Mimi's Fixtures manufactures kitchen tiles in one plant, which has a practical capacity of 30,000 tiles. The variable cost of the tile is $18.00 per unit, and the fixed costs of the plant are $600,000 annually. Current annual demand is 25,000 tiles. Mimi bought the current plant because she expected that demand for the tiles would grow once her reputation was established. Required: a. What cost per tile should the cost system report? b. What is the cost of excess capacity? c. How would your answers to requirements (a) and (b) change if the smallest tile manufacturing plant that one could build (owing to technology) was able to produce 30,000 tiles? Complete this question by entering your answers in the tabs below. Required A Required B Required C What cost per tile should the cost system report? Cost per tile Required A Required B >
Mimi's Fixtures manufactures kitchen tiles in one plant, which has a practical capacity of 30,000 tiles. The variable cost of the tile is $18.00 per unit, and the fixed costs of the plant are $600,000 annually. Current annual demand is 25,000 tiles. Mimi bought the current plant because she expected that demand for the tiles would grow once her reputation was established. Required: a. What cost per tile should the cost system report? b. What is the cost of excess capacity? c. How would your answers to requirements (a) and (b) change if the smallest tile manufacturing plant that one could build (owing to technology) was able to produce 30,000 tiles? Complete this question by entering your answers in the tabs below. Required A Required B Required C What cost per tile should the cost system report? Cost per tile Required A Required B >
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter13: The Balanced Scorecard: Strategic-based Control
Section: Chapter Questions
Problem 24P: Lander Parts, Inc., produces various automobile parts. In one plant, Lander has a manufacturing cell...
Related questions
Question
Hello question is attached, thanks.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Step 1 Introduction
VIEWStep 2 a) Statement showing cost per tile as per cost system report
VIEWStep 3 a. Answer
VIEWStep 4 b) Statement showing the cost of excess capacity
VIEWStep 5 b. Answer
VIEWStep 6 c).1 Statement showing cost per tile when capacity is changed now 30,000 tiles
VIEWStep 7 C.1 Answer
VIEWStep 8 C.) 2. Statement showing the cost of excess capacity when capacity is to be changed
VIEWStep 9 C.) 2 Answer
VIEWStep 10 Working note
VIEWTrending now
This is a popular solution!
Step by step
Solved in 10 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Essentials of Business Analytics (MindTap Course …
Statistics
ISBN:
9781305627734
Author:
Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:
Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub