CONNECT ONLINE ACCESS F/MANAGERIAL ACC.
6th Edition
ISBN: 9781264445356
Author: Noreen
Publisher: MCG
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Chapter 3A, Problem 3A.5P
1.
To determine
Introduction:
To compute: The predetermined overhead rate using direct labor hours as the allocation based and unit product cost of each model.
2.
To determine
Introduction: Job costing is a technique of determine the cost of a manufacturing job rather than the process of the job. Manufacturing overhead is applied to product or job order is determined as predetermined overhead. Absorption costing is used to calculate the cost of product while taking indirect and direct expense into account. Activity based costing assign the cost of all the activity of the organization according to their actual consumption
To compute: The predetermined overhead rate for each four activity cost pools
3.
To determine
Introduction: Job costing is a technique of determine the cost of a manufacturing job rather than the process of the job. Manufacturing overhead is applied to product or job order is determined as predetermined overhead. Absorption costing is used to calculate the cost of product while taking indirect and direct expense into account. Activity based costing assign the cost of all the activity of the organization according to their actual consumption
To compute: Total amount of
4.
To determine
Introduction: Job costing is a technique of determine the cost of a manufacturing job rather than the process of the job. Manufacturing overhead is applied to product or job order is determined as predetermined overhead. Absorption costing is used to calculate the cost of product while taking indirect and direct expense into account. Activity based costing assign the cost of all the activity of the organization according to their actual consumption
The factors that may account for the company’s declining profit.
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Microhard produces tablets, laptops and televisions. Microhard typically sells 1,000 tablets a year. The tablet information is as follows:
Selling price per unit
Direct material cost per unit
Direct labor cost per unit
Total unavoidable allocated overhead
How much would Operating Income decrease if Microhard were to eliminate the tablets?
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Piedmont Fasteners Corporation makes three different clothing fasteners in its manufacturing facility in North Carolina. All three
products are sold in highly competitive markets, so the company is unable to raise prices without losing an unacceptable number of
customers. Data from the most recent period concerning these products appear below:
Annual sales volume
Unit selling price
Variable expense per unit
Contribution margin per unit
Velero
102,400
$ 1.65
$ 1.25
$ 0.40
Motal
204,800
$ 1.50
$ 0.70
$ 0.80
Nylon
409,600
$ 0.85
$ 0.25
$ 0.60
Total fixed expenses are $409,600 per period. Of the total fixed expenses, $20,000 could be avoided if the Velcro product is dropped,
$80,000 if the Metal product is dropped, and $60,000 if the Nylon product is dropped. The remaining fixed expenses of $249,600
consist of common fixed expenses such as administrative salaries and rent on the factory building that could be avoided only by going
out of business entirely.
The company's managers would…
g Enabled: MGMT8500-Midterm Exam - Wednes...
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Siegel Corporation manufactures a product available in both a deluxe and a regular model. The company has made the regular model
for years; the deluxe model was introduced several years ago to capture a new segment of the market. Since the introduction of the
deluxe model, the company's profits have steadily declined, and management has become concerned about the accuracy of its
costing system. Sales of the deluxe model have been increasing rapidly.
Overhead is applied to products on the basis of direct labour-hours. At the beginning of the current year, management estimated that
$2,041,000 in overhead costs would be incurred and the company would produce and sell 5,000 units of the deluxe model and
32,000 units of the regular model. The deluxe model requires 2.5 hours of direct labour time per unit, and the regular model requires
1.2 hours. Materials and labour costs follow:
Deluxe
$125
20
Regular
$85
12
Direct materials cost per unit…
Chapter 3A Solutions
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- Change in Sales Mix and Contribution Margin Head Pops Inc. manufactures two models of solar-powered, noise-canceling headphones: Sun Sound and Ear Bling models. The company is operating at less than full capacity. Market research indicates that 33,600 additional Sun Sound and 36,600 additional Ear Bling headphones could be sold. The income from operations by unit of product is as follows: Sun SoundHeadphones Ear BlingHeadphones Sales price $34.10 $53.20 Variable cost of goods sold 19.10 29.80 Manufacturing margin $15.00 $23.40 Variable selling and administrative expenses 6.80 10.60 Contribution margin $8.20 $12.80 Fixed manufacturing costs 3.10 4.80 Income from operations $5.10 $8.00 Prepare an analysis indicating the increase or decrease in total profitability if 33,600 additional Sun Sound and 36,600 additional Ear Bling headphones are produced and sold, assuming that there is sufficient capacity for the additional production. Round…arrow_forwardActivity-Based Customer-Driven Costs Suppose that Stillwater Designs has two classes of distributors: JIT distributors and non-JIT distributors. The JIT distributor places small, frequent orders, and the non-JIT distributor tends to place larger, less frequent orders. Both types of distributors are buying the same product. Stillwater Designs provides the following information about customer-related activities and costs for the most recent quarter: JIT Non-JIT Distributors Distributors Sales orders 1,000 100 Sales calls 70 70 Service calls 350 175 Average order size 650 6,500 Manufacturing cost/unit $125 $125 Customer costs: Processing sales orders $3,230,000 Selling goods 1,120,000 Servicing goods 1,050,000 Total $5,400,000 Required: 1. Calculate the total revenues per distributor category, and assign the customer costs to each distributor type by using revenues as the allocation base. Selling price for one unit is ŝ150. Round calculations to the nearest dollar. JIT Non-JIT Sales (in…arrow_forwardOutsourcing Dough, Re, Mi Inc. sells many different types of cookie dough. The company is deciding whether to continue making its own dough or to outsource. If the company outsources, they will eliminate all of the variable overhead and 30% of the fixed manufacturing overhead, but will incur shipping costs. Use the information below to determine whether Dough, Re, Mi Inc. should outsource or not. Data Units Per unit Relevant? Sales price per unit $ Direct materials 119.00 26.00 per unit Direct labor per unit 18.00 Variable manufacturing overhead per unit 14.00 Fixed manufacturing overhead (MOH): per month 30.00 Avoidable fixed MOH per month Unavoidable fixed MOH per month Sales commissions per unit 3.00 Advertising costs per month per unit Purchase price of outsourced product Shipping costs of outsourced product 1.80 59.00 1.00 per unit Costs per unit Incremental analysis Manufacture Variable costs Enter "=0" in the cell for any cost not relevant to the decision. Direct materials…arrow_forward
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- Inventory effects under absorption costing BendOR, Inc., manufactures control panels for the electronics industry and has just completed its first year of operations. The following discussion took place between the controller, Gordon Merrick, and the company president, Matt McCray: Matt: Ive been looking over our first years performance by quarters. Our earnings have been increasing each quarter, even though our sales have been flat and our prices and costs have not changed. Why is this? Gordon: Our actual sales have stayed even throughout the year, but weve been increasing the utilization of our factory every quarter. By keeping our factory utilization high, we will keep our costs down by allocating the fixed plant costs over a greater number of units. Naturally, this causes our cost per unit to be lower than it would be otherwise. Matt: Yes, but what good is this if we are unable to sell everything that we make? Our inventory is also increasing. Gordon: This is true. 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