Duty-Related Costs of Locating in an FTZ Aranda Company is an import-export company that relocated earlier this year in a foreign trade zone (FTZ) in a southwestern city. The company imports $760,000 of fabric from overseas for resale to clothing companies located in the United States. Aranda purchases and receives the fabric about four months before it is sold and shipped to customers; customers are billed and pay in two months. Duty is assessed at 15 percent of cost, and Aranda faces a 6 percent carrying cost. Required: 1. What is the amount of duty paid by Aranda last year (before locating in the FTZ) and for this year after relocating to the FTZ? Duty Last Year This Year 114,000 ✔ $114,000 ✔ 2. What is the amount of carrying cost associated with the duty paid by Aranda last year and for this year after relocating to the FTZ? Last Year This Year Carrying cost of duty 3,420 22,800 X 3. What is the total duty-related cost for Aranda last year and for this year after relocating to the FTZ? Last Year This Year Total duty-related cost $ 117,420 ✓ 4. What is the total savings on duty and carrving cost attributable to locating in an FTZ? Check My Work Previous Next

Duty-Related Costs of Locating in an FTZ Aranda Company is an import-export company that relocated earlier this year in a foreign trade zone (FTZ) in a southwestern city. The company imports $760,000 of fabric from overseas for resale to clothing companies located in the United States. Aranda purchases and receives the fabric about four months before it is sold and shipped to customers; customers are billed and pay in two months. Duty is assessed at 15 percent of cost, and Aranda faces a 6 percent carrying cost. Required: 1. What is the amount of duty paid by Aranda last year (before locating in the FTZ) and for this year after relocating to the FTZ? Duty Last Year This Year 114,000 ✔ $114,000 ✔ 2. What is the amount of carrying cost associated with the duty paid by Aranda last year and for this year after relocating to the FTZ? Last Year This Year Carrying cost of duty 3,420 22,800 X 3. What is the total duty-related cost for Aranda last year and for this year after relocating to the FTZ? Last Year This Year Total duty-related cost $ 117,420 ✓ 4. What is the total savings on duty and carrving cost attributable to locating in an FTZ? Check My Work Previous Next

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter17: Activity Resource Usage Model And Tactical Decision Making

Section: Chapter Questions

Problem 6E: Elliott, Inc., has four salaried clerks to process purchase orders. Each clerk is paid a salary of...

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Duty-Related Costs of Locating in an FTZ Aranda Company is an import-export company that relocated earlier this year in a foreign trade zone (PTZ) in a southwestern city. The company imports $760,000 of fabric from overseas for resale to dothing companies located in the United States. Aranda purchases and receives the fabric about four months before it is sold and shipped to customers; customers are billed and pay in two months. Duty is assessed at 15 percent of cost, and Aranda faces a 6 percent carrying cost Required: 1. What is the amount of duty paid by Aranda last year (before locating in the FTZ) and for this year after relocating to the FTZ? Last Year This Year Duty 2. What is the amount of carrying cost associated with the duty paid by Aranda last year and for this year after relocating to the FTZ? Last Year This Year Carrying cost of duty 3. What is the total duty-related cost for Aranda last year and for this year after relocating to the FTZ? Last Year This Year Total duty…
Aranda Company is an import-export company that relocated earlier this year in a foreign trade zone (FTZ) in a southwestern city. The company imports $760,000 of fabric from overseas for resale to clothing companies located in the United States. Aranda purchases and receives the fabric about four months before it is sold and shipped to customers; customers are billed and pay in two months. Duty is assessed at 15 percent of cost, and Aranda faces a 6 percent carrying cost. Required: 1. What is the amount of duty paid by Aranda last year (before locating in the FTZ) and for this year after relocating to the FTZ? 2. What is the amount of carrying cost associated with the duty paid by Aranda last year and for this year after relocating to the FTZ? 3. What is the total duty-related cost for Aranda last year and for this year after relocating to the FTZ? 4. What is the total savings on duty and carrying cost attributable to locating in an FTZ? 5. What if some of the fabric turned out to be…
Aranda Company is an import-export company that relocated earlier this year in a foreign trade zone (FTZ) in a southwestern city. The company imports $760,000 of fabric from overseas for resale to clothing companies located in the United States. Aranda purchases and receives the fabric about four months before it is sold and shipped to customers; customers are billed and pay in two months. Duty is assessed at 15 percent of cost, and Aranda faces a 6 percent carrying cost. $1 = Y106.0 $1 = E0.84 Required: 1. What is the cost of the Y6,890,000 in dollars? 2. How many euros will Chinook receive from the German company in payment for the finished product? 3. What if the exchange rate of dollars for yen was $1 = Y108? What is the cost of the Y6,890,000 in dollars (rounded to the nearest dollar)?
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Zachary manufacturing company makes tents that it sells directly to camping enthusiasts through a mail-order marketing program. The company pays a quality control expert $121600 per year to inspect completed tents before they are shipped to customers. assume that the company completed 1,530 tents in January and 1,240 tents in February. For the entire year, the company expects to produce 19000 tents. required c) If the cost objective is to determine the cost per tent, is the expert's salary a direct or an indirect cost? D) How much of the expert's salary should be allocated to tents produced in January and February? If the cost objective is to determine the cost per tent is the expert's salary a direct or an indirect cost?
Munoz Manufacturing Company makes tents that it sells directly to camping enthusiasts through a mail-order marketing program. The company pays a quality control expert $77,050 per year to inspect completed tents before they are shipped to customers. Assume that the company completed 1,690 tents in January and 1,300 tents in February. For the entire year, the company expects to produce 11,500 tents. If the cost objective is to determine the cost per tent, is the expert’s salary a direct or an indirect cost? How much of the expert’s salary should be allocated to tents produced in January and February?
Adams Air is a large airline company that pays a customer relations representative $16,425 per month. The representative, who processed 1,100 customer complaints in January and 1,360 complaints in February, is expected to process 21,900 customer complaints during the year. Required Determine the total cost of processing customer complaints in January and in February.
Munoz Air is a large airline company that pays a customer relations representative $3,900 per month. The representative, who processed 1,180 customer complaints in January and 1,370 complaints in February, is expected to process 23,400 customer complaints during the year.Required Determine the total cost of processing customer complaints in January and in February.
Wallis Company produces circuit boards in a foreign country that imposes a 15 percent VAT. This year, Wallis manufactured 8.2 million boards at a $6.40 material cost per unit. Wallis's labor and overhead added $1.28 to the cost per unit. Wallis sold the boards to various customers for $9.60 per unit for a net profit of $1.92 per unit. Required: How much VAT does Wallis Company owe? Note: Enter your answer in dollars not in millions of dollars. VAT $ 11,808,000
Aziz Company sells two types of products, basic and deluxe. The company provides technical support for users of its products at an expected cost of $270,000 per year. The company expects to process 10,000 customer service calls per year. Required: 1. Determine the company's cost of technical support per customer service call. 2. During the month of January, Aziz received 570 calls for customer service on its deluxe model and 270 calls for customer service on its basic model. Assign technical support costs to each model using activity-based costing (ABC). Assign technical support costs to each model Model Activity Rate Deluxe Basic Cost driver quantity incurred Allocated Cost
Elliott, Inc., has four salaried clerks to process purchase orders. Each clerk is paid a salary of 25,750 and is capable of processing as many as 6,500 purchase orders per year. Each clerk uses a PC and laser printer in processing orders. Time available on each PC system is sufficient to process 6,500 orders per year. The cost of each PC system is 1,100 per year. In addition to the salaries, Elliott spends 27,560 for forms, postage, and other supplies (assuming 26,000 purchase orders are processed). During the year, 25,350 orders were processed. Required: 1. Classify the resources associated with purchasing as (1) flexible or (2) committed. 2. Compute the total activity availability, and break this into activity usage and unused activity. 3. Calculate the total cost of resources supplied (activity cost), and break this into the cost of activity used and the cost of unused activity. 4. (a) Suppose that a large special order will cause an additional 500 purchase orders. What purchasing costs are relevant? By how much will purchasing costs increase if the order is accepted? (b) Suppose that the special order causes 700 additional purchase orders. How will your answer to (a) change?
Production workers for Zachary Manufacturing Company provided 4,300 hours of labor in January and 3,400 hours in February. The company, whose operation is labor intensive, expects to use 48,300 hours of labor during the year. Zachary paid a $111,090 annual premium on July 1 of the prior year for an insurance policy that covers the manufacturing facility for the following 12 months. Required Based on this information, how much of the insurance cost should be allocated to the products made in January and to those made in February? (Do not round intermediate calculations.)