Concept explainers
1.
Introduction: Expenses are the cost that helps company in operating through which company generates revenue. Expenses include payments made to factory lease, equipment
The allocation of fixed administrative expenses among three restaurants.
2.
Introduction: Expenses are the cost that helps company in operating through which company generates revenue. Expenses include payments made to factory lease, equipment depreciation, suppliers, and employee wages. mapping the formal plan.
The change in each restaurant’s allocated cost.
3.
Introduction: Expenses are the cost that helps company in operating through which company generates revenue. Expenses include payments made to factory lease, equipment depreciation, suppliers, and employee wages. mapping the formal plan.
To comment: On usefulness of sales dollars as an allocation base.
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MANAGERIAL ACCOUNTING F/MGRS.
- Hrs.7 PT corp makes 300 units of A per year. At this level, the cost per unit includes $360 in direct materials, $1,000 in direct labor, $240 in variable overhead, and $900 in fixed overhead. An outside supplier has offered to make all 300 units for $2,100 per unit. If PT accepts this offer, two thirds of the fixed overhead would persist, but would be defrayed by renting out the floor space for $72,000 per year. What is the total fixed costs from the original estimate of production costs per unit? How much of the total fixed costs will persist (including defrayal by renting the space)?arrow_forwardAllocated Fixed Manufacturing Overhead $5.00 Unit Cost $26.00 Note: The fixed manufacturing overhead is common to the company. The production capacity is 327,000 units per year. However, Bluejay Rollers expects to produce only 220,000 units for the coming year. The company also has fixed selling costs of $574,000 per year and variable selling costs of $4 per unit sold. Each skateboard normally sells for $39 each. Recently, a customer offered to buy 52,000 skateboards at a special price of $21 each. This order would not have any variable selling costs because no sales commissions are involved. Based on a quantitative analysis, should the company accept the special order? Do not enter dollar signs or commas in the input boxes. Use the negative sign for values that must be subtracted and negative values. Total Revenues $Answer Total Directarrow_forwardQ6 – B Hambar Co. has a unit selling price of $800, variable costs per unit of $520 and fixed costs of $420,000. The company’s sales units are 600,000 for this year. Instructions: a) Determine the contribution margin per unit. b) Using the contribution margin technique, compute the break-even point in units.arrow_forward
- Problem A. The C Division of White Company sells its product for P30 per unit. Variable cost per unit are: manufacturing, P12; and selling and administrative, P2. Fixed cost are: P200,000 manufacturing overhead, and P50,000 selling administrative. There was no beginning inventory in 2007. Expected sale for next year is 40,000 units. Ryan Santos, the manager of the C Division, is under pressure to improve the performance of the division. As he plans for next year, he decided to produce 40,000 units. What would the manufacturing cost per unit be under absorption costing? What would the manufacturing cost per unit be under variable costing? What would the net income be under absorption costing? What would the net income be under variable costing?arrow_forwardCH7-Q50: Hi I have asked this question before, but i haven't received explanation on requirement # 3. Also, last question was not answered. Please answer #6 (last question) and fully explain # 3. thanks! Jellico Inc.'s projected operating income (based on sales of 450,000 units) for the coming year is as follows: Total Sales $ 12,150,000 Total variable cost 7,533,000 Contribution margin $ 4,617,000 Total fixed cost 2,875,878 Operating income $ 1,741,122 Required: 1(a). Compute variable cost per unit. Enter your answer to the nearest cent.$per unit 1(b). Compute contribution margin per unit. Enter your answer to the nearest cent.$per unit 1(c). Compute contribution margin ratio. % 1(d). Compute break-even point in units. units 1(e). Compute break-even point in sales dollars.$ 2. How many units must be sold to earn operating income of $376,542? units 3. Compute the additional operating income that Jellico would earn if sales were $50,000 more than expected.$ 4. For…arrow_forwardfix my answer: 5)Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 36,000 Rets per year. Costs associated with this level of production and sales are given below: Unit Total Direct materials $ 25 $ 900,000 Direct labor 8 288,000 Variable manufacturing overhead 3 108,000 Fixed manufacturing overhead 7 252,000 Variable selling expense 4 144,000 Fixed selling expense 6 216,000 Total cost $ 53 $ 1,908,000 The Rets normally sell for $58 each. Fixed manufacturing overhead is $252,000 per year within the range of 26,000 through 36,000 Rets per year. Required: Assume due to a recession, Polaski Company expects to sell only 26,000 Rets through regular channels next year. A large retail chain offered to purchase 10,000 Rets if Polaski will accept a 16% discount off the regular price. There would be no sales commissions on this order; thus, variable selling expenses would be slashed by 75%.…arrow_forward
- Example 1Assume that Grace Company presently produces and sells 20,000 units of product A which represents only 80% of its normal capacity of 25,000 units. Its regular selling price is P50 per unit and its manufacturing, selling and administrative costs are as follows:Materials P10Labor 12Variable OH 8Fixed OH 60,000Variable selling and administrative 7Fixed selling and administrative 40,000 Grace Company received an order from a provincial distributor for 3,000 units. The customer asks for a special discount of 30%. It is expected that the company will incur no additional selling and administrative costs. Should Grace company accept the special order?arrow_forwardAy 2. Mcq 10. Harcourt Manufacturing (HM) has the capacity to produce 12,400 fax machines par year. HM currently produces and sells 8,200 units per year. HM currently leases its excess capacity for a rental fee of $55,500. The fax machines normally sell for $220 each. Modem Products has offered to buy 3,200 fax machines from HM for $120 each. Unit-level costs associated with manufacturing the fax machines are $39 each for direct labor and $64 each for direct materials. Product-level and facility- level costs are $62,000 and $77,000, respectively. Based on this information (ignore qualitative characteristics) A. HM should reject the offer because accepting it will reduce profitability by $12,400. B. HM should reject the offer because accepting it will reduce profitability by $1,100. C. HM should accept the offer because accepting it will contribute $12,400 to profit. D. HM should accept the offer because accepting it will contribute $55,500 to profit.arrow_forwardCh. 7 Incremental Analysis pg 467 Segment Income Statement Please provide the answer and explain the answer to the following question with the information given below. "Big Tent Company is trying to decide whether to keep or drop one of its outdoor wedding tents. The company's segmented income statement shows that this product is generating a net loss as follows:" Sales Revenue: $100,000 Less: Variable Costs $70,000 Contribution Margin $30,000 Less: Direct Fixed Costs $10,000 Segment Margin $20,000 Less: Allocated common fixed costs $30,000 Net Operating Income $(10,000) The company estimates that eliminating this product line will increase the contribution margin on a related product line by $25,000. Based on this information, what impact would dropping the line have on the company's overall profitability?arrow_forward
- Q1. Jassim Compagny is producing only one product. Two types of direct materials are used to produce this product: direct material type A and direct material type B. The estimated data for Jassim Compagny is as following: Sales $90,000 Costs: Direct materials type A $40,000 Hourly employees 15,000 Manager’s salary 10,000 Direct materials type B 5,000 Marketing 10,000 Total Costs 80,000 Budgeted pretax profit $ 10,000 Compute the revenues needed to achieve a target after-tax income of $30,000. The income tax rate is 20%. What is the margin of safety in revenue?arrow_forwardNUBD wishes to market a new product for P1.50 per unit. Fixed costs to manufacture this product are P100,000 for less than 500,000 units and P150,000 for 500,000 units or more. The contribution margin ratio is 20%. How many units must be sold to realize net income from this product of P100,000? A. 333,333 B. 500,000 C. 666,667 D. 833,333arrow_forwardBreak-even sales under present and proposed conditions Kearney Company, operating at full capacity, sold 400,000 units at a price of $246.60 per unit during 20Y5. Its income statement for 20Y5 is as follows: The division of costs between fixed and variable is as follows: Management is considering a plant expansion program that will permit an increase of $8,631,000 (35.000 units at $246.60) in yearly sales. The expansion will increase fixed costs by $3,600,000 but will not affect the relationship between sales and variable costs. Instructions Determine for 20Y5 the total fixed costs and the total variable costs.arrow_forward
- Survey of Accounting (Accounting I)AccountingISBN:9781305961883Author:Carl WarrenPublisher:Cengage Learning