Table 7.5A company makes four products that have the following characteristics: Product A sells for $50 but needs $10 ofmaterials to produce; Product B sells for $75 but needs $30 of materials to produce; Product C sells for $100 butneeds $50 of materials to produce; Product D sells for $150 but needs $75 of materials to produce. The processingrequirements for each product on each of the four machines are shown in the table.product (process time/unit)ABCDWork centerW6312X910484y129Z10711Work centers W, X, Y, and Z are available for 40 hours per week and have no setup time when switching betweenproducts. Market demand for each product is 80 units per week. In the questions that follow, the full cost method refersto maximizing the gross margin or product margin per unit for each product, the contribution margin approach refers tomaximizing the contribution margin per unit for each product, and the bottleneck method refers to maximizing thethroughput contribution margin for each product. Assume all products start at machine W then are processed in orderat X, Y and Z. Assume each worker works one 40 hour shift per week and is paid $10 per hour. Further, weeklyoverhead for the plant is $6000. During your calculations, carry all work to three decimal placesUse the information in Table 7.5.Based on throughput contribution margin and assuming direct labor is a relevant and variable cost, which product isthe most profitable?0000COUP

Answered: Image /qna-images/answer/c3722b45-a00b-45d0-b7fe-34891a8dd1d6.jpg

A company makes four products that have the following characteristics: Product A sells for $50 but needs $10 of materials to produce; Product B sells for $75 but needs $30 of materials to produce; Product C sells for $100 but needs $50 of materials to produce; Product D sells for $150 but needs $75 of materials to produce. The processing requirements for each product on each of the four machines are shown in the table. product (process time/unit)

A company makes four products that have the following characteristics: Product A sells for $50 but needs $10 of materials to produce; Product B sells for $75 but needs $30 of materials to produce; Product C sells for $100 but needs $50 of materials to produce; Product D sells for $150 but needs $75 of materials to produce. The processing requirements for each product on each of the four machines are shown in the table. product (process time/unit)

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

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 $1,800 and the total manufacturing overhead cost is $1,260, which includes $800 fixed manufacturing overhead cost. The company's total selling and administrative expenses are $2,800, 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) O a. 71 O b. 81 О с. None of the given answers O d. 41 О е. 55 AGE NEXT PAGE %3D ere to search
Brannon Company manufactures ceiling fans and uses an activity-based costing system. Each ceiling fan consists of 20 separate parts totaling $95 in direct materials, and requires 2.5 hours of machine time to produce. Additional information follows: Cost Pool Allocation Base Overhead Rate Materials handling Number of parts $.08 Machining Machine hours $7.20 Assembling Number of parts $.35 Packaging Number of finished units $2.70 What is the cost of machining per ceiling fan? Brannon Company manufactures ceiling fans and uses an activity-based costing system. Each ceiling fan consists of 20 separate parts totaling $95 in direct materials, and requires 2.5 hours of machine time to produce. Additional information follows: Cost Pool Allocation Base Overhead Rate Materials handling Number of parts $.08 Machining Machine hours $7.20 Assembling Number of parts $.35 Packaging Number of finished units $2.70 What is the cost of machining per ceiling fan? $144.00 $18.00 $180.00 $30.00
Glover Company makes three products in a single facility. These products have the following unit product costs: Product A B C Direct materials $ 32.80 $ 49.30 $ 55.70 Direct labor 20.20 22.80 13.60 Variable manufacturing overhead 1.20 0.60 0.90 Fixed manufacturing overhead 13.50 9.10 9.70 Unit product cost $ 67.70 $ 81.80 $ 79.90 Additional data concerning these products are listed below. Product A B C Mixing minutes per unit 1.20 1.20 0.20 Selling price per unit $ 58.00 $ 80.40 $ 73.90 Variable selling cost per unit $ 0.60 $ 1.10 $ 2.30 Monthly demand in units 2,000 3,300 1,300 The mixing machines are potentially the constraint in the production facility. A total of 6,520 minutes are available per month on these machines. Direct labor is a variable cost in this company. Required: a. How many minutes of mixing machine time would be required to satisfy demand for all three products? b. How much of…
A company makes two products—Product A and B. Data regarding the two products follow: Direct Labor-Hours per Unit Annual Production Product A 0.75 20,000 units Product B 0.50 50,000 units Additional information is as follows: Product A requires $40 in direct materials per unit, and Product B requires $32. The direct labor wage rate is $18 per hour. The company’s activity-based absorption costing system has the following activity cost pools: Activity Cost Pool (and Activity Measures) Estimated Overhead Cost Expected Activity Product A Product B Total Machine setups (number of setups) $ 100,000 100 300 400 Special processing (machine-hours) $ 200,000 2,000 6,000 8,000 General factory (Direct labor-hours) $ 150,000 15,000 25,000 40,000
Mahaley, Incorporated, manufactures and sells two products: Product Q9 and Product FO. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Product 09 Product Fe Total direct labor-hours Product Q9 Product Fe The direct labor rate is $22.50 per DLH. The direct materials cost per unit for each product is given below: Direct Materials Cost per Unit $ 175.60 $ 147.40 Activity Cost Pools Labor-related Expected Production 870 870 Machine setups Order size The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Estimated Overhead Cost Direct Labor- Hours Per Unit 8.7 6.7 Activity Measures DLHS setups MHS Total Direct Labor- Hours 7,569 5,829 13,398 $ 386,680 47,330 288, 200 $ 722,210 Expected Activity Product Q9 Product Fe 7,569 5,829 650 550 3,800 3,600 Total 13,398 1,200 7,400 The unit product cost…
Ptarmigan Company produces two products. Product A has a contribution margin of $65.00 and requires 10 machine hours. Product B has a contribution margin of $46.20 and requires 7 machine hours. Determine the most profitable product assuming the machine hours are the constraint. If required, round your answers to two decimal places. Contribution margin per machine hour: Product A $ Product B $ Product is the most profitable.
2..
XYZ Co. produces two different products (Product Y and Product Z) using two different activities: Machining, which uses machine hours as an activity driver, and Inspection, which uses number of batches as an activity driver. The cost of Machining is $500,000, while the cost of Inspection is $30,000. Product Y uses 20% of total machine hours and 75% of total batches. What is the total Machining cost assigned to Product Z? O a. $7,500 O b. None of the given answer is correct. Oc. $22,500 О с. O d. $400,000 O e. $375,000
Rex Industries has two products. They manufactured 12,540 units of product A and 8,255 units of product B. The data are: Activity in Estimated Cost Pool Overhead Product A Product B 1 $51,850 1,100 600 53,840 100 700 3 24,600 700 5,300 What is the activity rate for each cost pool? Round your answers to two decimal places. Activity in Activity Cost Pool Rate 1 $ 2 $ 3 $
3. A company makes two products 1 and 2. The finishing activity pool has estimated manufacuring costs of $59,715 and the cost drivers for Product 1 is 226 and 377 for Product 2. The assembling activity pool has estimated costs of $32,051 and the cost drivers for Product 1 is 418 and 272 for Product 2. Direct labor hours for Product 1 is 50,000 and 45,000 for Product 2. What is the manufacturing overhead rate to be used under activity based costing for the assembly pool? Round your final answer to two decimal places and do not write a dollar sign.
Lynwood, Inc. produces two different products (Product A and Product X) using two different activities: Machining, which uses machine hours as an activity driver, and Inspection, which uses number of batches as an activity driver. The activity rate for Machining is $180 per machine hour, and the activity rate for Inspection is $580 per batch. The activity drivers are used as follows: Product A: (machine hours= 1,200) (number of batches 55) Product X: (mahine hours= 3,200) (number of batches 18) Totals: (Machine hours= 4,400) (number of batches 73) What is the amount of Machining cost assigned to Product X?
Use the activity rate and usage information to determine the total activity cost and activity cost per unit for each product. If required, round the per unit answers to the nearest cent. Total Activity Cost Activity Cost Per Unit 66,810 ✓ 37,403 X 220.50 X 184.25 ✓ Elliptical machines Treadmill $