etters Cabinets, Inc., needs to choose a production method for its new office shelf, the Maxistand. To help accomplish this, the firm has gathered the following oduction cost data: Variable Costs (per unit) ($) Material Annualized Fixed Cost Process Type of Plant & Equipment Labor Energy Mass Customization $1,260,000 30 18 12 Intermittent $1,000,000 24 26 20 Repetitive $1,720,000 28 15 12 Continuous $2,100,000 25 15 10 etters Cabinets projects an annual demand of 60,000 units for the Maxistand. The selling price for the Maxistand is $120 per unit. Based on the projected annual demand, the best alternative available is to use the Mass Customization process. The value of annual profit using this method is $ (Enter your response as an integer.)

etters Cabinets, Inc., needs to choose a production method for its new office shelf, the Maxistand. To help accomplish this, the firm has gathered the following oduction cost data: Variable Costs (per unit) ($) Material Annualized Fixed Cost Process Type of Plant & Equipment Labor Energy Mass Customization $1,260,000 30 18 12 Intermittent $1,000,000 24 26 20 Repetitive $1,720,000 28 15 12 Continuous $2,100,000 25 15 10 etters Cabinets projects an annual demand of 60,000 units for the Maxistand. The selling price for the Maxistand is $120 per unit. Based on the projected annual demand, the best alternative available is to use the Mass Customization process. The value of annual profit using this method is $ (Enter your response as an integer.)

Name: Metters Cabinets, Inc., needs to choose a production method for its n
Uploaded: 2024-03-20T06:32:49.000Z
Channel: Bartleby
Description: Metters Cabinets, Inc., needs to choose a production method for its new office shelf, the Maxistand. To help accomplish this, the firm has gathered the followingproduction cost data:Annualized Fixed CostVariable Costs (per unit) ($)Process Typeof Pl

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Cover-to-Cover Company is a manufacturer of shelving for books. The company has compiled the following cost data, and wants your help in determining the cost behavior. After reviewing the data, complete requirements (1) and (2) that follow. UnitsProduced TotalLumberCost TotalUtilitiesCost Total MachineDepreciationCost 12,000 shelves $144,000 $14,800 $130,000 24,000 shelves 288,000 28,600 130,000 48,000 shelves 576,000 56,200 130,000 60,000 shelves 720,000 70,000 130,000 1. Determine whether the costs in the table are variable, fixed, mixed, or none of these. Lumber Variable Cost Utilities Mixed Cost Depreciation Fixed Cost 2. For each cost, determine the fixed portion of the cost, and the per-unit variable cost. If there is no amount or an amount is zero, enter "0". Recall that, for N = Number of Units Produced, Total Costs = (Variable Cost Per Unit x N) + Fixed Cost. Complete the following table with your answers. Round…
Healthfirst (HF) Ltd has recently started to produce a face shield and product's standard cost data are as follows: Cost per unit Direct materials Perspex (0.5 meters @ $15 per meter) $ 7.50 Direct materials Hardened Plastic (0.25 meters at $20.00 per meter) 5.00 Direct manufacturing labour (0.5 hr @ $30.00 per hr) Manufacturing overhead Total Cost 15.00 Required Should HF accept the offer. Show all computations. 30.00 $57.50 Additional information 45% of the Manufacturing overhead changes with the number of units produced. Additionally, if production of face shields is discontinued, 20% of the remaining fixed cost will be avoided. The budgeted production used to compute overheads is 10,000 units per quarter. HF has been approached by another company who is willing to supply the face shields at $50. Per unit. The space used to manufacture face shields can be used to Generate $ 120,000 in contribution margin per quarter.
Cover-to-Cover Company is a manufacturer of shelving for books. The company has compiled the following cost data, and wants your help in determining the cost behavior. After reviewing the data, complete requirements (1) and (2) that follow. UnitsProduced TotalLumberCost TotalUtilitiesCost Total MachineDepreciationCost 6,000 shelves $72,000 $8,400 $125,000 12,000 shelves 144,000 15,300 125,000 24,000 shelves 288,000 29,100 125,000 30,000 shelves 360,000 36,000 125,000 1. Determine whether the costs in the table are variable, fixed, mixed, or none of these. Lumber Utilities Depreciation 2. For each cost, determine the fixed portion of the cost, and the per-unit variable cost. If there is no amount or an amount is zero, enter "0". Recall that, for N = Number of Units Produced, Total Costs = (Variable Cost Per Unit x N) + Fixed Cost. Complete the following table with your answers. Round variable portion of cost (per…
Creative Cabinets Inc., needs to choose a production method for its new office shelf, the Maxistand. To help accomplished this, the company has gathered the following production cost data: VARIABLE COSTS PER UNIT PROCESS TYPE ANNUALIZED FC LABOR MATERIAL ENERGY MASS CUSTOMIZATION $1,260,000 30 18 17 INTERMITTENT 1,000,000 34 16 20 REPETITIVE 1,425,000 28 20 15 CONTINUOUS 1,600,000 25 25 13 Creative Cabinets projects an annual demand of 18,000 units for the maxistand. The maxistand will sell for $195 per unit. a) Which process type will maximize the annual profit from producing the maxistand and by how much? b) What is the BEP for each process type?
Cover-to-Cover Company is a manufacturer of shelving for books. The company has compiled the following cost data, and wants your help in determining the cost behavior. After reviewing the data, complete requirements (1) and (2) that follow. UnitsProduced TotalLumberCost TotalUtilitiesCost Total MachineDepreciationCost 6,000 shelves $72,000 $7,900 $135,000 12,000 shelves 144,000 14,800 135,000 24,000 shelves 288,000 28,600 135,000 30,000 shelves 360,000 35,500 135,000 1. Determine whether the costs in the table are variable, fixed, mixed, or none of these. Lumber Utilities Depreciation 2. For each cost, determine the fixed portion of the cost, and the per-unit variable cost. If there is no amount or an amount is zero, enter "0". Recall that, for N = Number of Units Produced, Total Costs = (Variable Cost Per Unit x N) + Fixed Cost. Complete the following table with your answers. Round variable portion of cost (per unit)…
Mohave Corp. is considering outsourcing production of ht eumbrella tote bag included with some of its products. The company has received a bid from a supplier in Vietnam to produce 9600 units per year for 7.00 each. Mohave has the following information about the cost of producing tote bags:Directs materials 3.00Direct Labor 2.00Variable manufacturing overhead 1.00Fixed manufacturing overhead 2.50Total cost per unit 8.50Mohave has deteremined that all variable costs could be eliminated by outsourcing the tote bads, while 75 percent of the fixed overhead cost is unavoidable. At this time, Mohave has no specifif use in mind for the space currently dedicated to producing the tote bags.1.) Compute the difference in cost between making and buying the umbrella tote bag. 2.) Based strictly on the incremental analysis should mohave buy the tote bags or contiunue to make them? 3-a.) Suppose that the space mohave currently uses to make the bags could be utilized by a new product line that would…
Rundle Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,300 containers follows. Unit-level materials. Unit-level labor Unit-level overhead Product-level costs* Allocated facility-level costs One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Rundle for $2.60 each. Required a. Calculate the total relevant cost. Should Rundle continue to make the containers? b. Rundle could lease the space it currently uses in the manufacturing process. If leasing would produce $11,600 per month, calculate the total avoidable costs. Should Rundle continue to make the containers? Answer is complete but not entirely correct. $ a. Total relevant cost a. Should Rundle continue to make the containers? b. Total avoidable cost b. Should Rundle continue to make the containers? 190.650,000 Yes $24,180,000 $ 5,200 6,100 4,000 7,800…
Adams Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,300 containers follows. Unit-level materials Unit-level labor Unit-level overhead Product-level costs* Allocated facility-level costs $5,900 6,200 3,500 *One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Adams for $2.60 each. Required X Answer is complete but not entirely correct. $ 19,300 Yes $ 24,180 X No 11,100 26,900 a. Calculate the total relevant cost. Should Adams continue to make the containers? b. Adams could lease the space it currently uses in the manufacturing process. If leasing would produce $11,800 per month, calculate the total avoidable costs. Should Adams continue to make the containers? a. Total relevant cost a. Should Adams continue to make the containers? b. Total avoidable cost b. Should Adams continue to make the containers?
Frannie Fans currently manufactures ceiling fans that include remotes to operate them. The current cost to manufacture 10,340 remotes is as follows: Direct materials Direct labor Variable overhead Fixed overhead Total Cost $ 67,210 $ 56,870 $ 31,020 $ 51,700 $ 206,800 Frannie is approached by Lincoln Company, which offers to make the remotes for $18 per unit. Required: 1. Compute the difference in cost per unit between making and buying the remotes if none of the fixed costs can be avoided. What is the change in net income, if Frannie Fans buys the remotes? 2. Compute the difference in cost per unit between making and buying the remotes if $20,680 of the fixed costs can be avoided. What is the change in net income, if Frannie Fans buys the remotes? 3. What is the change in net income if fixed cost of $20,680 can be avoided and Frannie could rent out the factory space no longer in use for $20,680? Complete this question by entering your answers in the tabs below. Required 1 Required 2…
IKIT company produces and sells recliner chairs. IKIT uses an absorption product costing system, which means that both variable and fixed overhead are included in the product cost. Cost estimates for a recliner chair and expected production volume for next year are as follows: Per Unit Total Direct materials $40Direct labour $20Variable manufacturing overhead $14Variable selling and administrative expenses $15Fixed selling and administrative expenses $380,000Fixed manufacturing overhead $460,000Expected volume of production (units): 42,000The company’s owners expect to earn a rate of return (ROI) of 30% on their invested assets of $2,500,000. a)a. IKIT currently uses the cost-plus pricing method. Compute the mark-up percentage and target selling price that will allow IKIT to earn its desired ROI of 30% for next year. b) Based on a recent marketing research, the senior management has an optimistic sales expectation of 50,000 units and predicts to earn a higher ROI of 35%. Compute new…
Manoli Company has collected the following data for use in calculating product costs:Activity Data (expected and actual):Rug CleanersSweepersTotalUnits produced50,000250,000300,000Prime costs$200,000$750,000$950,000Direct labor hours10,00040,00050,000Machine hours20,00010,00030,000Number of setups2575100Inspection hours1,2002,8004,000Number of moves140210350Departmental Data (expected and actual):MoldingAssemblyTotalDirect labor hours:Rug cleaners5,0005,00010,000Sweepers5,00035,00040,000Totals10,00040,00050,000Machine hours:Rug cleaners17,0003,00020,000Sweepers3,0007,00010,000Totals20,00010,00030,000Overhead costs:Machining$120,000$ 30,000$150,000Moving materials40,00030,00070,000Setting up70,00010,00080,000Inspecting products20,00030,00050,000Totals$250,000$100,000$350,000What is the activity rate for moving materials?a. 0.2b. $800c. $1,000d. $200
Frannie Fans currently manufactures ceiling fans that include remotes to operate them. The current cost to manufacture 10,320 remotes is as follows: Direct materials Direct labor Variable overhead Fixed overhead Total Cost $ 67,080 $ 56,760 $ 30,960 $ 51,600 $ 206,400 Frannie is approached by Lincoln Company, which offers to make the remotes for $18 per unit. Required: 1. Compute the difference in cost per unit between making and buying the remotes if none of the fixed costs can be avoided. What is the change in net income, if Frannie Fans buys the remotes? 2. Compute the difference in cost per unit between making and buying the remotes if $20,640 of the fixed costs can be avoided. What is the change in net income, if Frannie Fans buys the remotes? 3. What is the change in net income if fixed cost of $20,640 can be avoided and Frannie could rent out the factory space no longer in use for $20,640?