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Portal Corporation produces the same power genera- tor in two Illinois plants, a new plant in Peoria and an older plant in Moline. The following data are available for the two plants: Page Layout Formulas Data Review Home Insert View D. A Peoria $150.00 Moline 2 Selling price 3 Variable manufacturing cost per unit 4 Fixed manufacturing cost per unit 5 Variable marketing and distribution cost per unit 6 Fixed marketing and distribution cost per unit 7 Total cost per unit 8 Operating income per unit 9 Production rate per day 10 Normal annual capacity usage 11 Maximum annual capacity $150.00 $72.00 30.00 $88.00 15.00 14.00 14.00 19.00 14.50 135.00 131.50 $ 15.00 400 units 240 days 300 days $ 18.50 320 units 240 days 300 days All fixed costs per unit are calculated based on a normal capacity usage consisting of 240 working days. When the number of working days exceeds 240, overtime charges raise the variable manufacturing costs of additional units by $3.00 per unit in Peoria and $8.00 per unit in Moline. Portal Corporation is expected to produce and sell 192,000 power generators during the coming year. Wanting to take advantage of the higher operating income per unit at Moline, the company's production manager has decided to manufacture 96,000 units at each plant, resulting in a plan in which Moline op- erates at maximum capacity (320 units per day x 300 days) and Peoria operates at its normal volume (400 units per day x 240 days).

Portal Corporation produces the same power genera- tor in two Illinois plants, a new plant in Peoria and an older plant in Moline. The following data are available for the two plants: Page Layout Formulas Data Review Home Insert View D. A Peoria $150.00 Moline 2 Selling price 3 Variable manufacturing cost per unit 4 Fixed manufacturing cost per unit 5 Variable marketing and distribution cost per unit 6 Fixed marketing and distribution cost per unit 7 Total cost per unit 8 Operating income per unit 9 Production rate per day 10 Normal annual capacity usage 11 Maximum annual capacity $150.00 $72.00 30.00 $88.00 15.00 14.00 14.00 19.00 14.50 135.00 131.50 $ 15.00 400 units 240 days 300 days $ 18.50 320 units 240 days 300 days All fixed costs per unit are calculated based on a normal capacity usage consisting of 240 working days. When the number of working days exceeds 240, overtime charges raise the variable manufacturing costs of additional units by $3.00 per unit in Peoria and $8.00 per unit in Moline. Portal Corporation is expected to produce and sell 192,000 power generators during the coming year. Wanting to take advantage of the higher operating income per unit at Moline, the company's production manager has decided to manufacture 96,000 units at each plant, resulting in a plan in which Moline op- erates at maximum capacity (320 units per day x 300 days) and Peoria operates at its normal volume (400 units per day x 240 days).

Financial And Managerial Accounting
Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter21: Variable Costing For Management analysis
Section: Chapter Questions
Problem 12E: Galaxy Sports Inc. manufactures and sells two styles of All Terrain Vehicles (ATVs), the...
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1. Calculate the breakeven point in units for the Peoria plant and for the Moline plant.

2. Calculate the operating income that would result from the production manager’s plan to produce 96,000 units at each plant.

Portal Corporation produces the same power genera- tor in two Illinois plants, a new plant in Peoria and an older plant in Moline. The following data are available for the two plants: Page Layout Formulas Data Review Home Insert View D. A Peoria $150.00 Moline 2 Selling price 3 Variable manufacturing cost per unit 4 Fixed manufacturing cost per unit 5 Variable marketing and distribution cost per unit 6 Fixed marketing and distribution cost per unit 7 Total cost per unit 8 Operating income per unit 9 Production rate per day 10 Normal annual capacity usage 11 Maximum annual capacity $150.00 $72.00 30.00 $88.00 15.00 14.00 14.00 19.00 14.50 135.00 131.50 $ 15.00 400 units 240 days 300 days $ 18.50 320 units 240 days 300 days All fixed costs per unit are calculated based on a normal capacity usage consisting of 240 working days. When the number of working days exceeds 240, overtime charges raise the variable manufacturing costs of additional units by $3.00 per unit in Peoria and $8.00 per unit in Moline. Portal Corporation is expected to produce and sell 192,000 power generators during the coming year. Wanting to take advantage of the higher operating income per unit at Moline, the company's production manager has decided to manufacture 96,000 units at each plant, resulting in a plan in which Moline op- erates at maximum capacity (320 units per day x 300 days) and Peoria operates at its normal volume (400 units per day x 240 days).
Transcribed Image Text:Portal Corporation produces the same power genera- tor in two Illinois plants, a new plant in Peoria and an older plant in Moline. The following data are available for the two plants: Page Layout Formulas Data Review Home Insert View D. A Peoria $150.00 Moline 2 Selling price 3 Variable manufacturing cost per unit 4 Fixed manufacturing cost per unit 5 Variable marketing and distribution cost per unit 6 Fixed marketing and distribution cost per unit 7 Total cost per unit 8 Operating income per unit 9 Production rate per day 10 Normal annual capacity usage 11 Maximum annual capacity $150.00 $72.00 30.00 $88.00 15.00 14.00 14.00 19.00 14.50 135.00 131.50 $ 15.00 400 units 240 days 300 days $ 18.50 320 units 240 days 300 days All fixed costs per unit are calculated based on a normal capacity usage consisting of 240 working days. When the number of working days exceeds 240, overtime charges raise the variable manufacturing costs of additional units by $3.00 per unit in Peoria and $8.00 per unit in Moline. Portal Corporation is expected to produce and sell 192,000 power generators during the coming year. Wanting to take advantage of the higher operating income per unit at Moline, the company's production manager has decided to manufacture 96,000 units at each plant, resulting in a plan in which Moline op- erates at maximum capacity (320 units per day x 300 days) and Peoria operates at its normal volume (400 units per day x 240 days).
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