the total costs if the manufacturer decides to use: The economical quantity method
Q: During the year, the ABC partnership’s operations generated a loss. The partnership agreement provid...
A: Partner A's net share = -P8,000 -P8,000 = P2,000 + P15,000 + Remaining balance -P8,000 = P17,000 +...
Q: Interest income on municipal governmental bonds $ 92,000 Depreciation claimed on the 2021 tax return...
A: Tax is an amount that is charged by the government from the individual and organization on the incom...
Q: Punongbayan and Araullo formed a partnership. The following were contributed by the partners and lia...
A: Total capital of the partnership = Total assets - Total liabilities
Q: Papaya Corporation has the following product information: Sales price $9.00per unit $5.00per unit Va...
A: Calculation of operating income when sale price is $9 CALCULATION PARTICULAR AMOUNT A ...
Q: ntiff was injured by medical malpractice and received a jury verdict of $500,000 ($200,000 for medic...
A: The collateral source rule refers to the rule which to decline in the sum of damages paid to the pla...
Q: Kip Bowman is owner and sole employee of KB Corporation. He pays himself a salary of $1,500 each wee...
A: Payroll- The payroll area designates a group of employees for whom the same payroll components are p...
Q: A furniture manufacturer has a unit cost of $100 on an end table and wishes to achieve a margin of 6...
A: Unit cost to manufacturer = $100 Required margin of manufacturer = 60% on selling price Required mar...
Q: %24 %24 %24 %24 %24 %24 %24 %24 %24 %24 %24 %24 %24 Emma received a $79,300 mortgage that is amortiz...
A: a. Size of payment = A = P(r(1+r)^n)/((1+r)^n-1) Where, A = Payment amount per month (Size of paymen...
Q: Elyssa’s Elegant Eveningwear (EEE) needs to ship fi nishedgoods from its manufacturing facility to i...
A: Transit time is the amount of time needed for transporting of inventory from one place to another pl...
Q: i. Define the term contract. ii. State the objectives of Contract costing Identify types of contract...
A: As per Bartleby policy, only the first three parts of the interlinked question are answered Contract...
Q: Karane Enterprises, a calender year manufacturer based in College Station, Texas, began business in ...
A: Under IRS, section 179 allows businesses to claim a deduction for expenses related to tangible asset...
Q: Job 456 manufactured 12,000 units that were completed in February at unit costs presented as follows...
A:
Q: An animal shelter plans to sell T-shirts bearing their logo at an upcoming crafts fair. They find a ...
A: Cost of inventory = Cost of purchase + Cost of logo printing + Cost of freight in
Q: An employee has total gross wages of $7,000, Federal Unemployment Expense, and State Unemployment Ex...
A: Solution A journal is a company's official book in which all business transaction are recorded in ch...
Q: Question 1: HKU Leasing agrees to lease equipment to Minion Furniture on January 1, 20X1. The follow...
A: Lease- It is a contract in which the lessee leases an asset from the lessor for a predetermined peri...
Q: The total cost assigned to job 777C is P24,000 which includes direct materials cost of P6,000. The f...
A: Total cost = P24000 Material cost = P6000 Labor and overhead cost = 24000-6000 = P18000 Labor cost =...
Q: New Partner A and New Partner B are both proprietor who decided to form a partnership on July 22, 20...
A: The capital of new firm will be equal to aggregate fair value of Assets Contributed by both partners...
Q: Zea Company’s Job 888 manufactured 13,750 units that were completed in February at unit costs presen...
A: Unit cost of good units = (Total cost incurred - Realizable value of spoiled units) / No. of good un...
Q: Prepare the journal entry for the following transactions (1) Geysler Company sold some old equipment...
A: Introduction: Journals: Recording of a business transactions in a chronological order. First step in...
Q: alculate the overhead rate using activity based costing. (Round answers to 2 decimal places, e.g. 12...
A: EcoFabrics has budgeted overhead costs of $1,039,500. It has two main products - Wool and cotton. Th...
Q: 4. If the company wants a 20% before-tax return on sales, what level of sales, in pesos, does it nee...
A: Contribution margin or gross profit refers to the profit earns by the company for selling goods and ...
Q: Johnson Company has a breakeven point of 4,800 units. At breakeven, variable costs are P480,000 and ...
A: Break even point = Fixed costs /Contribution margin per unit where, Contribution margin per unit = ...
Q: The total factory overhead for Big Light Company is budgeted for the year at $1,022,250. Big Light m...
A: Solution Factory overhead is the total cost involved in operating all production facilities of a man...
Q: Date of Note Interest Maturity Date June 10 July 14 April 27
A: Interest expense refers to those expense which is paid by an individual or company on the amount bor...
Q: which of the following areas would an internal audit be required to have proficiency when carrying o...
A: Internal auditor be required to have proficiency when carrying out an audit of corporate governance ...
Q: PROBLEM 2. Outlast Company's projected profit for the coming year follows: Per Unit Total P200,000 (...
A: cost volume profit analysis statement is prepared in order to find the impact that whenever there is...
Q: The accounting records of X Corp shows the following: Increase of RM if 45,000; decrease din FG Inve...
A: Solution: Cost of raw materials used = Purchase of raw materials + Transportation In - Increase in ...
Q: Direct Materials Variances The following data relate to the direct materials cost for the productio...
A: Direct material cost variance means variance between standard cost and actual cost of materials whic...
Q: The Love Manufacturing Company has the following financial information: · Manufacturing ove...
A: The Cost of Goods Sold (COGS) is the cumulative total of direct costs incurred for the goods or serv...
Q: Boo Company's current sales volume is 7,200 units with selling price of P15 per unit. The company ha...
A: Break even point = Fixed costs /Contribution margin per unit where, Contribution margin per unit = ...
Q: Required: Identify four items/accounts with which the company can manipulate and affect the earning ...
A: Companies that manipulate accounts often seeking to increase their net income in order to create the...
Q: Kokey's accounting records shows the following: Increase of Raw Materials of 4,500; decrease in Fini...
A: Cost of direct materials used = Cost of Purchases of raw materials + Decrease(increase) of Raw Mater...
Q: Following is relevant information for Snowdon Sandwich Shop, a small business that serves sandwiches...
A: Contribution margin = Sales - Variable costs Net Operating Income = Contribution margin - Fixed cost...
Q: At the beginning of April, Chickadee Corporation has a balance of $11,500 in the Retained Earnings a...
A: Using the external transactions above, computation of the balance of retained earnings at April 30: ...
Q: : The initial cost of a paint sand mill, including its installation is P 800,000. The depreciable l...
A: Sinking method assumption is made to collect amount of total value of machine at the end of period o...
Q: management con $6,000. Payroll for the month of May is as follows: FICA Social Securi federal inco...
A: A
Q: The standard cost sheet for Chambers Company, which manufactures one product, follows: ...
A: Variances will be considered favorable if actual performance is better or meets standards and unfa...
Q: Which of the following is not true?A. Organizations share a common purpose or mission.B. Organizatio...
A: Organization - Organizations is an entity having one or more people having different purpose, and a...
Q: ank statement. The accountant has found the following discrepancies: i. A cheque for $3,000 received...
A: Bank reconciliation statement refers to a reconciliation between the entries entered in the cash boo...
Q: month? A. 5.72 B. 5.61
A: Joint cost: It is the cost of producing two products or services together in a single process. Commo...
Q: Direct Labor 180 Factory overhead, included P10 allowance for spoilage 180 Final inspection reveale...
A: Cost of production(COP) refers to material, labours and overheads incurred during production.
Q: Assume the following information pertaining to Star Company: Prime costs $ 195,000 Conversion costs ...
A: Prime cost is a combination of direct material used and direct labor. So direct labor is the differe...
Q: Materials used - 10,000 kg. Conversion cost P24,000 28,000 Product JKA JKB JKC JJD Sales Value per k...
A: Cost per kilo of JKA = Total costs allocated to JKA / Output for JKA Total costs to be allocated = M...
Q: Joint products A, B and C are produced by JNT Corp. For the month just ended, these data are availab...
A: Joint cost is the cost allocation process where the joint costs of the organization are allocated ov...
Q: A business owned by A1 was short of cash and she decided to form a partnership with A2, who was able...
A: Answer) The amount of cash contributed by A2 in the partnership firm will be equal to 1.50 times of ...
Q: Factory overhead, included P10 allowance for spoilage 180 Final inspection revealed that 600 bags w...
A: Cost of production(COP) refers to material, labours and overheads incurred during production.
Q: The following information pertains to Ft. Collins Company's direct labor for March 2019: Standard di...
A: Formula: Actual labor cost = Actual Hours x Actual rate
Q: Requirement: For each of the following independent income-sharing agreements, prepare an income dist...
A: We are given various scenarios regarding payment of interest on capital, bonus and salaries to partn...
Q: A machine costing RM100,000 depreciates RM10,000 for the first year RM9,000 for the second year, RM8...
A: Depreciation means the loss in value of assets because of usage of assets , passage of time or chang...
Q: Accumulated depreciation-Equipment of JAD Company at December 31, 2019 and December 31, 2020 were P1...
A: Depreciation is charged against the value of fixed assets. It can be calculated by using the straigh...
Step by step
Solved in 2 steps
- Nico Parts, Inc., produces electronic products with short life cycles (of less than two years). Development has to be rapid, and the profitability of the products is tied strongly to the ability to find designs that will keep production and logistics costs low. Recently, management has also decided that post-purchase costs are important in design decisions. Last month, a proposal for a new product was presented to management. The total market was projected at 200,000 units (for the two-year period). The proposed selling price was 130 per unit. At this price, market share was expected to be 25 percent. The manufacturing and logistics costs were estimated to be 120 per unit. Upon reviewing the projected figures, Brian Metcalf, president of Nico, called in his chief design engineer, Mark Williams, and his marketing manager, Cathy McCourt. The following conversation was recorded: BRIAN: Mark, as you know, we agreed that a profit of 15 per unit is needed for this new product. Also, as I look at the projected market share, 25 percent isnt acceptable. Total profits need to be increased. Cathy, what suggestions do you have? CATHY: Simple. Decrease the selling price to 125 and we expand our market share to 35 percent. To increase total profits, however, we need some cost reductions as well. BRIAN: Youre right. However, keep in mind that I do not want to earn a profit that is less than 15 per unit. MARK: Does that 15 per unit factor in preproduction costs? You know we have already spent 100,000 on developing this product. To lower costs will require more expenditure on development. BRIAN: Good point. No, the projected cost of 120 does not include the 100,000 we have already spent. I do want a design that will provide a 15-per-unit profit, including consideration of preproduction costs. CATHY: I might mention that post-purchase costs are important as well. The current design will impose about 10 per unit for using, maintaining, and disposing our product. Thats about the same as our competitors. If we can reduce that cost to about 5 per unit by designing a better product, we could probably capture about 50 percent of the market. I have just completed a marketing survey at Marks request and have found out that the current design has two features not valued by potential customers. These two features have a projected cost of 6 per unit. However, the price consumers are willing to pay for the product is the same with or without the features. Required: 1. Calculate the target cost associated with the initial 25 percent market share. Does the initial design meet this target? Now calculate the total life-cycle profit that the current (initial) design offers (including preproduction costs). 2. Assume that the two features that are apparently not valued by consumers will be eliminated. Also assume that the selling price is lowered to 125. a. Calculate the target cost for the 125 price and 35 percent market share. b. How much more cost reduction is needed? c. What are the total life-cycle profits now projected for the new product? d. Describe the three general approaches that Nico can take to reduce the projected cost to this new target. Of the three approaches, which is likely to produce the most reduction? 3. Suppose that the Engineering Department has two new designs: Design A and Design B. Both designs eliminate the two nonvalued features. Both designs also reduce production and logistics costs by an additional 8 per unit. Design A, however, leaves post-purchase costs at 10 per unit, while Design B reduces post-purchase costs to 4 per unit. Developing and testing Design A costs an additional 150,000, while Design B costs an additional 300,000. Assuming a price of 125, calculate the total life-cycle profits under each design. Which would you choose? Explain. What if the design you chose cost an additional 500,000 instead of 150,000 or 300,000? Would this have changed your decision? 4. Refer to Requirement 3. For every extra dollar spent on preproduction activities, how much benefit was generated? What does this say about the importance of knowing the linkages between preproduction activities and later activities?Variety Artisans has a bottleneck in their production that occurs within the engraving department. Arjun Naipul, the COO, is considering hiring an extra worker, whose salary will be $45,000 per year, to solve the problem. With this extra worker, the company could produce and sell 3,500 more units per year. Currently, the selling price per unit is $18 and the cost per unit is $5.85. Using the information provided, calculate the annual financial impact of hiring the extra worker.Total Pops data show the following information: New machinery will be added in April. This machine will reduce the labor required per unit and increase the labor rate for those employees qualified to operate the machinery. Finished goods inventory is required to be 20% of the next months requirements. Direct material requires 2 pounds per unit at a cost of $3 per pound. The ending inventory required for direct materials is 15% of the next months needs. In January, the beginning inventory is 3,000 units of finished goods and 4,470 pounds of material. Prepare a production budget, direct materials budget, and direct labor budget for the first quarter of the year.
- Kerr Manufacturing sells a single product with a selling price of $600 with variable costs per unit of $360. The companys monthly fixed expenses are $72,000. What is the companys break-even point in units? What is the companys break-even point in dollars? Prepare a contribution margin income statement for the month of January when they will sell 500 units. How many units will Kerr need to sell in order to realize a target profit of $120,000? What dollar sales will Kerr need to generate in order to realize a target profit of $120,000? Construct a contribution margin income statement for the month of June that reflects $600,000 in sales revenue for Kerr Manufacturing.Cadre, Inc., sells a single product with a selling price of $120 and variable costs per unit of $90. The companys monthly fixed expenses are $180,000. What is the companys break-even point in units? What is the companys break-even point in dollars? Prepare a contribution margin income statement for the month of October when they will sell 10,000 units. How many units will Cadre need to sell in order to realize a target profit of $300,000? What dollar sales will Cadre need to generate in order to realize a target profit of $300,000? Construct a contribution margin income statement for the month of August that reflects $2,400,000 in sales revenue for Cadre, Inc.The Silver Star Bicycle Company will manufacture both mens and womens models for its Easy-Pedal bicycles during the next two months. Management wants to develop a production schedule indicating how many bicycles of each model should be produced in each month. Current demand forecasts call for 150 mens and 125 womens models to be shipped during the first month and 200 mens and 150 womens models to be shipped during the second month. Additional data are as follows: Last month, the company used a total of 1,000 hours of labor. The companys labor relations policy will not allow the combined total hours of labor (manufacturing plus assembly) to increase or decrease by more than 100 hours from month to month. In addition, the company charges monthly inventory at the rate of 2% of the production cost based on the inventory levels at the end of the month. The company would like to have at least 25 units of each model in inventory at the end of the two months. (Hint: Define variables for production and inventory held in each period for each product. Then use a constraint to define the relationship between these: inventory from end of previous period + produced this period demand this period = inventory at end of this period.) a. Establish a production schedule that minimizes production and inventory costs and satisfies the labor-smoothing, demand, and inventory requirements. What inventories will be maintained and what are the monthly labor requirements? b. If the company changed the constraints so that monthly labor increases and decreases could not exceed 50 hours, what would happen to the production schedule? How much will the cost increase? What would you recommend?
- Artisan Metalworks has a bottleneck in their production that occurs within the engraving department. Jamal Moore, the COO, is considering hiring an extra worker, whose salary will be $55,000 per year, to solve the problem. With this extra worker, the company could produce and sell 3,000 more units per year. Currently, the selling price per unit is $25 and the cost per unit is $7.85. Using the information provided, calculate the annual financial impact of hiring the extra worker.Order Point Pershing, Inc. expects daily usage of 500 lb of material X, an anticipated lead time of seven days, and a desired safety stock of 2,500 lb. a. Determine the order point. b. Determine the number of pounds to be issued from safety stock if the new order is four days late.Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The cost of placing an order is 30. The cost of holding one unit of inventory for one year is 15.00. Currently, Ottis places 160 orders of 4,000 plastic housing units per year. Required: 1. Compute the economic order quantity. 2. Compute the ordering, carrying, and total costs for the EOQ. 3. How much money does using the EOQ policy save the company over the policy of purchasing 4,000 plastic housing units per order?
- Maple Enterprises sells a single product with a selling price of $75 and variable costs per unit of $30. The companys monthly fixed expenses are $22,500. What is the companys break-even point in units? What is the companys break-even point in dollars? Construct a contribution margin income statement for the month of September when they will sell 900 units. How many units will Maple need to sell in order to reach a target profit of $45,000? What dollar sales will Maple need in order to reach a target profit of $45,000? Construct a contribution margin income statement for Maple that reflects $150,000 in sales volume.Deuce Sporting Goods manufactures a high-end model tennis racket. The company’s forecasted income statement for the year, before any special orders, is as follows: Fixed costs included in the forecasted income statement are $400,000 in manufacturing cost of goods sold and $200,000 in selling expenses. A new client placed a special order with Deuce, offering to buy 1,000 tennis rackets for $100.00 each. The company will incur no additional selling expenses if it accepts the special order. Assuming that Deuce has sufficient capacity to manufacture 1,000 more tennis rackets, by what amount would differential income increase (decrease) as a result of accepting the special order? (Hint: First compute the variable cost per unit relevant to this decision.)Bethany Company has just completed the first month of producing a new product but has not yet shipped any of this product. The product incurred variable manufacturing costs of 5,000,000, fixed manufacturing costs of 2,000,000, variable marketing costs of 1,000,000, and fixed marketing costs of 3,000,000. Under the variable costing concept, the inventory value of the new product would be: a. 5,000,000. b. 6,000,000. c. 8,000,000. d. 11,000,000.