SixthZ makes custom cornhole boards and mass-produced bean bags for the cornhole boards, which are also separately sold. It rents sewing machines on as-needed basis. It needs one sewing machine for every 5,000 bags produced. The cost of this equipment is an example of a: Group of answer choices Step cost Variable cost Fixed cost

SixthZ makes custom cornhole boards and mass-produced bean bags for the cornhole boards, which are also separately sold. It rents sewing machines on as-needed basis. It needs one sewing machine for every 5,000 bags produced. The cost of this equipment is an example of a: Group of answer choices Step cost Variable cost Fixed cost

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 6PA: Carolina Yachts builds custom yachts in its production factory in South Carolina. Once complete,...

See similar textbooks

Similar questions

Carolina Yachts builds custom yachts in its production factory in South Carolina. Once complete, these yachts must be shipped to the dealership. They have collected this shipping cost data: Prepare a scatter graph of the shipping data. Plot cost on the vertical axis and yachts shipped on the horizontal axis. Is the relationship between shipping costs and unit shipped approximately linear? Draw a straight line through the scatter graph. Using the high-low method, create the cost formula for Carolina Yachts shipping costs. The least-squares regression method was used and the analysis resulted in this cost equation: Y= 4,000+ 1,275x. Comment on the accuracy of your high-low method estimation. What would you estimate shipping costs to be if Carolina Yachts shipped 10 yachts in a single month? Use the cost formula you obtained in part B. Comment on how accurately this is reflected by the scatter graph you constructed. What factors other than number of yachts shipped do you think could affect Carolina Yachts shipping expense? Explain.
Thermal Rising, Incorporated, makes paragliders for sale through specialty sporting goods stores. The company has a standard paraglider model, but also makes custom-designed paragliders. Management has designed an activity-based costing system with the following activity cost pools and activity rates: Activity Cost Pool Supporting direct labor Order processing Custom design processing Customer service Number of gliders Number of orders Activity Rate $16 per direct labor-hour Management would like an analysis of the profitability of a particular customer, Big Sky Outfitters, which has ordered the following products over the last 12 months: $ 198 per order. $260 per custom design $ 422 per customer Number of custom designs Direct labor-hours per glider Selling price per glider Direct materials cost per glider. The company's direct labor rate is $18 per hour. Customer margin Standard Model 16 1 0 27.50 $ 1,925 $452 Custom Design 2 2 2 32.00 $ 2,490 $582 Required: Using the company's…
Thermal Rising, Incorporated, makes paragliders for sale through specialty sporting goods stores. The company has a standard paraglider model, but also makes custom-designed paragliders. Management has designed an activity-based costing system with the following activity cost pools and activity rates: Activity Cost Pool Supporting direct labor Order processing Custom design processing Customer service Number of gliders Number of orders Management would like an analysis of the profitability of a particular customer, Big Sky Outfitters, which has ordered the following products over the last 12 months: Number of custom designs Direct labor-hours per glider Activity Rate $ 20 per direct labor-hour $ 198 per order $ 265 per custom design $ 422 per customer Selling price per glider Direct materials cost per glider The company's direct labor rate is $16 per hour. Customer margin Standard Model 13 1 0 28.50 $ 1,925 $ 452 Custom Design 3 3 3 31.00 $ 2,420 $ 584 Required: Using the company's…
ExerLight produces two types of exercise treadmils: Regular and Deluxe. The exercise craze and relatod demand is such that ExerLight could use all of its available machine hours producing either model. The two models are processed through the sarne produclion department. E (Click the icon to view the data.) What product mix will maximize operating income? (Hint: Use the allocation of fixed manufacturing overhead to determine the proportion of machine hours used by each product.) Prepare the product mix analysis. Data table ExerLight Product Mix Analysis A B Doluxe Regular Per Unit Sale price per unit 1,050 600 2 Deluxe Regular 111 57 Variable cosls per unit 3 Sale price 1,050 $ 600 Contribution margin per unit 4 Less expenses: Units produced with equivalent number of machine hours 5 Direct materials 260 150 Contribution margin for equivalent number of machine hours Direct labor 80 6 178 Variable manufacturing overhead 282 94 Fixed manufacturing overhead* 144 48 Variable operating…
Apple offers device service and repair through its AppleCare program, Assumed data follow. Direct labor rate Non-baterials-related overhead Materials-related overhead Target profit margin (on both conversion and direct materials) Required: 1. Compute time charge per hour of direct labor (in $). 2. Compute materials markup per dollar of direct material cost (in %). 3. Use time and materials pricing to compute the price for a local college. Apple estimates the obligation to this college will require 1,000 direct labor hours and $35,000 of direct materials cost. 1. Time charge per hour of direct labor 2. Materials markup 3. Time and materials price $40 per direct labor hour $10 per direct labor hour 4 of direct materials cost 40% per hour %
Pina Colada Company makes swimsuits and sells these suits directly to retailers. Although Pina Colada has a variety of suits, it does not make the Performance suit used by highly skilled swimmers. The market research department believes that a strong market exists for this type of suit. The department indicates that the Performance suit would sell for approximately $100. Given its experience, Pina Colada believes the Performance suit would have the following manufacturing costs. Direct materials Direct labor $24 33 Manufacturing overhead 43 Total costs $100 x Your answer is incorrect. Assume that Pina Colada uses cost-plus pricing, setting the selling price 23% above its costs. What would be the price charged for the Performance swimsuit? Selling price $ 125
Outdoor Luggage, Incorporated, makes high-end hard-sided luggage for sports equipment. Data concerning three of the company's most popular models appear below. Selling price per unit. Variable cost per unit Plastic injection molding machine processing time required to produce one unit Pounds of plastic pellets per unit Required 1 Complete this question by entering your answers in the tabs below. Required 2 Required: 1. If we assume that the total time available on the plastic injection molding machine is the constraint in the production process, how much contribution margin per minute of the constrained resource is earned by each product? 2. Which product offers the most profitable use of the plastic injection molding machine? Required 1 3. If we assume that a severe shortage of plastic pellets has required the company to cut back its production so much that its new constraint has become the total available pounds of plastic pellets, how much contribution margin per pound of the…
The KMP Metal Machining Company produces widgets according to customer order. The company has determined that widgets can be produced on three different machine tools: M1, M2, or M3. An analysis of widget production cost reveals the following data: Solve, a. Using a graphical approach, determine the most economical machine tool to use for all order sizes between 1 and 200 units. In other words, determine the subranges within the overall range of 1 to 200 for which each machine tool is preferred. b. Using an algebraic approach, determine the most economical machine tool to use for all order sizes between 1 and 200 units. c. For an order of size 75, which machine tool should be used to produce the order, and what is the total production cost? d. For an order of size 160, assume that the preferred (most economical) machine is unavailable. What penalty (expressed in dollars of additional production cost) must be paid if the second most economical machine is used? The third?
College Life produces sweatshirts for college organizations and uses hybrid costing. It reports the following for its fabrication process. Customers choose screen-printed or embroidered logos. Direct materials Conversion Fabrication process costs Customer choices-Logo types Screen-printed Embroidered Required: a. Compute the cost per unit for both the screen-printed and embroidered sweatshirts. b. If the company has a target markup of 30% above cost, compute the selling price for each type of sweatshirt. c. For the current period, the company added direct materials into production that should have produced 5,700 sweatshirts. Actual production was 5,415 (nondefective) sweatshirts. Compute the yield for this period. Express the answer in percent. Required 1 Required 2 Required 3 Per Unit $ 26 13 Complete this question by entering your answers in the tabs below. $39 $ 6 $ 12 Yield For the current period, the company added direct materials into production that should have produced 5,700…
College Life produces sweatshirts for college organizations and uses hybrid costing. It reports the following for its fabrication process. Customers choose screen-printed or embroidered logos. Direct materials Conversion Fabrication process costs Customer choices-Logo types Screen-printed Embroidered Required: a. Compute the cost per unit for both the screen-printed and embroidered sweatshirts. b. If the company has a target markup of 30% above cost, compute the selling price for each type of sweatshirt. c. For the current period, the company added direct materials into production that should have produced 6,700 sweatshirts. Actual production was 6,499 (nondefective) sweatshirts. Compute the yield for this period. Express the answer in percent. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Per Unit $ 46 23 $ 69 $ 6 $ 20 Compute the cost per unit for both the screen-printed and embroidered sweatshirts. Cost per unit $121.00 x $…
Thermal Rising, Incorporated, makes paragliders for sale through specialty sporting goods stores. The company has a standard paraglider model, but also makes custom-designed paragliders. Management designed an activity-based costing system with the following activity cost pools and activity rates: Activity Cost Pool Supporting direct labor Order processing Custom design processing Customer service Activity Rate $ 20 per direct labor-hour $ 190 per order $ 255 per custom design $ 420 per customer Management wants to calculate the profitability of a particular customer, Big Sky Outfitters, which ordered the following products over the last 12 months: Number of gliders Number of orders. Number of custom designs Direct labor-hours per glider Selling price per glider Direct materials cost per glider Standard Model 15 2 0 28.50 $ 1,850 $ 472 Custom Design 3 3 3 33.00 $ 2,400 $ 576 The company's direct labor rate is $20 per hour. Required: Using the company's activity-based costing system,…
Thermal Rising, Incorporated, makes paragliders for sale through specialty sporting goods stores. The company has a standard paraglider model, but also makes custom-designed paragliders. Management designed an activity-based costing system with the following activity cost pools and activity rates: Activity Cost Pool Supporting direct labor Order processing Custom design processing Customer service Activity Rate $ 18 per direct labor-hour $ 192 per order $ 269 per custom design $ 422 per customer Management wants to calculate the profitability of a particular customer, Big Sky Outfitters, which ordered the following products over the last 12 months: Number of gliders Number of orders Number of custom designs Standard Custom Model Design 13 2 1 2 0 2 33.00 Direct labor-hours per glider Selling price per glider Direct materials cost per glider The company's direct labor rate is $18 per hour. Required: 30.50 $ 1,875 $ 444 $ 2,400 $ 576 Using the company's activity-based costing system,…