Coed Scents, a national producer of young adult perfumes and colognes, needs to determine if it would be cheaper to produce 100,000 bottles of its most popular perfume, Two AM, for sale in its college town shops or to purchase them from an outside supplier for $25 each. Cost information on internal production includes the following:   Total Cost   Unit Cost Direct materials $2,000,000     $ 20.00   Direct labor 350,000   3.50   Variable manufacturing overhead 150,000   1.50   Variable marketing overhead 250,000   2.50   Fixed plant overhead 300,000   3.00      Total $3,050,000   $30.50   Fixed overhead will continue whether Two AM is produced internally or externally. No additional costs of purchasing will be incurred beyond the purchase price. Now assume that Coed Scents’ internal audit team learned through a special data analytics project that intellectual property theft is a significant threat for outsourced production. The team estimates that if Coed Scents outsources its production, it will need to spend $350,000 to manage intellectual property theft of its Two AM brand by competitors operating in the country where the outsourced production occurs. Which alternative is more cost effective? By how much?

Lean Mfg: Vintage Audio Inc

Make or Buy  Specialty Metal Products, Inc. manufactures filters for use in custom over-the-range hoods. The costs per unit, for a batch of 10,000 filters, are as follows.   Direct materials $4.00 Direct labor 2.00 Variable overhead 1.00 Fixed overhead 4.00 Total costs $11.00   Custom Kitchens has offered to sell 10,000 filters to Specialty Metal Products for $12 per filter. If Specialty Metal Products accepts Custom Kitchens’ offer, the facilities used to manufacture filters could be used to produce BBQ grates. Revenues from the sale of BBQ grates are estimated at $19,000, with variable costs amounting to 80% of sales. In addition, $1 per unit of the fixed overhead associated with the manufacture of filters could be eliminated.   Compute the following: Cost to make filters Answer Cost to buy filters Answer Should Specialty Metal Products accept Custom Kitchens’ offer? A. Yes, the cost to purchase the filters is less than the cost to make them. B. No, the…

Skyline Florists uses an activity-based costing system to compute the cost of making floral bouquets and delivering the bouquets to its commercial customers. Company personnel who earn $220,000 typically perform both tasks; other firm-wide overhead is expected to total $80,000. These costs are allocated as follows:   Bouquet Production   Delivery   Other Wages and salaries   70 %     20 %     10 % Other overhead   50 %     30 %     20 %   Skyline anticipates making 20,000 bouquets and 5,000 deliveries in the upcoming year.What is the cost of wages and salaries and other overhead that would be charged to each bouquet made?

Glassworks makes products for the sandblasting industry. One of the products they make is bags of high-grade sandblasting media that is made from a combination of quartz-sand and recycled ground-glass (cullet). Standard costs and quantities to produce one bag of sandblasting media are as follows:                           Quantity          Cost Quartz-sand    20 kg               $4.00 Cullet               5 kg                $3.00   80,000 bags of sandblasting media were produced. Actual purchases and inventories were:                         Beginning           Ending          Purchases        Purchases                         Inventory         Inventory              (in kg)            ( in $) Quartz-sand       0 kg                          0 kg       1,610,000 kg   $322,161 Cullet                  0 kg              120,000 kg         550,000 kg    $286,000   Required: Calculate the following variances: a)Total direct material efficiency variance. b)Total direct material mix variance.…

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Vikram bhai

Wall Nuts, Incorporated produces paneling that requires two processes, A and B, to complete. Oak is the best-selling type of paneling produced. Information related to the 40,000 units of oak paneling produced annually is shown in the following table:  Direct materials $ 380,000   Direct labor     Department A (6,000 DLH × $25 per DLH) $ 150,000   Department B (35,125 DLH × $16 per DLH) $ 562,000   Machine Hours     Department A 24,000 MH Department B 32,000 MH   Wall Nuts' total expected overhead costs and related overhead data are shown below.    Department A Department B Direct labor hours 67,000 DLH 170,000 DLH Machine hours 100,000 MH 80,000 MH Budgeted overhead costs $ 450,000   $ 600,000   Use the data for Wall Nuts, Incorporated to compute the dollar amount of overhead applied to each unit of oak paneling, assuming the company uses departmental overhead rates based on machine hours in Department A and machine hours in Department B.

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