Mighty Muffler, Incorporated, operates an automobile service facility that specializes in replacing mufflers on compact cars. The following table shows the costs incurred during a month when 900 mufflers were replaced. Note: Round "cost per muffler" to 2 decimal places. Required: Fill in the missing amounts. Total costs: Fixed costs Variable costs Total costs Cost per muffler replacement: Fixed cost Variable cost Total cost per muffler replacement $ 800 Muffler Replacements 103.50 $ $ $ $ 900 82,800 46,800 129,600 $ 92.00 52.00 144.00 $ 1000 82.80 134.80

Mighty Muffler, Incorporated, operates an automobile service facility that specializes in replacing mufflers on compact cars. The following table shows the costs incurred during a month when 900 mufflers were replaced. Note: Round "cost per muffler" to 2 decimal places. Required: Fill in the missing amounts. Total costs: Fixed costs Variable costs Total costs Cost per muffler replacement: Fixed cost Variable cost Total cost per muffler replacement $ 800 Muffler Replacements 103.50 $ $ $ $ 900 82,800 46,800 129,600 $ 92.00 52.00 144.00 $ 1000 82.80 134.80

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Each year, Giada Company produces 20,000 units of a component part used in tablet computers. An outside supplier has offered to supply the part for $1.39. The unit cost is: Direct materials $0.83 Direct labor 0.34 Variable overhead 0.13 Fixed overhead 2.55 Total unit cost $3.85 1. What are the alternatives for Giada Company? a. Make the part in house b.Buy the part externally c.Make the part in house or buy the part externally d.None 2. Assume that none of the fixed cost is avoidable. List the relevant cost(s) of internal production. a.Direct materials, direct labor and variable and fixed overhead b.Direct materials, direct labor and variable overhead c.Direct materials, direct labor and fixed overhead d.None List the relevant cost(s) of external purchase. a.Purchase price b.Sales price c.Material price d.None 3. Which alternative is more cost effective and by how much? a. Making the part in house b. Buying the part from the external supplier by $___________ 4. What if…
Muffler Incorporated produces floor mats for cars and trucks. The owner, Kenneth Muffler, asked you to assist him in estimating his maintenance costs. Together, Mr. Muffler and you determined that the single best cost driver for maintenance costs was machine hours. Below are data from the previous fiscal year for maintenance expense and machine hours: Month 1 2 3 4 5 6 7 8 9 10 11 12 Multiple Choice O O о Maintenance Expense $ 3,440 O O Using the high-low method, total monthly fixed cost is calculated to be (Round final answer to full dollar amount with no decimal places): $212. $153. $520. $462. 3,630 3,810 3,940 3,940 4,320 3,930 $280. 3,740 3,460 3,080 2,940 3,200 Machine Hours 2,360 2,460 2,560 2,590 2,440 2,600 2,580 2,550 2,370 2,240 1,670 2,230
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Lean Mfg: Vintage Audio Inc
Classify Costs Following is a list of various costs incurred in producing replacement automobile parts. With respect to the production and sale of these auto parts, classify each cost as variable, fixed, or mixed. 1. Cost of labor for hourly workers Fixed 2. Factory cleaning costs, $6,000 per month Mixed 3. Hourly wages of machine operators Variable 4. Computer chip (purchased from a vendor) 5. Electricity costs, $0.20 per kilowatt-hour 6. Metal 7. Salary of plant manager 8. Property taxes, $165,000 per year on factory building and equipment 9. Plastic 10. Oil used in manufacturing equipment 11. Rent on warehouse, $10,000 per month plus $25 per square foot of storage used 12. Property insurance premiums, $3,600 per month plus $0.01 for each dollar of property over $1,200,000 13. Straight-line depreciation on the production equipment 14. Pension cost, $1.00 per employee hour on the job 15. Packaging
Zion Manufacturing had always made its components in-house. However, Bryce Component Works had recently offered to supply one component, K2, at a price of $13 each. Zion uses 4,400 units of Component K2 each year. The cost per unit of this component is as follows: Direct materials Direct labor Variable overhead Fixed overhead Total $7.84 2.84 1.67 4.00 $16.35 The fixed overhead is an allocated expense; none of it would be eliminated if production of Component K2 stopped. Required: 1. What are the alternatives facing Zion Manufacturing with respect to production of Component K2? 2. List the relevant costs for each alternative. If required, round your answers to the nearest cent. Total Relevant Cost Make per unit Buy per unit Differential Cost to Make per unit
Please help on all 3 requirements
Are the fixed costs as well as the 'other variable costs" included in the calculations of total overhead?
The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow: Total $ 932,000 471,000 461,000 Dirt Bikes $ 265,000 118,000 147,000 69,700 44,000 115,700 186,400 415,800 $ 45,200 Mountain Bikes Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses: Advertising, traceable Depreciation of special equipment. Salaries of product-line managers. Allocated common fixed expenses* Total fixed expenses Net operating income (loss) *Allocated on the basis of sales dollars. Management is concerned about the continued losses shown by the racing bikes and wants a recommendation as to whether or not the line should be discontinued. The special equipment used to produce racing bikes has no resale value and does not wear out. $ 408,000 200,000 208,000 Racing Bikes $ 259,000 153,000 106,000 9,000 40,300 20,400 20,900 8,000 15,100 40,700 38,400 36,600 53,000 81,600 51,800…
Laser Cast Inc. manufactures color laser printers. Model J20 presently sells for $325 and has a product cost of $260, as follows: Line Item Description Amount Direct materials $190 Direct labor 50 Factory overhead 20 Total $260 It is estimated that the competitive selling price for color laser printers of this type will drop to $310 next year. Laser Cast has established a target cost to maintain its historical markup percentage on product cost. Engineers have provided the following cost-reduction ideas: 1. Purchase a plastic printer cover with snap-on assembly, rather than with screws. This will reduce the amount of direct labor by 9 minutes per unit.2. Add an inspection step that will add six minutes per unit of direct labor but reduce the materials cost by $7 per unit.3. Decrease the cycle time of the injection molding machine from four minutes to three minutes per part. Thirty percent of the direct labor and 45% of the factory overhead are related to running injection…
A lean business incurs $45 in raw materials costs and $75 in conversion costs to produce an office chair. Each chair is sold for $170. In the current period, the business produced 500 units and sold 470 units. Prepare the necessary journal entries following lean accounting. Assume actual conversion costs equal applied conversion costs.