems
A: “Since you have asked multiple question, we will solve the first question for you. you want any…
Q: 11. Stanley invests $500 into an account that earns 9%p.a. compounding monthly. At the start of each…
A: Stanley Invests $500 into the account The compounding Interest rate is 9% Start of each new month,…
Q: QMW Company manufactures two models of microcassette recorders, VCH and MTV. Based on the following…
A: Introduction: The production budget, which is derived from a mixture of the sales forecast and the…
Q: . Prepare a schedule of cost of goods manufactured. b. Was the overhead underapplied or…
A:
Q: Assume that a company has two cost drivers—number of textbooks and number of instructors. The…
A: Spending Variance :— It is difference between flexible budget cost and actual cost. Flexible…
Q: A company has the following information: The production budget for the six-month period to 30…
A: Trade payables is one of the current liability of the business which is related with purchase of…
Q: Best Shingle's budgeted manufacturing costs for 50,000 squares of shingles are: Fixed manufacturing…
A: Variable Manufacturing Cost :— Variable Manufacturing Cost Vary per unit Basis. It is the one of the…
Q: Premium, Inc. produced 1.000 units of the company's product in 2018. The standard quantity of direct…
A: Standard costing helps managers in 1.reducing accounting costs. 2.Helps in identifying performance…
Q: The following information is available for Oriole Company for the year ended December 31, 2022.…
A: Cash Flow Statement is prepared to analysis, measure and interpret the cash inflows and cash…
Q: Pina Furniture Ltd. uses a perpetual inventory system and has a beginning inventory, as at June 1,…
A: The cost of goods sold refers to the cost of making the number of goods sold by an entity. But, it…
Q: A company's outstanding stock consists of 1,700 shares of cumulative 5% preferred stock with a $100…
A: Out of the profit earned by the business organizations, some of their profit is distributed to the…
Q: The following budgeted profit statement has been prepared using absorption costing principles. A…
A: Variable costs are those costs which changes along with change in activity level. Fixed costs are…
Q: Jan. 2 Sarasota sold $39,000 of goods to Xtra Inc., terms n/45, FOB destination. The cost of the…
A: Introduction: The journal entries are recorded in a journal in date order after being registered to…
Q: Net loss ($28,500) All variable expenses vary with the number of units sold, except for sales…
A: Income Statement :— Income statement of the company provide the wealth of the Company. An income…
Q: An NFP organization receives supplies from a donor. At what amount is the donation reported in…
A: A NPF stands for non profit organisation. It runs for the betterment of society rather than earning…
Q: Question 3 of 10 Consider the following income statement data for Oriole Inc.: Sales revenue Less:…
A: Common size analysis is one of the financial statement analysis in which each item is shown as…
Q: Calculate net cash provided by operating activities for CQ Photography using the indirect method.…
A: Operating Activities are the Main activities of the Business, by which major revenue is earned by…
Q: PSMO Company currently uses normal costing method in accumulating the cost of production. The…
A: Manufacturing Cost :— It is the sum of direct material used , direct labour costs & applied…
Q: What is the correct process for determining depreciation expense for partial periods? A: The…
A: Lets understand the basics. Depreciation is a reduction in value of asset due to wear and tear,…
Q: XYZ Company has two divisions, A and B. Information for each division is as follows: Net earnings…
A: Introduction: Sales are the number of goods and services sold by a company during a given reporting…
Please help me to solve this problem
Step by step
Solved in 2 steps with 1 images
- Salem Electronics currently produces two products: a programmable calculator and a tape recorder. A recent marketing study indicated that consumers would react favorably to a radio with the Salem brand name. Owner Kenneth Booth was interested in the possibility. Before any commitment was made, however, Kenneth wanted to know what the incremental fixed costs would be and how many radios must be sold to cover these costs. In response, Betty Johnson, the marketing manager, gathered data for the current products to help in projecting overhead costs for the new product. The overhead costs based on 30,000 direct labor hours follow. (The high-low method using direct labor hours as the independent variable was used to determine the fixed and variable costs.) All depreciation. The following activity data were also gathered: Betty was told that a plantwide overhead rate was used to assign overhead costs based on direct labor hours. She was also informed by engineering that if 20,000 radios were produced and sold (her projection based on her marketing study), they would have the same activity data as the recorders (use the same direct labor hours, machine hours, setups, and so on). Engineering also provided the following additional estimates for the proposed product line: Upon receiving these estimates, Betty did some quick calculations and became quite excited. With a selling price of 26 and just 18,000 of additional fixed costs, only 4,500 units had to be sold to break even. Since Betty was confident that 20,000 units could be sold, she was prepared to strongly recommend the new product line. Required: 1. Reproduce Bettys break-even calculation using conventional cost assignments. How much additional profit would be expected under this scenario, assuming that 20,000 radios are sold? 2. Use an activity-based costing approach, and calculate the break-even point and the incremental profit that would be earned on sales of 20,000 units. 3. Explain why the CVP analysis done in Requirement 2 is more accurate than the analysis done in Requirement 1. What recommendation would you make?A company is considering a special order for 1,000 units to be priced at 8.90 (the normal price would be 11.50). The order would require specialized materials costing 4.00 per unit. Direct labor and variable factory overhead would cost 2.15 per unit. Fixed factory overhead is 1.20 per unit. However, the company has excess capacity, and acceptance of the order would not raise total fixed factory overhead. The warehouse, however, would have to add capacity costing 1,300. Which of the following is relevant to the special order? a. 11.50 b. 1.20 c. 7.35 d. 8.90Boston Executive. Inc., produces executive limousines and currently manufactures the mini-bar inset at these costs: The company received an offer from Elite Mini-Bars to produce the insets for $2,100 per Unit and supply 1,000 mini-bars for the coming years estimated production. If the company accepts this offer and shuts down production of this part of the business, production workers and supervisors will be reassigned to other areas. Assume that for the short-term decision-making process demonstrated in this problem, the companys total labor costs (direct labor and supervisor salaries) will remain the same if the bar inserts are purchased. The specialized equipment cannot be used and has no market value. However, the space occupied by the mini bar production can be used by a different production group that will lease it for $55,000 per year. Should the company make or buy the mini-bar insert?
- 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?Almond Treats manufactures various types of cereals that feature almonds. Acme Cereal Company has approached Almond Treats with a proposal to sell the company its top selling cereal at a price of $22,000 for 20,000 pounds. The costs shown are associated with production of 20,000 pounds of almond cereal: The manufacturing overhead consists of $2,000 of variable costs with the balance being allocated to fixed costs. Should Almond Treats make or buy the almond cereal?Regal Executive, Inc., produces executive motor coaches and currently manufactures the cent awnings that accompany them at these costs: The company received an offer from Saied Tents to produce the awnings for $3,200 per unit and supply 1,000 awnings for the coming years estimated production. If the company accepts this offer and shuts down production of this part of the business, production workers and supervisors will be reassigned to other areas. Assume that for the short-term decision-making process demonstrated in this problem, the companys total labor costs (direct labor and supervisor salaries) will remain the same if the bar inserts are purchased. The specialized equipment cannot be used and has no market value. However, the space occupied by the awning production can be used by a different production group that will lease it for $60,000 per year. Should the company make or buy the awnings?
- Morrill Company produces two different types of gauges: a density gauge and a thickness gauge. The segmented income statement for a typical quarter follows. Includes depreciation. The density gauge uses a subassembly that is purchased from an external supplier for 25 per unit. Each quarter, 2,000 subassemblies are purchased. All units produced are sold, and there are no ending inventories of subassemblies. Morrill is considering making the subassembly rather than buying it. Unit-level variable manufacturing costs are as follows: No significant non-unit-level costs are incurred. Morrill is considering two alternatives to supply the productive capacity for the subassembly. 1. Lease the needed space and equipment at a cost of 27,000 per quarter for the space and 10,000 per quarter for a supervisor. There are no other fixed expenses. 2. Drop the thickness gauge. The equipment could be adapted with virtually no cost and the existing space utilized to produce the subassembly. The direct fixed expenses, including supervision, would be 38,000, 8,000 of which is depreciation on equipment. If the thickness gauge is dropped, sales of the density gauge will not be affected. Required: 1. Should Morrill Company make or buy the subassembly? If it makes the subassembly, which alternative should be chosen? Explain and provide supporting computations. 2. Suppose that dropping the thickness gauge will decrease sales of the density gauge by 10 percent. What effect does this have on the decision? 3. Assume that dropping the thickness gauge decreases sales of the density gauge by 10 percent and that 2,800 subassemblies are required per quarter. As before, assume that there are no ending inventories of subassemblies and that all units produced are sold. Assume also that the per-unit sales price and variable costs are the same as in Requirement 1. Include the leasing alternative in your consideration. Now, what is the correct decision?Lockrite Security Company manufacturers home alarms. Currently, it is manufacturing one of its components at a total cost of $40, which includes fixed costs of $13 per unit. An outside provider of this component has offered to sell Lockrite the component for $29. Provide a differential analysis of the outside purchase proposal. If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Make Component (Alternative 1) or Buy Component (Alternative 2) MakeComponent(Alternative 1) BuyComponent(Alternative 2) DifferentialEffects(Alternative 2) Unit costs: Purchase price Variable costs Fixed costs Total unit costs $Assume that HASF furniture Inc., as described, currently purchases the chair cushions for its lawn set from an outside vendor for $15 per set. Modern Furniture’s chief operations officer wants an analysis of the comparative costs of manufacturing these cushions to determine whether bringing the manufacturing in-house would save the firm money. Additional information shows that if Modern furniture’s were to manufacture the cushions, the materials cost would be $6 and the labor cost would be $4 per set and that it would have to purchase cutting and sewing equipment, which would add $10,000 to annual fixed costs. Calculate Amount company will save if company make 10,000 cushions What amount should have been inccrued if company purchase the units what amount should have been inccrued if company produce the units
- Paradise Manufacturing currently makes one of its parts for a total cost of $3.80 per unit. This cost is based on a normal capacity of 60,000 units. Variable cost are $2.50 per unit. Fixed cost related to making this part is $30,000. Allocated fixed cost are unavoidable and amount to $30,000. Paradise Manufacturing is considering buying the part for $2.80 per unit. Should the company continue making the part or should they buy the part from the outside supplier? Give a numerical justification for your answer.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?A toaster is manufactured at a variable cost of $17 per unit, fixed costs of $8 per unit, and variable selling costs of $3 per unit, and normally sells at $40 per unit. The company receives a special-order request for 5,000 units and is willing to pay a price of $25 per unit. It will take an additional $2 per unit for special packaging of the product. Would you accept or reject the special order? Show your calculations, would accepting the order increase or decrease your net income? What other two factors will influence your decision.