Classify each of the preceding costs as output unit-level, batch-level, product-sustaining, or facility-sustaining. 2. Compute the cost per unit for the total manufacturing cost
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Question 1.1
Bichette Soda Company operates many bottling plants around the globe. At its Mississauga plant, where nine different brands are bottled, the following costs were incurred in the current year to produce 15,000,000 cans of soft drink:
- Development costs of adding the new product "Pop Plus" amounted to $614,000.
- Material handling costs of inspecting and handling concentrate, bottles, packages, and so forth amounted to $433,500. These costs are allocated to each production run.
- Incoming materials purchase costs that can be directly traced to individual products being canned and packaged. These costs are purely variable with output level and amounted to $2,213,000.
- Executive salaries and other central administration overhead amounted to $423,000.
- Plant overhead including costs related to: supervision, safety, energy and plant insurance amounted to $623,000.
- The cost of cleaning and calibrating equipment for each production run amounted to $171,500.
Required
- Classify each of the preceding costs as output unit-level, batch-level, product-sustaining, or facility-sustaining.
2. Compute the cost per unit for the total
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- 10 Ahron Company makes 8,000 units per year of a part it uses in the products it manufactures. The unit product cost of this part is computed as follows: Direct materials $14.90 Direct labor 17.50 1.90 Variable manufacturing overhead Fixed manufacturing overhead 21.10 Total manufacturing cost $55.40 An outside supplier has offered to sell the company all of the units it needs. If the company accepts this offer, the facilities now being used to make the part could be used to make more units of a product that is in high demand. The additional contribution margin on this other product would be $161,600 per year. If the part were purchased from the outside supplier, $7.50 of the fixed manufacturing overhead cost being applied to the part would be eliminated. What is the maximum amount the company should be willing to pay an outside supplier per unit for the part if the supplier commits to supplying all 8,000 units required each year? A. $49.50 B. $62.00 C. $48.80 D. $55.40 E. None of the…5 Required information [The following information applies to the questions displayed below] Cane Company manufactures two products called Alpha and Beta that sell for $210 and $172, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 128,000 units of each product. Its average cost per unit for each product at this level of activity are given below. Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha Beta $ 40 $ 24 38 34 25 23 33 36 30 26 33 28 $199 $ 171 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. 6. Assume that Cane normally produces and sells 108,000 Betas per year. What is the financial advantage (disadvantage) of discontinuing the…Current Attempt in Progress A company manufactures three products using the same production process. The costs incurred up to the split-off point are $208,400. These costs are allocated to the products on the basis of their sales value at the split-off point. The number of units produced, the selling prices per unit of the three products at the split-off point and after further processing, and the additional processing costs are as follows. Product D E Your answer is partially correct. F (b1) Number of Units Produced Incremental profit (loss) 4,350 5,530 1,900 Product D Selling Price at Split-Off $10.10 $ 11.10 19.20 Selling Price after Processing $15.40 16.40 23.00 Determine the incremental profit (loss) of each product(s). (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Product E Additional Processing Costs $ $16,995 21,509 10,790 Product F $
- Question Company XYZ is currently producing and selling 100 units. At this level, the total direct materials cost is $500, the total direct labor cost is $600 and the total manufacturing overhead cost is $1,200, which includes $800 fixed manufacturing overhead cost. The company's total selling and administrative expenses are $2,500, which include $1,500 fixed selling and administrative costs. Assume that the company wishes to increase the number of units produced and sold to 102 units, what would be the incremental cost? (rounded to nearest ($) value) Not yet answered Marked out of 0.80 P Flag question O a. 30 O b. 25 O c. 50 O d. None of the given answers O e. 46RequIred Informotion (The following information applies to the questions displayed below] Cane Company manufactures two products called Alpha and Beta that sell for $225 and $175, respectively. Each produc uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 130,000 units of each product. Its average cost per unit for each product at this level of activity are given below. Alpha $42 42 $24 32 Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses 34 29. $173 Total cost per unit The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses. are unavoidable and have been allocated to products based on sales dollars. 10. Assume that Cane expects to produce and sell 74,000 Alphas during the current year. A supplier has offered to manufacture a deliver 74,00O Alphas to Cane for a price of…Question 2 One of the chemical fertilizers produced by Ozone Chemicals passes two processes. In Process 1, normal losses are 20% of input whilst in Process 2 normal losses are 10% of input. The losses can be sold for RM1.20 per kg for Process 1 and RM1.40 per kg for Process 2. For February 2007, the following data were recorded:- Process 1 Direct material of 9,000 kg at RM1.65 per kg Direct labour cost of RM8,330(RM3.40 per hour) Production overhead is absorbed at RM2.60 per direct labour hour Actual output was 7,000 kg Process 2 Additional material of 600 kg of RM 1.80 per kg Direct labour of 1,000 hours ( RM3.40 per hour) Production overhead absorbed RM 2,900 Actual output was 6,900 kg. Note: The price per unit is to be calculated to four decimal places and all other calculations are to be rounded up to nearest RM. Required: a. Prepare Process 1 and Process 2 Accounts of the company. b. Normal Loss Account c. Abnormal loss/ Gain account (if any)
- ! Required information [The following information applies to the questions displayed below.] A company produces two products. Product 1 sells for $140 and Product 2 sells for $100. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 106,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Product Product 1 2 Direct materials $ 32 $ 16 Direct labor 24 19 Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses 10 20 22 16 12 19 14 Total cost per unit $121 $ 92 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. Consider each of the following questions separately. 3. Assume the company normally produces and sells 94,000 unit of Product 2 per year. What is the…Use the following to answer numbers 13 and 14 The Anderson Company has recently purchased a plant to manufacture a new product. The following data pertain to the new operation: Estimated annual sales 3,500 units at$20 Estimated costs: Direct materials Direct labor Factory overhead (all fixed) Selling Expenses. $6.00/unit $1.00/unit b. $24.34 c. $26.24 d. $26.34 $12,000 per year 30% of sales $16,000 per year Administrative expenses. 13- The break-even point in dollars is: a. $77,000 b. $78,000 c. $79,000 d. $80,000 14- What is the selling price if the profit per unit is $2.04? a. $24.24LL Requlred Information The following information applies to the questions displayed below] Cane Company manufactures two products called Alpha and Beta that sell for $225 and $175, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 130,000 units of each product Its average cost per unit for each product at this level of activity are given below. Alpha $42 Beta $ 24 32 24 Direct materials Direct labor Variable manufacturing overhead Traceable Fixed manufacturing overhead Variable selling expenses Common fixed expenses 42. 26. 34 31. 34. 27. Total cost per unit $173 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. 2 What is the company's total amount of common fixed expenses? Total common fixed expenses. ( Prev of 15 2 3 4 Next e to search TPL F4 F5
- Creating and Using a Cost Formula Big Thumbs Company manufactures portable flash drives for computers. Big Thumbs incurs monthly depreciation costs of $15,500 on its plant equipment. Also, each drive requires materials and manufacturing overhead resources. On average, the company uses 9,800 ounces of materials to manufacture 4,900 flash drives per month. Each ounce of material costs $3.00. In addition, manufacturing overhead resources are driven by machine hours. On average, the company incurs $24,500 of variable manufacturing overhead resources to produce 4,900 flash drives per month. In your calculations, round variable rate per flash drive to the nearest cent. If required, round final answers to the nearest cent. Required: 1. Create a formula for the monthly cost of flash drives for Big Thumbs. Total cost of flash drives = + ( x Number of flash drives) Total cost of flash drives = $fill in the blank 3 + ($fill in the blank 4 x Number of flash drives) 2. If the department…2. Joint product costing 17 Flora Perfume Company manufactures two perfume products in a joint process. In July, raw materials costing $50,000 were processed at a conversion cost of $80,000. The joint process resulted in 10 litres of product A and 15 litres of product B. Product A can be sold for $2 per millilitres, and product B can be sold for $1.5 per millilitres. Management generally processes each of these chemicals further in separable processes to produce more refined perfume products. Product A is processed separately at a cost of $0.5 per millilitres. The resulting product, product X sells for $5 per millilitres. Product B is processed separately at a cost of $0.75 per millilitres. The resulting product, product Y, sells for $3 per millilitres. Required: Allocate the company's joint production costs for July using: a. The physical unit method b. The relative-sales-value method. c. The net-realizable-value methodCreating and Using a Cost Formula Big Thumbs Company manufactures portable flash drives for computers. Big Thumbs incurs monthly depreciation costs of $14,400 on its plant equipment. Also, each drive requires materials and manufacturing overhead resources. On average, the company uses 18,500 ounces of materials to manufacture 7,400 flash drives per month. Each ounce of material costs $3.00. In addition, manufacturing overhead resources are driven by machine hours. On average, the company incurs $29,600 of variable manufacturing overhead resources to produce 7,400 flash drives per month. In your calculations, round variable rate per flash drive to the nearest cent. If required, round final answers to the nearest cent. Required: 1. Create a formula for the monthly cost of flash drives for Big Thumbs. Total cost of flash drives = Fixed cost v + ( Variable rate x Number of flash drives) Total cost of flash drives = $ 14,400 v + ($ 10.50 v x Number of flash drives) 2. If the department…
