Problem 5 A company manufactures product A, B and C. The actual joint expenses of manufacture for a period were RO 63,000. It was estimated that profits on each product as a percentage of sales would be 30%, 25% and 15% respectively. Subsequent expenses were: A в Material RO 1000 RO 750 RO 250 Direct wages RO 2000 RO 1250 RO 500 Overheads RO 1500 RO 1250 RO 750 Total RO 4500 RO 3250 RO 1500 Sales RO 60,000 RO 40,000 RO 25,000

Problem 5 A company manufactures product A, B and C. The actual joint expenses of manufacture for a period were RO 63,000. It was estimated that profits on each product as a percentage of sales would be 30%, 25% and 15% respectively. Subsequent expenses were: A в Material RO 1000 RO 750 RO 250 Direct wages RO 2000 RO 1250 RO 500 Overheads RO 1500 RO 1250 RO 750 Total RO 4500 RO 3250 RO 1500 Sales RO 60,000 RO 40,000 RO 25,000

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter3: Cost Behavior

Section: Chapter Questions

Problem 26E: Starling Co. manufactures one product with a selling price of 18 and variable cost of 12. Starlings...

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Division A of Kern Co. has sales of $350,000, cost of goods sold of $200,000, operating expenses of $30,000, and invested assets of $600000. What is the return on investment for Division A? A. 20% B. 25% C. 33% D. 40%
5) A production company with an annual normal production capacity of 4,800 units/year calculates its costs according to the normal cost method. The enterprise has actually produced 300 units/month in April 2021. The production costs of the enterprise for the period of April 2021 were realized as follows, according to the full cost method.Direct Raw Material and Material Expenses(D) 3.000.-₺Direct Labor Costs(D) 2.700.-₺General Production Expenses(D) 2.400.-₺General Production Expenses (S) 2.000.-₺Required: Business:a) Calculate the “Unit Cost of Goods Produced” for the period of April 2021.b) If the "Actual Production Amount" for the period of April 2021 was 340 units/month (assuming that other data remain constant and unchanged), calculate the "Unit Cost of Goods Produced". A. a) 32.88.-₺/br ; b) 32.00.-₺/brB. a) 33,66.-₺/br ; b) 29,70.-₺/brC. a) 32.00.-₺/br ; b) 32.00.-₺/brD. a) 32.00.-₺/br ; b) 32.88.-₺/brE. a) 32.00.-₺/br ; b) 28,82.-₺/brF. a) 27,41.-₺/br ; b) 24,24.-₺/br
Question iii) Han products manufacturing 40,000 units of part S-9 each year for use of its production line. A this level of activity, the cost per unit for part S-9 is given as follows : DM - $4.60; DL - $12; VMOH $3.60; FMOH $6. An outside supplier has offered to sell 40,000 units of part S-9 each year to Han products for $25 per part. If Han products accepts this offer, the facilities now being used to manufacturing part S-9 could be rented to another company at an annual rental of $80,000. However. Han products has determined that 2/3 of FMOH being applied to part S-9 would continue even if part S-9 were purchased from the outside supplier. Requirement: iii1. Calculate how much profit will increase/decrease if the outside supplier’s offer is accepted.
Problem 6 Lucille Inc manufactures a product that gives rise to a by-product called “Robon”. The only cost associated with Robon are additional processing cost of P1.00 for each unit. Lucille accounts for Robon sales first by deducting its separable costs from such sales and then by deducting this net amount from the cost of sales of the major product. For the past year, 2,000 units of Robon were produced which were sold for P3.00 each. Sales revenue and cost of goods sold from the main product were P500,000 and P400,000 respectively. If Lucille changes its method of accounting for Roblon sales by showing the net amount as “other income”, the effect on gross margin would be (increase of decrease of what amount?)
Problem 6 Lucille Inc manufactures a product that gives rise to a by-product called “Robon”. The only cost associated with Robon are additional processing cost of P1.00 for each unit. Lucille accounts for Robon sales first by deducting its separable costs from such sales and then by deducting this net amount from the cost of sales of the major product. For the past year, 2,000 units of Robon were produced which were sold for P3.00 each. Sales revenue and cost of goods sold from the main product were P500,000 and P400,000 respectively. The gross margin after considering the by-product sales and costs would be
X Ltd. manufactures product A which yields two by-products B and C. In a period the amount spent up to the point of separation was OMR 20,600. Subsequent expenses were: Materials (in OMR) A: 300 B: 200 C: 150 Direct Wages (in OMR) A: 400 B: 300 C: 200 Overhead (in OMR) A: 300 B: 270 C: 280 Gross sales value of product A, B and C was RO 15,000, RO 10,000 and RO 5,000 respectively. It was estimated that the net profit as a percentage of sales in B and C would be 25% and 20% respectively. Ascertain the profit earned on A.
Question 6. Solex Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $100,000 per year. The company allocates these costs to the joint products on the basis of their total sales value at the split-off point. These sales values are as follows: product X, $50,000; product Y, $90,000; and product Z, $60,000. Each product may be sold at the split-off point or processed further. Additional processing requires no special facilities. The additional processing costs and the sales value after further processing for each product (on an annual basis) are shown below: Product X Y . Z Required: Additional Processing Costs $35,000 $40,000 $12,000 Sales Value after Further Processing $80,000 $150,000 $75,000 Which product or products should be sold at the split-off point, and which product or products should be processed further? Show computations.
3- A company, to manufacture 1,000 monthly units of a certain product, makes the following expenses: direct raw material: R$80,000.00; direct labor: $30,000.00; indirect labor: R$45,000.00 and other fixed costs: R$55,000.00. Assuming that direct raw material and direct labor are variable costs and indirect labor is fixed, the unit cost for the company to produce 2500 units is: *a) R$ 150.00b) R$ 144.00c) R$ 155.00d) R$ 160.00
Abbey, Brady, and Cali Companies Three new companies (Abbey, Brady, and Cali) began operations on January 1 of the current year. Consider the following operating costs that were incurred by these companies during the complete calendar year: Abbey Company Brady Company Cali Company Production in units 10,000 10,000 10,000 Sales price per unit $10 $10 $10 Fixed production costs $10,000 $20,000 $30,000 Variable production costs $30,000 $20,000 $10,000 Variable SG&A $1/unit $2/unit $3/unit Fixed SG&A $30,000 $20,000 $10,000 Refer to Abbey, Brady, and Cali Companies. Based on sales of 10,000 units, which company will report the greater income before income taxes if variable costing is used? Select one: a. All of the companies will report the same income before income taxes. b. Abbey Company c. Brady Company d. Cali Company
Accounting Question 7 KLP Products Co. produces 2 joint products. Joint cost = $2,000. These products can be processed further after split – off point. Data for the current period are: Products Sales value At split - off Separable costs Final Sales value after further Processing D $1,000 $2,000 $3, 800 E $200 $600 $700 Required: Determine which product KLP Co. should sell at the split-off point and which product KLP Co. should process further.
Question 24 Bongani Limited manufactures a product that sells for R120. He manufactured and sold 12 500 units during the previous month. The following additional information, for this activity level, is available: Total direct material cost R281 250 Direct labour cost per hour R12 Direct labour hours needed per product 1 ½ Total variable manufacturing overheads R122 500 Sales commission (of the selling price) 2 ½ % Total fixed manufacturing overheads R360 000 Other fixed costs in total R420 000 Do the following calculations, according to the instructions given: Required: The workers at Bongani’s plant threaten to strike if they do not receive a pay increase of 10%. The sales people want a commission of 3%. The only supplier of the direct material has increased its price by 5% per unit. All other…
12 - 13 Johnson Company makes two products: Carpet Kleen and Floor Deodorizer. Operating information from the previous year follows.Carpet Kleen Floor DeodorizerUnits produced and sold 5,000 4,000Machine hours used 5,000 2,000Sales price per unit P7 P10Variable cost per unit P4 P8Fixed costs of P20,000 per year are presently allocated equally between both products. If the product mix were to change, total fixed costs would remain the same. 12. The contribution margin per machine hour for Floor Deodorizer is: A. P0.25. B. P2.00. C. P4.00. D. P5.00. 13. Assuming there is unlimited demand for both products and Johnson has 10,000 machine hours available, how many units of each product should be produced and sold?Carpet Kleen Floor DeodorizerA. 0 units 0 units B. 0 units 20,000 units C. 5,000 units 10,000 units D. 8,000 units 4,000 units