Selling price $215 $230 Direct materials (pounds) 23,000 25,000 Direct materials costs per pound $30 $32 Manufacturing capacity for CM5 (units) 11,000 11,000 Conversion costs (fixed costs) $770,000 $803,000 Conversion costs per unit of capacity $70 $73 Manufacturing conversion costs in each year depend on production capacity defined in terms of CM5 units that can be produced. Required: What is the net effect on operating income as a result of the growth component? $51,000 $116,800 $112,000 $166,000
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- Hatch Manufacturing produces multiple machine parts. The theoretical cycle time for one of its products is 65 minutes per unit. The budgeted conversion costs for the manufacturing cell dedicated to the product are 12,960,000 per year. The total labor minutes available are 1,440,000. During the year, the cell was able to produce 0.6 units of the product per hour. Suppose also that production incentives exist to minimize unit product costs. Required: 1. Compute the theoretical conversion cost per unit. 2. Compute the applied conversion cost per minute (the amount of conversion cost actually assigned to the product). 3. Discuss how this approach to assigning conversion cost can improve delivery time performance. Explain how conversion cost acts as a performance driver for on-time deliveries.Total costs are $180,000 when 10,000 units are produced of this amount variable costs are $64,000 what are the total costs one 14,000 units are produced assume the new quantity is within the relevant rangeCycle Time and Velocity Bemidii Theoretical velocity: 400 units per hour Productive minutes available per year: 5,000,000 Company has the following data for one of its production departments: Annual conversion costs: $120,000,000 Actual velocity: 240 units per hour Required: 1. Calculate the actual conversion cost per unit using actual cycle time and the standard cost per minute. Round your actual cycle time answer to three decimal places and round your cost per unit answer to the n Actual cycle time minutes per unit Standard cost per minute per minute Conversion cost per unit per unit 2. Calculate the ideal conversion cost per unit using theoretical cycle time and the standard cost per minute. If required, round your answers to two decimal places. Theoretical cycle time 0.15 minutes per unit Conversion cost per unit 0.9 X per unit What incentive exists for managers when cycle time costing is used? To reduce cycle time ✓ Actual cycle time Conversion cost per unit 0.25 24 6 3. What if…
- Cycle Time and Velocity Norton Company has the following data for one of its production departments: Theoretical velocity: 760 units per hour Productive minutes available per year: 32,000,000 Annual conversion costs: $192,000,000 Actual velocity: 304 units per hour Required: 1. Calculate the actual conversion cost per unit using actual cycle time and the standard cost per minute. Round your actual cycle time answer to three decimal places and your cost per unit answer to the nearest cent. Actual cycle time fill in the blank minutes per unit Standard cost per minute $fill in the blank per minute Conversion cost per unit $fill in the blank per unit 2. Calculate the ideal conversion cost per unit using theoretical cycle time and the standard cost per minute. If required, round your intermediate calculations and final answers to two decimal places. Theoretical cycle time fill in the blank minutes per unit Conversion cost per unit $fill in the blank per unitCycle Time and Velocity Norton Company has the following data for one of its production departments: Theoretical velocity: 650 units per hour Productive minutes available per year: 65,000,000 Annual conversion costs: $390,000,000 Actual velocity: 325 units per hour Required: 1. Calculate the actual conversion cost per unit using actual cycle time and the standard cost per minute. Round your actual cycle time answer to three decimal places and your cost per unit answer to the nearest cent. Actual cycle time fill in the blank 1 minutes per unit Standard cost per minute $fill in the blank 2 per minute Conversion cost per unit $fill in the blank 3 per unit 2. Calculate the ideal conversion cost per unit using theoretical cycle time and the standard cost per minute. If required, round your intermediate calculations and final answers to two decimal places. Theoretical cycle time fill in the blank 4 minutes per unit Conversion cost per unit $fill in the blank 5 per…The costs incurred in the manufacture of 75,000 units of a product are: Direct materials $80,000 Direct labour $15,000 Variable overheads $32,000 Fixed overheads $130,000 If output increases by 15%, what will be the effect, if any, on the variable cost per unit? Show solution
- Cycle Time and Velocity Bemidii Company has the following data for one of its production departments: Theoretical velocity: 620 units per hour Productive minutes available per year: 31,000,000 Annual conversion costs: $186,000,000 Actual velocity: 310 units per hour Required: 1. Calculate the actual conversion cost per unit using actual cycle time and the standard cost per minute. Round your actual cycle time answer to three decimal places and your cost per unit answer to the nearest cent. Actual cycle time Standard cost per minute Conversion cost per unit 2. Calculate the ideal conversion cost per unit using theoretical cycle time and the standard cost per minute. If required, round your intermediate calculations and final answers to two decimal places. Theoretical cycle time minutes per unit per unit Conversion cost per unit What incentive exists for managers when cycle time costing is used? minutes per unit $ per minute per unit 3. What if the actual velocity is 434 units per hour?…Units of concrete panels produced and sold Sellling price Direct Materials (volume of concrete) Direct Materials cost / each volume of concrete Manufacturing processing capcaity (volume of concrete) Conversion cost (all manufacturing cost except direct materials) Conversion cost per unit of capacity R&D employees R&D costs R&D cost per employee Market growth 2020 20,000 2,400 2,500,000 11.50 3,000,000 18,000,000 6.00 5 500,000 100,000 2021 22,000 2,200 2,300,000 12.00 2,900,000 17,000,000 5.86 4 400,000 100,000 10%A company has the following data for one of its manufacturing cells: Theoretical velocity 20 units per hour Productive minutes available per year 1,200,000 Annual conversion cost $4,800,000 Actual velocity 15 units per hour Actual cycle time = 60 minutes/15 units = 4 minutes per unitStandard cost per minute = $4 per minuteActual conversion cost per unit = $4 × 4 = $16 per unitTheoretical cycle time = 60 minutes/20 units = 3 units per hourTheoretical conversion cost per unit = $4 × 3 = $12 per unit What we can see from this example is that the company has an incentive to reduce cycle time. It actually takes 4 minutes per unit but it could take as little as 3 minutes per unit. If cycle time could be reduced, the number of units produced could be increased and conversion cost per unit could be decreased. If actual cycle time were decreased to 3.5 minutes per unit, actual velocity (rounded to the nearest whole unit) would be ________ units per hour, and actual conversion cost…
- Norton Company has the following data for one of its production departments: Theoretical velocity: 300 units per hour Productive minutes available per year: 10,000,000 Annual conversion costs: $60,000,000 Actual velocity: 160 units per hour Based on the above information, the cycle time will be: Select one: a. .475 minutes per unit b. .275 minutes per unit C. .175 minutes per unit d. .375 minutes per unitPorvide answer in table format Cobe Company has already manufactured 19,000 units of Product A at a cost of $25 per unit. The 19,000 units can be sold at this stage for $490,000. Alternatively, the units can be further processed at a $230,000 total additional cost and be converted into 5,500 units of Product B and 11,000 units of Product C. Per unit selling price for Product B is $107 and for Product C is $56. 1. Prepare an analysis that shows whether the 19,000 units of Product A should be processed further or not?Units of concrete panels produced and sold Sellling price Direct Materials (volume of concrete) Direct Materials cost / each volume of concrete Manufacturing processing capcaity (volume of concrete) Conversion cost (all manufacturing cost except direct materials) Conversion cost per unit of capacity R&D employees R&D costs R&D cost per employee Market growth 2020 20,000 2,400 2,500,000 11.50 400,000 18,000,000 45.00 5 200,000 40,000 What was the change in R&D cost from the productivity component? (100,000) F (100,000) U (40,000) F (40,000) U (30,000) F 2021 22,000 2,200 2,300,000 12.00 300,000 16,000,000 53.33 4 160,000 40,000 10%