![Managerial Accounting: Creating Value in a Dynamic Business Environment](https://www.bartleby.com/isbn_cover_images/9781260417074/9781260417074_largeCoverImage.gif)
Managerial Accounting: Creating Value in a Dynamic Business Environment
12th Edition
ISBN: 9781260417074
Author: HILTON, Ronald
Publisher: MCGRAW-HILL HIGHER EDUCATION
expand_more
expand_more
format_list_bulleted
Question
Chapter 15, Problem 48C
1.
To determine
Determine the selling price per unit which should be selected by G Industries for each of the SU Compounds for the remaining six months of the year.
2.a.
To determine
Suggest whether G Industries should consider to close its operations until January 1 of the next year to reduce its losses.
2.b.
To determine
Identify the qualitative factors that should be considered whether G Industries should consider to close its operations until January 1 of the next year to reduce its losses.
Expert Solution & Answer
![Check Mark](/static/check-mark.png)
Trending nowThis is a popular solution!
![Blurred answer](/static/blurred-answer.jpg)
Students have asked these similar questions
Caldwell Supply, a wholesaler, has determined that its operations have three primary activities: purchasing, warehousing, and distributing. The firm reports the following operating data for the year just completed: Caldwell buys 100,900 units at an average unit cost of $19 and sells them at an average unit price of $29. The firm also has fixed operating costs of $250,900 for the year. Caldwell's customers are demanding a 19% discount for the coming year. The company expects to sell the same amount if the demand for price reduction can be met. Caldwell's suppliers, however, are willing to give only a 14% discount. Required: Caldwell has estimated that it can reduce the number of purchase orders to 770 and can decrease the cost of shipment by $12 with minor changes in its operations. Any further cost savings must come from reengineering the warehousing processes. What is the maximum cost (i.e., target cost) for warehousing if the firm desires to earn the same amount of profit next year?
Aziz Company sells two types of products, basic and deluxe. The company provides technical support for users of
its products at an expected cost of $270,000 per year. The company expects to process 10,000 customer service
calls per year.
Required:
1. Determine the company's cost of technical support per customer service call.
2. During the month of January, Aziz received 570 calls for customer service on its deluxe model and 270 calls for
customer service on its basic model. Assign technical support costs to each model using activity-based costing
(ABC).
Assign technical support costs to each model
Model
Activity Rate
Deluxe
Basic
Cost driver quantity incurred Allocated Cost
Qinto Company sells two types of products, basic and deluxe. The company provides technical support for users of its products at an expected cost of $250,000 per year. The company expects to process 10,000 customer service calls per year. 1. Determine the company’s cost of technical support per customer service call. 2. During the month of January, Qinto received 650 calls for customer service on its deluxe model and 150 calls for customer service on its basic model. Assign technical support costs to each model using activity-based costing (ABC).
Chapter 15 Solutions
Managerial Accounting: Creating Value in a Dynamic Business Environment
Ch. 15 - Prob. 1RQCh. 15 - Prob. 2RQCh. 15 - List and briefly describe four major influences on...Ch. 15 - Prob. 4RQCh. 15 - Prob. 5RQCh. 15 - Prob. 6RQCh. 15 - Define the following terms: total revenue,...Ch. 15 - Prob. 8RQCh. 15 - Prob. 9RQCh. 15 - Prob. 10RQ
Ch. 15 - Prob. 11RQCh. 15 - List the four common cost bases used in cost-plus...Ch. 15 - List four reasons often cited for the widespread...Ch. 15 - What is the primary disadvantage of basing the...Ch. 15 - Prob. 15RQCh. 15 - Prob. 16RQCh. 15 - Prob. 17RQCh. 15 - Explain the phrase price-led costing.Ch. 15 - Prob. 19RQCh. 15 - Prob. 20RQCh. 15 - Could tear-down methods be used effectively for...Ch. 15 - Briefly describe the time-and-material pricing...Ch. 15 - Explain the importance of the excess-capacity...Ch. 15 - Prob. 24RQCh. 15 - Describe the following approaches to pricing new...Ch. 15 - Prob. 26RQCh. 15 - Briefly explain the potential negative...Ch. 15 - Prob. 28ECh. 15 - Prob. 29ECh. 15 - Prob. 30ECh. 15 - The marginal cost, marginal revenue, and demand...Ch. 15 - Prob. 32ECh. 15 - Refer to the cost and production data for the Wave...Ch. 15 - Prob. 35ECh. 15 - The following data pertain to Royal Lighting...Ch. 15 - Prob. 37ECh. 15 - Badger Valve and Fitting Company, located in...Ch. 15 - North American Pharmaceuticals, Inc. specializes...Ch. 15 - MPE, Inc. will soon enter a very competitive...Ch. 15 - Prob. 41PCh. 15 - Prob. 42PCh. 15 - Prob. 43PCh. 15 - Alexis Kunselman, president of Pharsalia...Ch. 15 - Southern Tier Heating, Inc. installs heating...Ch. 15 - Omaha Synthetic Fibers Inc. specializes in the...Ch. 15 - Prob. 47PCh. 15 - Prob. 48CCh. 15 - Zylar Industries is a manufacturer of standard and...
Knowledge Booster
Similar questions
- Mc Graw Hill Campbell Corporation makes and sells state-of-the-art electronics products. One of its segments produces The Math Machine, an inexpensive calculator. The company's chief accountant recently prepared the following income statement showing annual revenues and expenses associated with the segment's operating activities. The relevant range for the production and sale of the calculators is between 35,000 and 68,000 units per year. Revenue (37,000 units x $9.00) Unit-level variable costs Materials cost (37,000 × $2.00) Labor cost (37,000 × $1.00) Manufacturing overhead (37,000 × $0.70) Shipping and handling (37,000 × $0.34) Sales commissions (37,000 × $1.00) Contribution margin Fixed expenses Advertising costs Salary of production supervisor Allocated company-wide facility-level expenses Net loss $333,000 (74,000) (37,000) (25,900) (12,580) (37,000) 146, 520 Required a. A large discount store has approached the owner of Campbell about buying 6,000 calculators. It would replace…arrow_forwardCrede Inc. has two divisions. Division A makes and sells student desks. Division B manufactures and sells reading lamps. Each desk has a reading lamp as one of its components. Division A can purchase reading lamps at a cost of $10.10 from an outside vendor. Division A needs 11,100 lamps for the coming year. Division B has the capacity to manufacture 49,600 lamps annually. Sales to outside customers are estimated at 38,500 lamps for the next year. Reading lamps are sold at $12.09 each. Variable costs are $6.87 per lamp and include $1.41 of variable sales costs that are not incurred if lamps are sold internally to Division A. The total amount of fixed costs for Division B is $75,900. Consider the following independent situations. What should be the minimum transfer price accepted by Division B for the 11,100 lamps and the maximum transfer price paid by Division A? (Round answers to 2 decimal places, e.g. 15.25.) Per unit Minimum transfer price accepted by Division B $_ Maximum transfer…arrow_forwardMesa Telcom has three divisions, commercial, retail, and consumer, that share the common costs of the company's computer server network. The annual common costs are $2,860,000. You have been provided with the following information for the upcoming year: Connections Time on Network (hours) Commercial 51,000 121,000 Retail 61,000 151,000 Consumer 108,000 378,000 What is the allocation rate for the upcoming year, assuming Mesa Telcom uses the single-rate method and allocates common costs based on the time on the network? Multiple Choice $4.40. $3.29. $23.64. $19.36.arrow_forward
- The Walton Toy Company manufactures a line of dolls and a sewing kit. Demand for the company’s products is increasing, and management requests assistance from you in determining an economical sales and production mix for the coming year. The company has provided the following data (please see attachment): The following additional information is available: The company’s plant has a capacity of 137,510 direct labor-hours per year on a single-shift basis. The company’s present employees and equipment can produce all five products. The direct labor rate of $8 per hour is expected to remain unchanged during the coming year. Fixed manufacturing costs total $550,000 per year. Variable overhead costs are $2 per direct labor-hour. All of the company’s nonmanufacturing costs are fixed. The company’s finished goods inventory is negligible and can be ignored. Required: 1. How many direct labor hours are used to manufacture one unit of each of the company’s five products? 2. How…arrow_forwardBalcom Enterprises is planning to introduce a new product that will sell for $110 a unit. Manufacturing cost estimates for 27,000 units for the first year of production are: • Direct materials $1,269,000. • Direct labor $528,000 (based on $16 per hour x 33,000 hours). Although overhead has not be estimated for the new product, monthly data for Balcom's total production for the last two years has been analyzed using simple linear regression. The analysis results are as follows: Dependent variable Independent variable Intercept Coefficient on independent variable Coefficient of correlation R² Multiple Choice Based on this information, what is the total overhead cost for an estimated activity level of 43,000 direct labor-hours? $392,000 $144,000 $804,000 Factory overhead costs Direct labor hours. $134,000 $ $258.000 6.00 0.953 0.842arrow_forwardBlue Spruce Inc. has two divisions. Division A makes and sells student desks. Division B manufactures and sells reading lamps. Each desk has a reading lamp as one of its components. Division A can purchase reading lamps at a cost of $10 from an outside vendor. Division A needs 8,200 lamps for the coming year. Division B has the capacity to manufacture 41,000 lamps annually. Sales to outside customers are estimated at 32,800 lamps for the next year. Reading lamps are sold at $12 each. Variable costs are $7 per lamp and include $1 of variable sales costs that are not incurred if lamps are sold internally to Division A. The total amount of fixed costs for Division B is $65,600. Consider the following independent situations. (a) What should be the minimum transfer price accepted by Division B for the 8,200 lamps and the maximum transfer price paid by Division A? Minimum transfer price accepted by Division B Maximum transfer price paid by Division A $ $ per unit per unitarrow_forward
- Corazon Manufacturing Company has a purchasing department staffed by five purchasing agents. Each agent is paid 28,000 per year and is able to process 4,000 purchase orders. Last year, 17,800 purchase orders were processed by the five agents. Required: 1. Calculate the activity rate per purchase order. 2. Calculate, in terms of purchase orders, the: a. total activity availability b. unused capacity 3. Calculate the dollar cost of: a. total activity availability b. unused capacity 4. Express total activity availability in terms of activity capacity used and unused capacity. 5. What if one of the purchasing agents agreed to work half time for 14,000? How many purchase orders could be processed by four and a half purchasing agents? What would unused capacity be in purchase orders?arrow_forwardUsing the information in the previous exercises about Marleys Manufacturing, determine the operating income for department B, assuming department A sold department B 1,000 units during the month and department A reduces the selling price to the market price.arrow_forwardRDI Products Co. manufactures a variety of products made of plastic and aluminum components. During the winter months, substantially all of the production capacity is devoted to the production of lawn sprinklers for the following spring and summer seasons. Other products are manufactured during the remainder of the year. The company has developed standard costs for its several products. Standard costs for each year are set in the preceding October. The standard cost of a sprinkler for the current year is $3.70, computed as follows: During February, RDI Products manufactured 8,500 good sprinklers. The company incurred the following costs, which it charged to production: Materials price variations are not determined by usage but are charged to a materials price variation account at the time of purchase. All materials are carried in inventory at standard prices. Materials purchases for February were as follows: *Due to plastic shortages, the company was forced to purchase lower-grade plastic than called for in the standards. This increased the number of sprinklers rejected on inspection. Required: Calculate price and usage variances for each type of material and for labor, using the formulas on pages 421–422 and 424.arrow_forward
- Elliott, Inc., has four salaried clerks to process purchase orders. Each clerk is paid a salary of 25,750 and is capable of processing as many as 6,500 purchase orders per year. Each clerk uses a PC and laser printer in processing orders. Time available on each PC system is sufficient to process 6,500 orders per year. The cost of each PC system is 1,100 per year. In addition to the salaries, Elliott spends 27,560 for forms, postage, and other supplies (assuming 26,000 purchase orders are processed). During the year, 25,350 orders were processed. Required: 1. Classify the resources associated with purchasing as (1) flexible or (2) committed. 2. Compute the total activity availability, and break this into activity usage and unused activity. 3. Calculate the total cost of resources supplied (activity cost), and break this into the cost of activity used and the cost of unused activity. 4. (a) Suppose that a large special order will cause an additional 500 purchase orders. What purchasing costs are relevant? By how much will purchasing costs increase if the order is accepted? (b) Suppose that the special order causes 700 additional purchase orders. How will your answer to (a) change?arrow_forwardKrouse Company produces two products, forged putter heads and laminated putter heads, which are sold through specialty golf shops. The company is in the process of developing itsoperating budget for the coming year. Selected data regarding the companys two products areas follows: Manufacturing overhead is applied to units using direct labor hours. Variable manufacturing overhead Ls projected to be 25,000, and fixed manufacturing overhead is expected to be15,000. The estimated cost to produce one unit of the laminated putter head is: a. 42. b. 46. c. 52. d. 62.arrow_forwardZippy Inc. manufactures a fuel additive, Surge, which has a stable selling price of 44 per drum. The company has been producing and selling 80,000 drums per month. In connection with your examination of Zippys financial statements for the year ended September 30, management has asked you to review some computations made by Zippys cost accountant. Your working papers disclose the following about the companys operations: Standard costs per drum of product manufactured: Materials: Costs and expenses during September: Chemicals: 645,000 gallons purchased at a cost of 1,140,000; 600,000 gallons used. Empty drums: 94,000 purchased at a cost of 94,000; 80,000 drums used. Direct labor: 81,000 hours worked at a cost of 816,480. Factory overhead: 768,000. Required: Calculate the following for September, using the formulas on pages 421422 and 424 (Round unit costs to the nearest whole cent and compute the materials variances for both Surge and for the drums.): 1. Materials quantity variance. 2. Materials purchase price variance. 3. Labor efficiency variance. 4. Labor rate variance.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College PubPrinciples of Cost AccountingAccountingISBN:9781305087408Author:Edward J. Vanderbeck, Maria R. MitchellPublisher:Cengage Learning
- Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage LearningExcel Applications for Accounting PrinciplesAccountingISBN:9781111581565Author:Gaylord N. SmithPublisher:Cengage LearningPrinciples of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337902663/9781337902663_smallCoverImage.jpg)
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337912020/9781337912020_smallCoverImage.jpg)
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
![Text book image](https://www.bartleby.com/isbn_cover_images/9781305087408/9781305087408_smallCoverImage.gif)
Principles of Cost Accounting
Accounting
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Cengage Learning
![Text book image](https://www.bartleby.com/isbn_cover_images/9781305970663/9781305970663_smallCoverImage.gif)
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning
![Text book image](https://www.bartleby.com/isbn_cover_images/9781111581565/9781111581565_smallCoverImage.gif)
Excel Applications for Accounting Principles
Accounting
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College