Managerial Accounting: Tools for Business Decision Making
7th Edition
ISBN: 9781119034681
Author: Weygandt
Publisher: WILEY
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Textbook Question
Chapter 6, Problem 6.19E
Crate Express Co. produces wooden crates used for shipping products by ocean liner. In 2017, Crate Express incurred the following costs.
Wood used in crate production | $54,000 |
Nails (considered insignificant and a variable expense) | $ 350 |
Direct labor | $43,000 |
Utilities for the plant: | |
$1,500 each month. | |
plus $0.50 for each kilowatt-hour used each month | |
Rent expense for the plant for the year | $21,400 |
Assume Crate Express used an average 500 kilowatt-hours each month over the past year.
Instructions
(a) What is Crate Express's total manufacturing cost if it uses a variable costing approach?
(b) What is Crate Express's total manufacturing cost if it uses an absorption costing approach?
(c) What accounts for the difference in
Compute manufacturing cost under absorption and variable costing and explain difference.
(LO 5), AN
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Easton Company makes and sells scooters. Easton incurred the following costs in its most recent fiscal year:
Cost Items Appearing on the Income Statement
Materials cost ($10 per unit)
Company president's salary
Depreciation on manufacturing equipment
Salaries of administrative personnel
Labor cost ($4 per unit)
Advertising costs (150,000 per year)
Shipping and handling ($500 per year)
Research and development costs
Real estate taxes on factory
Inspection costs
Easton can currently purchase the scooters it makes from Weston Company. If the company purchases the scooters, Easton would still continue to use its own logo, sales staff, and advertising programs. If Easton outsources the scooters to Weston,
which of the following costs would be relevant to the outsourcing decision?
Multiple Choice
X
Materials cost
Shipping and handling
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All of these answers are correct.
2) TablMor Inc. Company manufactures furniture, including tables. Selected costs are given below:
1. The salary of the CEO of the company is $250,000 per year.
2. Instead of producing the tables, the company could rent its factory space for $85,000 per year.
3. Salespeople are paid a commission of $23 for each table sold.
4. The depreciation on the machines used to make the tables totals $38,000 per year. The machines
have no resale value and do not wear out through use.
5. The tables are made of iron that costs $250 per table.
6. The production line - on which workers are assembling the tables - is supervised by a production-
manager who is paid $67,000 per year.
7. Four machine-hours are required to produce a table. Utility costs are $8 per machine-hour.
8. Wages are paid to workers that assemble tables. The cost of wages is $55 per table.
9. The advertising expense of the year is $180,000 per year. It covers all the company's products.
The company produced 100 tables and sold 80…
Chapter 6 Solutions
Managerial Accounting: Tools for Business Decision Making
Ch. 6 - What is meant by CVP analysis?Ch. 6 - Provide three examples of management decisions...Ch. 6 - Prob. 3QCh. 6 - Describe the features of a CVP income statement...Ch. 6 - The traditional income statement for Wheat Company...Ch. 6 - Prob. 6QCh. 6 - What is meant by the term sales mix? How does...Ch. 6 - Prob. 8QCh. 6 - Prob. 9QCh. 6 - Prob. 10Q
Ch. 6 - What is the theory of constraints? Provide some...Ch. 6 - What is meant by "cost structure? Explain how a...Ch. 6 - What is operating leverage? How does a company...Ch. 6 - Prob. 14QCh. 6 - Prob. 15QCh. 6 - Prob. 16QCh. 6 - Distinguish between absorption costing and...Ch. 6 - Prob. 18QCh. 6 - Prob. 19QCh. 6 - Prob. 20QCh. 6 - Prob. 21QCh. 6 - Prob. 22QCh. 6 - Determine missing amounts for contribution margin....Ch. 6 - Hamby Inc. has sales of 2,000,000 for the first...Ch. 6 - Prob. 6.3BECh. 6 - Prob. 6.4BECh. 6 - Prob. 6.5BECh. 6 - Prob. 6.6BECh. 6 - NoFly Corporation sells three different models of...Ch. 6 - Information for NoFly Corporation is given in...Ch. 6 - Prob. 6.9BECh. 6 - Prob. 6.10BECh. 6 - In Marshall Company, data concerning two products...Ch. 6 - Prob. 6.12BECh. 6 - Prob. 6.13BECh. 6 - Prob. 6.14BECh. 6 - Prob. 6.15BECh. 6 - Compute product costs under variable costing. (LO...Ch. 6 - Compute product costs under absorption costing....Ch. 6 - Prob. 6.18BECh. 6 - Prob. 6.19BECh. 6 - Victoria Company reports the following operating...Ch. 6 - Prob. 6.2DICh. 6 - Zoom Corporation manufactures and sells three...Ch. 6 - Prob. 6.4DICh. 6 - Prob. 6.1ECh. 6 - In the month of June, Jose Heberts Beauty Salon...Ch. 6 - Compute net income under different alternatives....Ch. 6 - Prob. 6.4ECh. 6 - Prob. 6.5ECh. 6 - Yard Tools manufactures lawnmowers, weed-trimmers,...Ch. 6 - PDQ Repaint has 200 auto-maintenance service...Ch. 6 - Express Delivery is a rapidly growing delivery...Ch. 6 - Prob. 6.9ECh. 6 - Determine break-even point in dollars for two...Ch. 6 - Mars Company manufactures and sells three...Ch. 6 - Compute contribution margin and determine the...Ch. 6 - Helena Company manufactures and sells two...Ch. 6 - The CVP income statements shown below are...Ch. 6 - Casas Modernas of Juarez, Mexico, is contemplating...Ch. 6 - Prob. 6.16ECh. 6 - Compute product cost and prepare an income...Ch. 6 - Prob. 6.18ECh. 6 - Crate Express Co. produces wooden crates used for...Ch. 6 - Midlands Inc. had a bad year in 2016. For the...Ch. 6 - Lorge Corporation has collected the following...Ch. 6 - Determine break-even sales under alternative sales...Ch. 6 - Prob. 6.4APCh. 6 - The following CVP income statements are available...Ch. 6 - Bonita Beauty Corporation manufactures cosmetic...Ch. 6 - Prepare income statements under absorption costing...Ch. 6 - Dilithium Batteries is a division of Enterprise...Ch. 6 - CURRENT DESIGNS Current Designs manufactures two...Ch. 6 - Prob. 6.1BYPCh. 6 - Managerial Analysis For nearly 20 years,...Ch. 6 - Real-World Focus In a recent report, the Del Monte...Ch. 6 - The June 8, 2009, edition of the Wall Street...Ch. 6 - Prob. 6.6BYPCh. 6 - Ethics Case Brett Stem was hired during January...Ch. 6 - Prob. 6.9BYP
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