Kmu Edlie Accessories (EA) makes travel bags, both for sale under their own label ("Branded") and for other resellers to put their label onthe bags ("Private-Label"). The bags sold through the two channels are similar, but they differ slightly in the quality of materials anddetail in the manufacturing process.The manufacturing plant at EA has two departments. Department A-101 was the original manufacturing facility and many of themachines are original. Department A-102 is new, with state-of-the-art equipment. The new equipment facilitates the additional caretaken with the Branded product.The following information presents financial results for the two models from last year:Sales revenueDirect materialDirect laborManufacturing overhead.Department A-101PrivateLabelBrandedTotal$ 774,000 $ 504,000 $ 1,278,000222,000161,400150,000101,400a. Using plantwide allocationb. Using department allocationDepartment A-102Total overheadThe product costing system at EA allocates manufacturing overhead on the basis of direct labor costs.383,400251,400$ 207,600244,920$ 452,520Required:a. Compute the profit or loss for each product using plantwide allocation.b. Compute the profit or loss for each product using department allocation...Note: For all requirements, loss amounts should be indicated by a minus sign. Do not round intermediate calculations. Enteryour answers rounded to the nearest whole number.Profit or LossPrivate LabelBranded

In plant wide allocation , the pre determined overhead rate is single rate applied to the entire…

Answered: ng process. at EA has two departments.…

ng process. at EA has two departments. Department A-101 was epartment A-102 is new, with state-of-the-art equip product. n presents financial results for the two models from

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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Edlie Accessories (EA) makes travel bags, both for sale under their own label ("Branded") and for other resellers to put their label on the bags ("Private-Label"). The bags sold through the two channels are similar, but they differ slightly in the quality of materials and detail in the manufacturing process. The manufacturing plant at EA has two departments. Department A-101 was the original manufacturing facility and many of the machines are original. Department A-102 is new, with state-of-the-art equipment. The new equipment facilitates the additional care taken with the Branded product. The following information presents financial results for the two models from last year: Sales revenue Direct material Direct labor Manufacturing overhead Department A-101 Department A-102 Total overhead Private Label Branded Total $1,328,000 170,400 110,400 $ 784,000 $544,000 232,000 160,000 402,400 270,400 $ 217,600 269,120 $ 486,720 The product costing system at EA allocates manufacturing overhead…
Textile Crafts Company (TCC) sells craft kits and supplies to retail outlets and through online sites such as Etsy.com. Some of the items are manufactured by TCC, while others are purchased for resale. For the products it manufactures, the company currently bases its selling prices on a product-costing system that accounts for direct material, direct labor, and the associated overhead costs. In addition to these product costs, TCC incurs substantial selling costs, and Roger Jackson, controller, has suggested that these selling costs should be included in the product pricing structure. After studying the costs incurred over the past two years for one of its products, skeins of knitting yarn, Jackson has selected four categories of selling costs and chosen cost drivers for each of these costs. The selling costs actually incurred during the past year and the cost drivers are as follows: Cost Category Amount Cost Driver Sales commissions $ 462,000 Boxes of yarn sold to retail stores…
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The Mandalorian Company has two divisions, Production and Marketing. Production manufactures Beskar Head Armour for Knights of the Old Republic, which it sells to both the Marketing Division and to other retailers (the latter under a different brand name). Marketing operates several small armour stores in shopping centers throughout Corruscant. Marketing sells both Beskar Head Armour and other brands. Relevant facts for Production are as follows: Sales Price to Outsiders.............................................................$28.50 per Pcs Variable Cost to Produce...........................................................$18.00 per Pcs Fixed Costs ................................................................................$100,000 per Month The following data pertain to the sale of Mandalorian Company Beskar Head Armour by Marketing: Marketing is operating far below its capacity. Sales…
The Mandalorian Company has two divisions, Production and Marketing. Production manufactures Beskar Head Armour for Knights of the Old Republic, which it sells to both the Marketing Division and to other retailers (the latter under a different brand name). Marketing operates several small armour stores in shopping centers throughout Corruscant. Marketing sells both Beskar Head Armour and other brands. Relevant facts for Production are as follows: Sales Price to Outsiders.............................................................$28.50 per Pcs Variable Cost to Produce...........................................................$18.00 per Pcs Fixed Costs ................................................................................$100,000 per Month The following data pertain to the sale of Mandalorian Company Beskar Head Armour by Marketing: Marketing is operating far below its capacity. Sales…
World View Outfitters operates a large outdoor clothing and equipment store with three main product lines: clothing, equipment, and shoes. World View Outfitters operates at capacity and allocates selling, general, and administration (S, G & A) costs to each product line using the cost of merchandise of each product line. The company wants to optimize the pricing and cost management of each product line and is wondering if its accounting system is providing it with the best information for making such decisions. Store manager Abe Barry gathers the following information regarding the three product lines: For2017,World View Outfitters budgets the following selling, general, and administration costs: 1. Suppose World View Outfitters uses cost of merchandise to allocate all S, G & A costs. Prepare budgeted product-line and total company income statements. 2. Identify an improved method for allocating costs to the three product lines. Explain. Use the…