US-based Chilé Products Ltd. bottles and sells hot pepper sauce. In 2009,the company had expected to sell 60 000 bottles but actually bottled andsold 70 000 bottles.The standard direct materials cost for each bottle is $0.36 comprised of0.80 ounces at a cost of $0.45 per ounce.During 2009, 68 000 ounces of material were purchased out of which 52000 ounces were used at a cost of $0.32 per ounce.The direct materials usage variance for 2009 was:$4 200 U$450 U$1800 F$4 500 F

The direct material usage variance is difference between actual material being used and standard…

sed Chilé Products Ltd. bottles and sells hot pepper sauce. In 2009, mpany had expected to sell 60 000 bottles but actually bottled and O 000 bottles. andard direct materials cost for each bottle is $0.36 comprised of unces at a cost of $0.45 per ounce.

sed Chilé Products Ltd. bottles and sells hot pepper sauce. In 2009, mpany had expected to sell 60 000 bottles but actually bottled and O 000 bottles. andard direct materials cost for each bottle is $0.36 comprised of unces at a cost of $0.45 per ounce.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 6MC: Jansen Crafters has the capacity to produce 50,000 oak shelves per year and is currently selling...

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This year, Hassell Company will ship 4,000,000 pounds of chocolates to customers with total order-filling costs of 900,000. There are two types of customers: those who order 50,000 pound lots (small customers) and those who order 250,000 pound lots (large customers). Each customer category is responsible for buying 1,500,000 pounds. The selling price per pound is 2 per lb for the 50,000 pound lot and 3 per lb for the larger lots, due to differences in the type of chocolate. ABC would likely assign order-filling costs to the customer type as follows: a. 450,000, small; 450,000, large (using pounds as the driver) b. 360,000, small; 540,000, large (using revenue as the driver) c. 750,000, small; 150,000, large (using number of orders as the driver) d. 450,000, small; 450,000, large (using customer type as the driver)
Kaune Food Products Company manufactures canned mixed nuts with an average manufacturing cost of 52 per case (a case contains 24 cans of nuts). Kaune sold 150,000 cases last year to the following three classes of customer: The supermarkets require special labeling on each can costing 0.04 per can. They order through electronic data interchange (EDI), which costs Kaune about 61,000 annually in operating expenses and depreciation. Kaune delivers the nuts to the stores and stocks them on the shelves. This distribution costs 45,000 per year. The small grocers order in smaller lots that require special picking and packing in the factory; the special handling adds 25 to the cost of each case sold. Sales commissions to the independent jobbers who sell Kaune products to the grocers average 8 percent of sales. Bad debts expense amounts to 9 percent of sales. Convenience stores also require special handling that costs 30 per case. In addition, Kaune is required to co-pay advertising costs with the convenience stores at a cost of 15,000 per year. Frequent stops are made to each convenience store by Kaune delivery trucks at a cost of 30,000 per year. Required: 1. Calculate the total cost per case for each of the three customer classes. (Round unit costs to four significant digits.) 2. Using the costs from Requirement 1, calculate the profit per case per customer class. Does the cost analysis support the charging of different prices? Why or why not? 3. What if Kaune charged the average price per case to all customer classes? How would that affect the profit percentages?
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