Nobel Ltd is a wool coat manufacturer. It produced 80 units in September. The following cost information is available: •   Wool fabric: $150 per unit •   Depreciation of production equipment: $3,000 per month •   Research and development: $1,000 per month •   Wages of staff involved in cutting, sewing and finishing: $30 per unit •   Designers' salary: $23,000 per month •   Advertising costs: $900 per month •   Indirect material: $40 per unit •   Salary of factory supervisor: $16,000 per month What is the total prime costs for Nobel Ltd in September? a. 14,400 b. 12,000 c. 24,600 d. 22,200

The Rodgers Company makes 27,000 units of a certain component each year for use in one of its products. The cost per unit for the component at this level of activity is as follows: Direct materials. $4.20 Direct labor. $12.00 $5.80 Variable manufacturing overhead. Fixed manufacturing overhead $6.50 ****** Rodgers has received an offer from an outside supplier who is willing to provide 27,000 units of this component each year at a price of $25 per component. Assume that direct labor is a variable cost. None of the fixed manufacturing overhead would be avoidable if this component were purchased from the outside supplier. Assume that there is no other use for the capacity now being used to produce the component and the total fixed manufacturing overhead of the company would be unaffected by this decision. If Rodgers Company purchases the components rather than making them internally, what would be the impact on the company's annual net operating income? Select one: a. $94,500 increase b.…

Zippy Inc. manufactures a fuel additive, Surge, which has a stable selling price of $44 per drum. The company has been producing and selling 80,000 drums per month. In connection with your examination of Zippy's financial statements for the year ended September 30, management has asked you to review some computations made by Zippy's cost accountant. Your working papers disclose the following about the company's operations: Standard costs per drum of product manufactured: Materials: 8 gallons of chemicals @ $2. $16 1 empty drum. $17 Direct labor-1 hour. $10 Factory Overhead. $ 6 Costs and expenses during September: Chemicals: 645,000 gallons purchased at a cost of $1,140,000; 600,000 gallons used. Empty drums: 94,000 purchased at a cost of $94,000; 80,000 drums used. Direct labor: 81,000 hours worked at a cost of $816,480. Factory overhead: $768,000. REQUIRED: Calculate the following for September, using the formulas in Determination of Variances on pages 421–422 and 424 (Round unit…

Lenni Clothing Co. manufactures clothing in a small manufacturing facility. Manufacturing has 25 employees. Each employee presently provides 40 hours of productive labor per week. Information about a production week is as follows: Standard wage per hr. $12.00 Standard labor time per unit 12 min. Standard number of yds. of fabric per unit 5.0 yds. Standard price per yd. of fabric $5.00 Actual price per yd. of fabric $5.10 Actual yds. of fabric used during the week 26,200 yds. Number of units produced during the week 5,220 Actual wage per hr. $11.80 Actual hrs. for the week 1,000 hrs.

Genuine Spice Inc. began operations on January 1 of the current year. The company produces eight- ounce bottles of hand and body lotion called Eternal Beauty. The lotion is sold wholesale in 12-bottle cases for $100 per case. There is a selling commission of $20 per case. The January direct materials, direct labor, and factory overhead costs are as follows:

Seaside Company produces picture frames. During the year 190,000 picture frames were produced. Materials and labor standards for producing the picture frames are as follows:     Direct materials (2 pieces of wood @ $2.25) $4.50 Direct labor (2 hours @ $10) $20.00     Seaside purchased and used 400,000 pieces of wood at $2.00 each and its actual labor hours were 360,000 hours at a wage rate of $10.50.     Refer to Figure 10-5. What is the materials usage variance?     $112,500 F     $112,500 U     $45,000 F     $45,000 U

Norrell Novelties, Inc., produces 225,000 units of balls used in its pinball games each year. An outside supplier has offered to supply the pinballs for $27 each. The unit cost of manufacturing the pinballs is calculated as follows: Direct materials $10.00 Direct labor 12.00 Variable overhead (power) 8.00 Fixed overhead 5.00 Total unit cost $40.00 Overhead is applied on the basis of machine hours; the pinballs require 120,000 machine hours per year. Assuming that none of the fixed costs are avoidable, which of the following alternatives is most cost effective? a.Norrell Novelties, Inc., should buy the pinballs as the analysis shows a $275,000 advantage in favor of buying the part from outside. b.Norrell Novelties, Inc., should make the pinballs as the analysis shows a $150,000 advantage in favor of making the part in house. c.Norrell Novelties, Inc., should make the pinballs as the fixed costs of $10 are not avoidable. d.Norrell Novelties, Inc., should buy the pinballs as…

Laughton Corporation makes two styles of cases for compact disks, the standard case and the deluxe case. The company has assigned $210,000 in monthly manufacturing overhead to three cost pools as follows: $90,000 to machining costs, $60,000 to production set-up costs, and $60,000 to inspection costs. Additional monthly data are provided below:Standard Case Deluxe CaseSales revenue $ 480,000 $ 189,000Direct materials $ 135,000 $ 45,000Direct labour $ 105,000 $ 30,000Machine hours 24,000 6,000Production runs 7 12Units produced and sold 33,000 3,000The first and last unit in each production run is inspected for quality control purposes. Inspection costs are allocated to the products based on the number of inspections required. Machining costs are allocated to products using machine hours as an activity base. Set-up costs are allocated to products based on the number of production runs each product line requires.Required:(A) Allocate manufacturing overhead from the activity cost pools to…

Marquette Manufacturing produces “invisible” electric dog fences, sold through retail locations nationwide. The selling price of the fence is $150 per unit. The cost to manufacture and market the fences is shown below. These figures represent the cost at the company’s normal volume of 3,000 units per month. Unit Manufacturing Costs         Variable materials  $   15.00     Variable labor  $   17.50     Variable overhead  $   12.50     Fixed overhead  $   16.00   Total unit manufacturing costs      $   61.00 Unit Marketing Costs         Variable  $     12.00     Fixed overhead  $     17.00   Total unit marketing costs      $     29.00   Total unit costs    $     90.00 so here are my two questions: (these questions have no connection whatsoever. They are to be answered individually)  At the end of the year the production manager is taking inventory and finds 600 units of an older model of invisible fencing that the company no longer manufactures. These obsolete…

Bird’s Eye View manufactures satellite dishes used in residential and commercial installations for satellite-broadcasted television. For each unit, the following costs apply: $50 for direct material, $100 for direct labor, and $60 for variable overhead. The company’s annual fixed overhead cost is $1,800,000; it uses expected capacity of 30,000 units produced as the basis for applying fixed overhead to products. A commission of 10 percent of the selling price is paid on each unit sold. Annual fixed selling and administrative expenses are $432,000. The following additional information is available:   Year 1 Year2 Selling price per unit $500 $500 Number of units sold 24,000 28,800 Number of units produced 30,000 26,400 Beginning inventory (units) 18,000 24,000 Ending inventory (units) 24,000 ? a. Prepare pre-tax income statements under absorption and variable costing for Year 1 and Year 2, with any volume variance being charged to Cost of Goods Sold.