IYour Company produces a single product. The cost of producing and selling a single unit of thisproduct at the company's normal activity level of 40,000 units per month is as follows:Direct materials.Direct labor$53.60$5.30$1.40Variable manufacturing overheadFixed manufacturing overhead..............$13.20Variable selling and administrative expense.... $1.60Fixed selling and administrative expense.... .$9.10The normal selling price of the product is $91.60 per unit. An order has been received from anoverseas customer for 3,000 units to be delivered this month at a special discounted price. Thisorder would have no effect on the company's normal sales and would not change the totalamount of the company's fixed costs. The variable selling and administrative expense would be$1.00 less per unit on this order than on normal sales. Direct labor is a variable cost in thiscompany.Suppose there is ample idle capacity to produce the units required by the overseas customer andthe special discounted price on the special order is $81.90 per unit. By how much would thisspecial order increase (decrease) the company's net operating income for the month?Con(1-2

Step 1: Determining the Change in Operating Income Due to a Special Order:Firms usually accept…

Answered: I Your Company produces a single…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 2PB: The following product costs are available for Kellee Company on the production of eyeglass frames:...

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The following product costs are available for Kellee Company on the production of eyeglass frames: direct materials, $32,125; direct labor, $23.50; manufacturing overhead, applied at 225% of direct labor cost; selling expenses, $22,225; and administrative expenses, $31,125. The direct labor hours worked for the month are 3,200 hours. A. What are the prime costs? B. What are the conversion costs? C. What is the total product cost? D. What is the total period cost? E. If 6.425 equivalent units are produced, what is the equivalent material cost per unit? F. What is the equivalent conversion cost per unit?
The following product Costs are available for Haworth Company on the production of chairs: direct materials, $15,500; direct labor, $22.000; manufacturing overhead, $16.500; selling expenses, $6,900; and administrative expenses, $15,200. What are the prime costs? What are the conversion costs? What is the total product cost? What is the total period cost? If 7,750 equivalent units are produced, what is the equivalent material cost per unit? If 22,000 equivalent units are produced, what is the equivalent conversion cost per unit?
Cool Pool has these costs associated with production of 20,000 units of accessory products: direct materials, $70; direct labor, $110; variable manufacturing overhead, $45; total fixed manufacturing overhead, $800,000. What is the cost per unit under both the variable and absorption methods?
Steeler Towel Company estimates its overhead to be $250,000. It expects to have 100,000 direct labor hours costing $2,500,000 in labor and utilizing 12,500 machine hours. Calculate the predetermined overhead rate using: A. Direct labor hours B. Direct labor dollars C. Machine hours
I Your Company produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 40,000 units per month is as follows: Direct materials Direct labor $53.60 $5.30 Variable manufacturing overhead.......$1.40 Fixed manufacturing overhead............$13.20 Variable selling and administrative expense..... S$1.60 Fixed selling and administrative expense...........$59.10 The normal selling price of the product is $91.60 per unit. An order has been received from an overseas customer for 3,000 units to be delivered this month at a special discounted price. This order would have no effect on the company's normal sales and would not change the total amount of the company's fixed costs. The variable selling and administrative expense would be $1.00 less per unit on this order than on normal sales. Direct labor is a variable cost in this company. Suppose there is ample idle capacity to produce the units required by the overseas…
Delta Company produces a single product. The cost of producing and selling a single unit of this productat the company’s normal activity level of 60,000 units per year is:Direct materials ................................................... $5.10Direct labor .......................................................... $3.80Variable manufacturing overhead ....................... $1.00Fixed manufacturing overhead ........................... $4.20Variable selling and administrative expense ....... $1.50Fixed selling and administrative expense ........... $2.40The normal selling price is $21 per unit. The company’s capacity is 75,000 units per year. An order hasbeen received from a mail-order house for 15,000 units at a special price of $14.00 per unit. This orderwould not affect regular sales.Required:1. If the order is accepted, by how much will annual profits be increased or decreased? (The order willnot change the company’s total fixed costs.)2. Assume the company has 1,000 units of this…
Delta Company produces a single product. The cost of producing and selling a single unit ofthis product at the company’s normal activity level of 60,000 units per year is: 05 Direct materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $5.10Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3.80Variable manufacturing overhead . . . . . . . . . . . . . . . . . . . $1.00Fixed manufacturing overhead . . . . . . . . . . . . . . . . . . . . . $4.20Variable selling and administrative expense . . . . . . . . . . . $1.50Fixed selling and administrative expense . . . . . . . . . . . . . $2.40 The normal selling price is $21 per unit. The company’s capacity is 75,000 units per year.An orderhas been received from a mail-order house for 15,000 units at a special price of $14.00 per unit. Thisorder would not affect regular sales.Required: Assume the company has 1,000 units of this product left over from last year that areinferior to the…
W A Corporation produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 40,000 units per month is as follows: Direct Materials.. $18.00 Direct Labor... Variable Manufacturing OH... Fixed Manufacturing OH. Variable S&A... Fixed S&A.. $6.80 Q. What is the minimum price A. $ $1.90 $5.10 $2.40 $11.60 The normal selling price of the product is $49.1 per unit. (16 An order has been received from an overseas customer for 1,000 units to be delivered this month at a special discounted price. This order would not change the total amount of the Company's fixed costs. The variable selling and administrative expense would be $0.10 less per unit on this order than on normal sales. Direct labor is a variable cost in this company. Suppose there is not enough idle capacity to produce all the units for the overseas customer and accepting the special order would require cutting back on production of 100 units for regular…
DMC produces on average 7,500 units - 12,500 units. The following unit costs are incurred for producing and selling 10,000 units. Variable manufacturing overhead . . . . . . . . . . . . . $3 Fixed manufacturing overhead . . . . . . . . . . . . . . . $8 Direct materials . . . . . . . . . . . . . . . . . . . . . . . . . . $12 Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $7 Fixed selling expense . . . . . . . . . . . . . . . . . . . . . . $6 Fixed administrative expense . . . . . . . . . . . . . . . . $4 Sales commissions . . . . . . . . . . . . . . . . . . . . . . . . $2 Variable administrative expense . . . . . . . . . . . . . . $1 1. For 10,000 units, find product costs & period cost? 2. What will be the variable cost per unit for 8,000 units & for 12,500 units? 3. What will be the total Variable cost for 8,000 units & for 12,500 units? 4. What will be the average fixed manufacturing cost per unit for 8,000 units & for 12,500 units? 5. What…
Make or by product.Montrose incorportaion manufactures part 345 for use in one of its main products. normal annual production for part 345 is 100,000 units. the cost for 100 units lot for the part follows: Direct direct labor............100 Factory overhead: material.…….…….……....$260 variable............ 120 fixed...............160 total cost per 100 units....640 kalispel incorporation has offered to sell Montrose all 100,000 units it will need during coming year for $600 per 100 units. if montrose accepts the offer from kalispiel, the facilities used to manufacure part 345 can be used in production of part 789. this change would save montrose $90000 in fixed cost related to the rental of capacity neccessary to produce part 789. in addition a $50000 cost item included in factory overhead which specifically related to part 345( rental of special equipment not usable in manufacturing of other products) would be eliminated. Required. determine whether or not Montrose incorporataion make…
Your Company produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 40,000 units per month is as follows: $18.00 $6.80 $2.40 $11.60 $1.90 $5.10 Direct materials. Direct labor. Variable manufacturing overhead.. Fixed manufacturing overhead. Variable selling & administrative expense. Fixed selling & administrative expense . The normal selling price of the product is $51.10 per unit. An order has beleh received from an overseas customer for 2,000 units to be delivered this month at a special discounted price of $41.60 per unit. This order would have no effect on the company's normal sales and would not change the total amount of the company's fixed costs. The variable selling and administrative expense would be $0.50 less per unit on this order than on normal sales. There is ample idle (excess) capacity to produce the units required by the overseas customer. By how much would this special order increase…
Delta Company produces a single product. The cost of producing and selling a single unit of thisproduct at the company’s normal activity level of 60,000 units per year is:Direct materials $5.10Direct labor $3.80Variable manufacturing overhead $1.00Fixed manufacturing overhead $4.20Variable selling and administrative expense $1.50Fixed selling and administrative expense $2.40The normal selling price is $21 per unit. The company’s capacity is 75,000 units per year. Anorder has been received from a mail-order house for 15,000 units at a special price of $14.00 perunit. This order would not affect regular sales or the company’s total fixed costs.Required:What is the financial advantage (disadvantage) of accepting the special order?

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