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f. Short-Term Product-Mix Decision DVD Production Company produces two basic types of
video games, Flash and Clash. Pertinent data for DVD Production Company follow:
*Based on direct labor hours: 4 direct labor hours (DLHs) per unit of Flash and 2 DLHs per
unit of Clash.
Flash Clash
Sales price $250 $140
Costs
Direct materials 50 25
Direct labor (@ $25/hr.) 100 50
Variable factory
Fixed factory overhead* 20 10
Marketing costs (all fixed) 10 10
Total costs $230 $120
Operating profit $ 20 $ 20
The DVD game craze is at its height so that either Flash or Clash alone can be sold to keep the plant
operating at full capacity. However, labor capacity in the plant is insufficient to meet the combined
demand for both games. Flash and Clash are processed through the same production departments.
Required
1. What is the meaning and importance of the statement that “Flash and Clash are processed through the
same production departments”?
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- Relevant Range and Fixed and Variable Costs Vogel Inc. manufactures memory chips for electronic toys within a relevant range of 100,800 to 158,400 memory chips per year. Within this range, the following partially completed manufacturing cost schedule has been prepared: Components produced 100,800 123,200 158,400 Total costs: Total variable costs . . . . . . . . . $40,320 (d) (j) Total fixed costs . . . . . . . . . . . . 44,352 (e) (k) Total costs . . . . . . . . . . . . . . . . . $84,672 (f) (l) Cost per unit: Variable cost per unit . . . . . . . (a) (g) (m) Fixed cost per unit . . . . . . . . . . (b) (h) (n) Total cost per unit . . . . . . . . . . (c) (i) (o) Complete the cost schedule below. When computing the cost per unit, round to two decimal places. Round all other values to the nearest dollar. Cost Report Components produced 100,800 123,200 158,400 Total costs: Total variable costs $40,320 (d)…arrow_forwardPlease do not give solution in image format thankuarrow_forwardRelevant Range and Fixed and Variable Costs Vogel Inc. manufactures memory chips for electronic toys within a relevant range of 61,600 to 100,800 memory chips per year. Within this range, the following partially completed manufacturing cost schedule has been prepared: Components produced 61,600 79,200 100,800 Total costs: Total variable costs . . . . . . . . . $19,712 (d) (j) Total fixed costs . . . . . . . . . . . . 22,176 (e) (k) Total costs . . . . . . . . . . . . . . . . . $41,888 (f) (l) Cost per unit: Variable cost per unit . . . . . . . (a) (g) (m) Fixed cost per unit . . . . . . . . . . (b) (h) (n) Total cost per unit . . . . . . . . . . (c) (i) (o) Complete the cost schedule below. When computing the cost per unit, round to two decimal places. Round all other values to the nearest dollar. Cost Report Components produced 61,600 79,200 100,800 Total costs: Total variable costs $19,712 (d)…arrow_forward
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