Controller Incorporated produces two basic types of video games, Clash and Slash. Pertinent datafollow (DLH = direct labor hour):Sales price (per unit)Costs (per unit):Direct materials.Direct laborVariable factory overhead (@$15 per DLH)Allocated fixed factory overhead (based on DLHS)Marketing expenses (all variable)Total costsOperating income (per unit)Multiple ChoiceThere is insufficient labor capacity in the plant to meet the combined demand for both Clash andSlash.Both products are produced through the same production departments.The contribution margin per unit for Clash is:OOOO$49.$15.$34.$35.Clash$ 250$39.7140702035236$ 14Slash$ 1753570351320173$ 2

Name: Controller Incorporated produces two basic types of video games, Clas
Uploaded: 2024-03-20T06:33:06.000Z
Channel: Bartleby
Description: Controller Incorporated produces two basic types of video games, Clash and Slash. Pertinent datafollow (DLH = direct labor hour):Sales price (per unit)Costs (per unit):Direct materials.Direct laborVariable factory overhead (@$15 per DLH)Allocated fi

Contribution margin is calculated by deducting all the variable cost from the sales. Contribution…

Business

Accounting

Controller Incorporated produces two basic types of video games, Clash and Slash. Pertinent data follow (DLH direct labor hour): Sales price (per unit) Costs (per unit): Direct materials Direct labor Variable factory overhead (@ $15 per DLH) Allocated fixed factory overhead (based on DLHS) Marketing expenses (all variable) Total costs Operating income (per unit) The contribution margin per unit for Clash is: There is insufficient labor capacity in the plant to meet the combined demand for both Clash and Slash. Both products are produced through the same production departments. Multiple Choice O O O $49. $15. $34. Clash $ 250 $35. 71 40 70 20 35 236 $ 14 Slash $ 175 35 70 35 13 20 173 $ 2

Controller Incorporated produces two basic types of video games, Clash and Slash. Pertinent data follow (DLH direct labor hour): Sales price (per unit) Costs (per unit): Direct materials Direct labor Variable factory overhead (@ $15 per DLH) Allocated fixed factory overhead (based on DLHS) Marketing expenses (all variable) Total costs Operating income (per unit) The contribution margin per unit for Clash is: There is insufficient labor capacity in the plant to meet the combined demand for both Clash and Slash. Both products are produced through the same production departments. Multiple Choice O O O $49. $15. $34. Clash $ 250 $35. 71 40 70 20 35 236 $ 14 Slash $ 175 35 70 35 13 20 173 $ 2

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 13MC: Activity-based costing systems: A. use a single predetermined overhead rate based on machine hours...

See similar textbooks

Similar questions

A company manufactures and markets three products that are made from the same set of machines. Production is limited by machine capacity. Using the data given below, you are required to indicate the priorities for products A, B, and C with a view to maximize profits. A B C ( Cost per unit) 3.25 Raw materials (Rs.) Direct Labour (Rs.) Other Variable Cost (Rs.) Selling Price (Rs.) Standard machine Time 2.25 4.25 0.50 0.50 0.50 0.30 0.45 0.71 5.90 6.00 7.00 required (per unit) 39 minute 20 minutes 28minutes In the following year, the company faces extreme shortage of raw materials. It is noted that 3kg, 4kg, 5kg of raw materials are required to produce one unit of A. B. and C respectively. How would product priorities change".
A. APPLY THE CONCEPTS: Determine the total variable cost Costs that change in direct proportion to the number of units produced or the amount of services provided are known as "variable costs." Variable costs are directly tied to activity bases and generally take the form of either direct labor or direct materials. A manufacturing company makes widgets with direct materials cost in the amount of $5 per unit. Because all production is done by robots, there are no labor costs directly associated with the production of widgets. To illustrate, assume that the manager wants to know total variable cost if 450 units were produced: Variable Cost per Unit x Units Produced = Total Variable Cost $_______ x 450 units = $________ Calculate total direct materials cost at different levels along the relevant range of 100-500 units. If your answer is zero, enter "0". Number of Units Produced Total Direct Materials Cost 0 units $______________ 100 $______________ 200…
The Gangwere Company has assembled the following data pertaining to certain costs that cannot be easily identified as either fixed or variable. Gangwere Company has heard about a method of measuring cost functions called the high-low method and has decided to use it in this situation. Month Cost Hours January $44,900 3,500 February 24,400 2,000 March 31,280 2,450 April 36,400 3,000 May 44,160 3,900 June 42,400 3,740How is the cost function stated? Question 12 options: a) y = $3,600 + $10.40X b) y = $10,112 + $8.64X c) y = $26,672 + $1.84X d) y = $21,360 + $10.40
Characteristics of Production Process, Cost Measurement Vince Melders, of EcoScape Company, designs and installs custom lawn and garden irrigation systems for homes and businesses throughout the state. Each job is different, requiring different materials and labor for installing the systems. EcoScape estimated the following for the year: Number of direct labor hours 6,720 Direct labor cost $67,200 Overhead cost $50,400 During the year, the following actual amounts were experienced: Number of direct labor hours 6,045 Direct labor incurred $66,495 Overhead incurred $50,500 Required: 1. Should EcoScape use process costing or job-order costing? 2. If EcoScape uses a normal costing system and overhead is applied on the basis of direct labor hours, What is the overhead rate? Round your answer to the nearest cent. per direct labor hour
Chrzan, Incorporated, manufactures and sells two products: Product EO and Product NO. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Product E0 Product Ne Total direct labor-hours Activity Cost Pools Labor-related Production orders 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 Multiple Choice $33.94 per MH $54.20 per MH Direct Expected Labor-Hours Production Per Unit 10.1 410 1,550 9.1 $51.98 per MH $21.40 per MH Activity Measures DLHS orders MHs Total Direct Labor- Hours $ 301,890 61,087 585,366 $948,343 The activity rate for the Order Size activity cost pool under activity-based costing is closest to: 4,141 14, 105 18,246 Product E 4,141 850 5,550 Expected Activity Product NO 14, 105 950 5,250 Total 18,246 1,800 10,800
The graphs below represent cost behavior patterns that might occur in acompany's cost structure. The vertical axis represents total cost, and thehorizontal axis represents activity output. Required:For each of the following situations, choose the graph from the group a-1 that best illustrates the cost pattern involved. Also, for each situation,identify the driver that measures activity output. 1. The cost of power when a fixed fee of $500 per month is chargedplus an additional charge of $0.12 per kilowatt-hour used2. Commissions paid to sales representatives. Commissions arepaid at the rate of 5 percent of sales made up to total annual salesof $500,000, and 7 percent of sales above $500,000.3. A part purchased from an outside supplier costs $12 per part for the first 3,000 parts and $10 per part for all parts purchased inexcess of 3,000 units.4. The cost of surgical gloves, which are purchased in incrementsof 100 units (gloves come in boxes of 100 pairs).5. The cost of tuition at a…
LockTite Company produces two products, Pretty Safe (PS) and Virtually Impenetrable (VI). The following two tables give pertinent information about these products. Solve, a. What is the cost per unit of Pretty Safe if LockTite uses traditional overhead allocation based on number of units produced? b. What is the cost per unit of Pretty Safe if LockTite uses activity-based costing to allocate overhead?
Computing product costs in an ABC system The Alright Manufacturing Company in Rochester, Minnesota, assembles and tests electronic components used in smartphones. Consider the following data regarding component T24 (amounts are per unit): Requirements Complete the missing items for the two tables. Why might managers favor this ABC system instead of Alright’s older system, which allocated all manufacturing overhead costs on the basis of direct labor hours?
The Mortise Company has assembled the following data pertaining to certain costs that cannot be easily identified as either fixed or variable. Mortise has heard about a method of measuring cost functions called the high-low method and has decided to use it in this situation. Month Cost Hours January $40,000 3,600 February 38,500 3,000 March 36,280 3,300 April 38,000 3,500 May 69,850 5,850 June 45,000 4,250 a. What is the slope coefficient? b. What is the constant for the estimated cost equation? c. What is the estimated cost function for the above data? d. What is the estimated total cost at an operating level of 3,100 hours?
The controller at Wesson Company's manufacturing plant has provided you with the following information for the first quarter's operations: Direct materials Fixed manufacturing overhead costs Sales price Variable manufacturing overhead Direct labor Fixed marketing and administrative costs Units produced and sold during the quarter Variable marketing and administrative costs Required: a. Prepare a gross margin income statement. b. Prepare a contribution margin income statement. Complete this question by entering your answers Required A Required B Prepare a contribution margin income statement. Contribution Margin Income Statement
The graphs below represent cost behavior patterns that might occur in a company’s cost structure. The vertical axis represents total cost, and the horizontal axis represents activity output Required:For each of the following situations, choose the graph from the group a–1 that best illustrates the cost pattern involved. Also, for each situation, identify the driver that measures activity output.1. The cost of power when a fixed fee of $500 per month is charged plus an additional charge of $0.12 per kilowatt-hour used.2. Commissions paid to sales representatives. Commissions are paid at the rate of 5 percent of sales made up to total annual sales of $500,000, and 7 percent of sales above $500,000.3. A part purchased from an outside supplier costs $12 per part for the first 3,000 parts and $10 per part for all parts purchased in excess of 3,000 units.4. The cost of surgical gloves, which are purchased in increments of 100 units (gloves come in boxes of 100 pairs).5. The cost of tuition…
Check my work mode: This shows what is correct or incorrect for the work you have completed so far. It does not indicate compl 2. Compute the contribution margin per unit. [assume direct labor is a fixed cost] 3. Compute the contribution margin per welding hour. [assume direct labor is a fixed cost] 4. Assuming direct labor is a fixed cost: a. Determine the number of WVD drums (if any) that should be purchased and the number of WVD drums and/or bike frames (if any) that should be manufactured. b. What is the increase (decrease) in net operating income that would result from this plan over current operations? 5. Compute the contribution margin per unit. [assume direct labor is a variable cost] 6. Compute the contribution margin per welding hour. [assume direct labor is a variable cost] 7. Assuming direct labor is a variable cost: a. Determine the number of WVD drums (if any) that should be purchased and the number of WVD drums and/or bike frames (if any) that should be manufactured. b.…