Question 1 Corvine Corporation makes two types of motors for use in various products. Operating data and unit cost information for its products are presented next. Product A Product B Annual unit capacity 10,000 20,000 Annual unit demand 10,000 20.000 $100 Selling price Variable manufacturing cost Fixed manufacturing cost $80 53 45 10 10 Variable selling and administrative 10 11 Fixed selling and administrative 5 Fixed other administrative 4 2 Unit operating profit $20 $10 Machine hours per unit 2.0 1.5 Corvine has 40,000 productive hours available. Required Calculate the relevant contribution margin, per machine hour for each product, to be utilized in making a decision on product priorities for the coming year.
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- Production run size and activity improvement Littlejohn, Inc. manufactures machined parts for the automotive industry. The activity cost associated with Part XX-10 is as follows: Activity Activity-Base Usage Activity Rate = Activity Cost Fabrication 250 dlh 80per dlh 20,000 Setup 10 setups 80 per setup 800 Production control 10 prod, runs 30 per prod, run 300 Moving 10 moves 25 per move 250 Total activity cost per unit 21,350 Estimated units of production 500 Activity cost per unit 42.70 Each unit requires 30 minutes of fabrication direct labor. Moreover, part XX-10 is manufactured in production run sizes of 50 units. Each production run is set up, scheduled (production control), and moved as a batch of 50 units. Management is considering improvements in the setup, production control, and moving activities in order to cut the production run sizes by half. As a result, the number of setups, production runs, and mows will double from 10 to 20. Such improvements are expected to speed the companys ability to respond to customer orders. Setup is reengineered so that it takes 60% of the original cost per setup. Production control software will allow production control effort and cost per production run to decline by 60%. Moving distance was reduced by 40%, thus reducing the cost per mow by the same amount. A. Determine the revised activity cost per unit under the proposed changes. B. Did these improvements reduce the activity cost per unit? C. What cost per unit for setup would be required for the solution in (A) to equal the base solution?Hart Manufacturing makes three products. Each product requires manufacturing operations in three departments: A, B, and C. The labor-hour requirements, by department, are as follows: During the next production period the labor-hours available are 450 in department A, 350 in department B, and 50 in department C. The profit contributions per unit are 25 for product 1, 28 for product 2, and 30 for product 3. a. Formulate a linear programming model for maximizing total profit contribution. b. Solve the linear program formulated in part (a). How much of each product should be produced, and what is the projected total profit contribution? c. After evaluating the solution obtained in part (b), one of the production supervisors noted that production setup costs had not been taken into account. She noted that setup costs are 400 for product 1, 550 for product 2, and 600 for product 3. If the solution developed in part (b) is to be used, what is the total profit contribution after taking into account the setup costs? d. Management realized that the optimal product mix, taking setup costs into account, might be different from the one recommended in part (b). Formulate a mixed-integer linear program that takes setup costs provided in part (c) into account. Management also stated that we should not consider making more than 175 units of product 1, 150 units of product 2, or 140 units of product 3. e. Solve the mixed-integer linear program formulated in part (d). How much of each product should be produced and what is the projected total profit contribution? Compare this profit contribution to that obtained in part (c).Question 2: How much of each product should be produced to maximize net operating income? Holton Company makes three products in a single facility. Data concerning these products follow: Product A Product B Product C Selling Price per Unit $95.80 74.90 113.40 Direct Materials $41.80 $41.80 $68.20 Direct Labor $30.10 $13.40 $17.20 Variable Manufacturing Overhead $5.80 $4.50 $8.00 Variable Selling Cost per Unit $7.70 $3.20 $4.90 Mixing Minutes per Unit 13.70 3.00 2.00 Monthly Demand in Units 3,000 1,000 2,000
- Question content area top Part 1 Red Rose Manufacturers Inc. is approached by a potential customer to fulfill a onetimeonly special order for a product similar to one offered to domestic customers. The company has excess capacity. The following per unit data apply for sales to regular customers: Variable costs: Direct materials $120 Direct labor 100 Manufacturing support 115 Marketing costs 85 Fixed costs: Manufacturing support 155 Marketing costs 55 Total costs 630 Markup (40%) 252 Targeted selling price $882 What is the full cost of the product per unit? A. $420 B. $252 C. $882 D. $630Question No. 4: Production under Constrained Resources Glover Company makes three products in a single facility. These products have the following unit product costs:ProductABCDirect materials$35.10$51.60$58.00Direct labor22.5025.1015.90Variable manufacturing overhead2.301.701.60Fixed manufacturing overhead12.207.808.40Unit product cost$72.10$86.20$83.90Additional data concerning these products are listed below.ProductABCMixing minutes per unit1.300.800.20Selling price per unit$81.00$103.40$96.90Variable selling cost per unit$2.90$3.40$3.20Monthly demand in units310044002400The mixing machines are potentially the constraint in the production facility. A total of 7930 minutes are available per month on these machines. Direct labor is a variable cost in this company.Required : a. How many minutes of mixing machine time be required to satisfy demand for all three products?b. How much of each product should be produced to maximize net operating income?ABCOptimal productionc. Up to how much…Question Q1Moona Inc. produces Mobile phones. Information of the company's operations last year appear below: Fixed cost:Fixed Manufacturing overhead Rs 40,000Fixed Selling & Administrative Rs 60,000Selling Price per unit Rs 100Variable cost per unit:Direct Materials Rs 30Direct labor Rs 10Variable Manufacturing overhead Rs 5Variable Selling & Administrative Rs 2Units In beginning Inventory 0Units Produced 2000Units Sold 1900 Required: a. Compute the unit product cost under both absorption and variable costing.b. Prepare an income statement for the year using absorption costing.c. Prepare a contribution format income statement for the year using variable costing. d. Prepare a report reconciling the difference in net operating income between absorption and variable costing for the year.
- (e) Product Blue Product Red Selling $12.00 $24.00Variable cost $4.00 $8.00Contribution margin $8.00 $16.00Fixed costs apportioned $200,000 $400,00Budgeted Sales Units 140,000 60,000 Calculate the breakeven points, for each product and the company as a whole and comment on your findings f)Discuss the merits and demerits of the cost volume profit analysis (CVP)Subject: Cost management & accounting MCQs: 1) Grover Company has the following data for the production and sale of 2,000 units. Sales price per unit $ 800 per unitFixed costs: Marketing and administrative $ 400,000 per periodManufacturing overhead $ 200,000 per periodVariable costs: Marketing and administrative $ 50 per unitManufacturing overhead $ 80 per unitDirect labor $ 100 per unitDirect materials $ 200 per unitWhat is the total manufacturing cost per unit? a) $380 b) $480 c) $730 d) $430 2) Vegas Company has the following unit costs: Variable manufacturing overhead $ 25 Direct materials 20 Direct labor 19 Fixed manufacturing overhead 12 Variable marketing and administrative 7 Vegas produced and sold 10,000 units. If the product sells for $100, what is the gross margin?…B. Find the cost of a product Different costs are presented below Direct materials $ 5.00 per unit Indirect materials $ 2.00 per unit Direct labor $ 10.00 per hour Indirect labor $ 3.00 per hour Other variable indirect costs $ 6.00 per hour Other fixed indirect costs $ 10.00 per unit Commissions to sellers $ 4.00 per unit Variable administrative costs $ 6.00 per unit Fixed Administrative Costs $ 10.00 per unit 2. Determine the Sales Price if the company expects to earn 140% on cost (Markup of 140 on cost). .
- (e) Product Blue Product Red £ £Selling £12.00 £24.00Variable cost £ 4.00 £ 8.00Contribution margin £ 8.00 £16.00Fixed costs apportioned £200,000 £400,000Budgeted Sales Units 140,000 60,000Required:Calculate the breakeven points, for each product and the company as a wholeand comment on your findingsQuestion Content Area Moon Company uses the variable cost method of applying the cost-plus approach to product pricing. The costs and expenses of producing and selling 75,000 units of Product T are as follows: Variable costs per unit: Direct materials $ 7.00 Direct labor 3.50 Factory overhead 1.50 Selling and administrative expenses 3.00 Total $15.00 Fixed costs: Line Item Description Amount Factory overhead $45,000 Selling and administrative expenses 20,000 Moon desires a profit equal to an 18% return on invested assets of $1,440,000. c. Determine the markup percentage for Product T. Round your answer to one decimal place.fill in the blank 1 of 1%Question Content Area Moon Company uses the variable cost method of applying the cost-plus approach to product pricing. The costs and expenses of producing and selling 75,000 units of Product T are as follows: Variable costs per unit: Direct materials $ 7.00 Direct labor 3.50 Factory overhead 1.50 Selling and administrative expenses 3.00 Total $15.00 Fixed costs: Line Item Description Amount Factory overhead $45,000 Selling and administrative expenses 20,000 Moon desires a profit equal to an 18% return on invested assets of $1,440,000. a. Determine the amount of desired profit from the production and sale of Product T.fill in the blank 1 of 1$ b. Determine the total variable costs for the production and sale of 75,000 units of Product T.fill in the blank 1 of 1$ c. Determine the markup percentage for Product T. Round your answer to one decimal place.fill in the blank 1 of 1% d. Determine the unit selling price of Product T. Round…