FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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- Novak Productions Limited manufactures and sells three different products of different qualities. They are referred to as: Normal, High, and Superior. The accounting department provides the following information on these products: Normal High Superior Selling price per unit $ 35.00 $ 47.00 $ 54.00 Variable costs per unit $ 30.17 $ 40.00 $ 50.00 Contribution margin per unit $ 4.83 $ 7.00 $ 4.00 Machine hours required 0.02 0.04 0.08 (a) Determine the contribution margin per machine hour. Contribution Margin Normal $ per machine hour High $ per machine hour Superior $ per machine hourarrow_forwardAlibaba Manufacturing manufactures widgets for distribution. The standard costs for the manufacture of widgets follow: Standard Costs Actual CostsDirect materials 3 lbs. per widget at 31,000 lbs. at $34 $35 per pound per poundDirect labor 2.5 hours per widget 22,500 hours at at $11 per hour $11.80 per hourFactory overhead Variable cost, $24/widget $241,500 variable cost Fixed cost, $40/widget $381,250 fixed cost Budgeted factory overhead was $640,000. Overhead applied is based on widgets produced. The company estimated that 10,000 widgets would be produced; however, only 9,600 were produced. InstructionsCalculate the following amounts.1. Rate at which total factory overhead is applied2. Materials price…arrow_forwardPlease do not give solution in image format thankuarrow_forward
- Therapeutic Systems sells its products for $23 per unit. It has the following costs Rent Factory labor Executives under contract Raw material $ 195,000 $9.00 per unit $365,500 $ 2.20 per unit Separate the expenses between fixed and variable costs per unit. Using this information and the sales price per unit of $23, compute the break-even point. Note: Do not round intermediate calculations. Break-even point hitsarrow_forwardFollowing costs and revenue are incurred/earned by Toy inc. on each unit of teddy bear: Selling price Materials $49 $12 Labour $15 Variable overhead Fixed overhead $7 $6 Toy Inc. has received an offer from a customer. The customer is ready to buy 1,500 unitsat $37 each. However, the customer is asking for customized colouring on the teddy bear'spocket, which will require additional $1 per teddy bear. Should the offer from customer be accepted by Toy Inc.? Accept due to Incremental profit of $3,300. Reject due to Incremental loss of $3,000. Accept due to Incremental profit of $3,000 Reject due to incremental loss of $3,300arrow_forwardGadubhaiarrow_forward
- Epsilon Company can produce a unit of product for the following costs: Direct material $ 8.10 Direct labor 24.10 Overhead 40.50 Total product costs per unit $ 72.70 An outside supplier offers to provide Epsilon with all the units it needs at $64.55 per unit. If Epsilon buys from the supplier, the company will still incur 30% of its overhead. Epsilon should choose to:arrow_forwardCollins Co. produces a part used in the manufacture of one of its products. The unit product cost is $40, computed as follows: Direct materials, direct labor, and variable overhead $24 Fixed overhead $16 Total $40 An outside supplier has offered to provide the parts for only $30 each. If the parts are purchased from the outside supplier, (1) the company estimates that 25% of the fixed overhead cost above could be eliminated; (2) the company can use the freed capacity to launch a new product, earning a contribution margin of $5 per unit. Based on these data, the per-unit dollar financial advantage or disadvantage of purchasing from the outside supplier would be: Multiple Choice a)$7 financial disadvantage b)$8 financial advantage c)$2 financial disadvantage d)$3 financial advantagearrow_forwardPlz . without plagiarism pleasearrow_forward
- Please only answer the total amount of fixed manufacturing overhead.arrow_forwardThe Salsa Division of the Spicy Foods Company has provided you with the following information at a volume of 40,000 bottles: Cost Per unit Direct material $8.00 Direct labor $4.00 Variable overhead $3.00 Fixed overhead - Traceable $6.00 Fixed overhead - Allocated $5.00 Total $26.00 An outside vendor has approached Salsa and offered to produce 30,000 bottles of salsa at a price of $22.00 per unit. By outsourcing, the company could begin operating a new line of Hot Sauce that is expected to generate sales of $500,000. Outsourcing will also allow Salsa to eliminate 30% of the division's traceable fixed overhead. NOTE: The contribution margin ratio for Hot Sauce = 40%. Determine the impact on income if Salsa accepts the outside supplier's offer.arrow_forwardSheffield Corp. incurs the following costs to produce 10500 units of a subcomponent: Direct materials Direct labor Variable overhead Fixed overhead $(3600). $9200 Ⓒ$8150. $950. $(950). 11750 13000 An outside supplier has offered to sell Sheffield the subcomponent for $2.80 a unit. No fixed costs are avoidable. If Sheffield accepts the offer, it could use the production capacity to produce another product that would generate additional income of $3600. The increase (decrease) in net income from accepting the offer would be 20800arrow_forward
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