Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN: 9781305970663
Author: Don R. Hansen, Maryanne M. Mowen
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution
Trending nowThis is a popular solution!
Step by stepSolved in 2 steps
Knowledge Booster
Similar questions
- Rahularrow_forwardg.0arrow_forwardTwo alternatives are under consideration for a tapered fastening pin. Either design will serve the purpose and will involve the same material and manufacturing cost except for the lathe and grinder operations. Design A will require 16 hours of lathe time and 4.5 hours of grinder time per 1,000 units. Design B will require 7 hours of lathe time and 12 hours of grinder time per 1,000 units. The operating cost of the lathe including labor is ₱200 per hour. The operating cost of the grinder including labor is ₱150per hour. Which design should be adopted if 100,000 units are required per year and what is the economic advantage of the best alternative?arrow_forward
- In connection with surfacing a new highway, a contractor has a choice of two sites on which to set up the mixing plant equipment. The contractor estimates that it will cost P51.75 per cubic meter per kilometer to haul the asphalt paving material from the mixing plant to the job site. If site B is selected, there will be an added charge of P600 per day for a flagman and it needs 2 flagman. The job requires 50,000 cubic meters of mixed asphalt paving material. It is estimated that four months (17 weeks of five working days per week) will be required for the job. Cost Factors Site A Site B Average hauling distance 6 km 4.3 km Monthly rental of site P45,000 P225,000 Cost to setup and remove equipment P675,000 P1,125,000 Hauling expense P51.75/ Cu.m/km P51.75/ Cu.m/km a) Compare the two sites in terms of their fixed, variable, and total costs. b) For the selected site, how much profit can be made if it is paid P362.25 per cubic meter delivered to the job site? (solution to a) Fixed Costs…arrow_forwardShrewsbury Technologies, which manufactures high-technology instruments for spacecraft, is considering the sale of a navigational unit to a private company that wishes to launch its own communications satellite. The company plans to purchase 8 units, although it would also consider buying 16 units. Shrewsbury has started a chart relating labor time required to units produced: Unit Produced (X) Time Required to Produce the Xth Unit 1 18,000 hours 2 14,400 hours 4 11,520 hours 8 ? 16 ? Questions: Compute the labor time required to produce 8 and 16 units. Assume that labor time costs $153 per hour. Compare the cost of producing the 1st unit to the cost of producing the 16th unit. What is the percentage of the cost of the 16th unit to the cost of the 1st unit?arrow_forwardShrewsbury Technologies, which manufactures high-technology instruments for spacecraft, is considering the sale of a navigational unit to a private company that wishes to launch its own communications satellite. The company plans to purchase 8 units, although it would also consider buying 16 units. Shrewsbury has started a chart relating labor time required to units produced: Unit Produced (X) Time Required to Produce the Xth Unit 1 5,000 hours 2 4,500 hours 4 4,050 hours 8 ? 16 ? Required: Compute the labor time required to produce 8 and 16 units. Assume that labor time costs $140 per hour. Compare the cost of producing the 1st unit to the cost of producing the 16th unit. What is the percentage of the cost of the 16th unit to the cost of the 1st unit?arrow_forward
- Shrewsbury Technologies, which manufactures high-technology instruments for spacecraft, is considering the sale of a navigational unit to a private company that wishes to launch its own communications satellite. The company plans to purchase 8 units, although it would also consider buying 16 units. Shrewsbury has started a chart relating labor time required to units produced: Unit Produced (X) Time Required to Produce the Xth Unit1 5,000 hours2 4,500 hours4 4,050 hours8 ?16 ? Required: Compute the labor time required to produce 8 and 16 units. Assume that labor time costs $140 per hour. Compare the cost of producing the 1st unit to the cost of producing the 16th unit. What is the percentage of the cost of the 16th unit to the cost of the 1st unit?arrow_forwardJan and Mia Co. Ltd has been invited to tender for a contract. It is to produce 10,000 metres of an electrical cable in which the business specialises. The estimating department of the business has produced the following information relating to the contract: • Materials: The cable will require a steel core, which the business buys in. The steel core is to be coated with a special plastic, also bought in, using a special process. Plastic for the covering will be required at the rate of 0.10 kg/metre of completed cable. Direct labour: Skilled: 10 minutes/metre; Unskilled: 5 minutes/metre. The business already holds sufficient of each of the materials required to complete the contract. Information on the cost of the inventories is as follows: Steel core Plastic £/metre £/kg Historic cost 1.50 0.60 Current buying-in cost 2.10 0.70 Scrap value 1.40 0.10 The steel core is in constant use by the business for a variety of work that it regularly undertakes. The plastic is a surplus from a…arrow_forwardHaver Company currently pays an outside supplier $15 per unit for a part for one of its products. Haver is considering two alternative methods of making the part. Method 1 for making the part would require direct materials of $5 per unit, direct labor of $8 per unit, and ncremental overhead of $3 per unit. Method 2 for making the part would require direct materials of $5 per unit, direct labor of $2 per unit, and incremental overhead of $7 per unit. Required: 1. Compute the cost per unit for each alternative method of making the part. 2. Should Haver make or buy the part? If Haver makes the part, which production method should it use? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the cost per unit for each alternative method of making the part. Make with Method Make with 1 Method 2 Cost per unit Cost per unit Required t Buy Required 2 >arrow_forward
- Alderon Enterprises is evaluating a special order it has received for a ceramic fixture to be used in aircraft engines. Alderon has recently been operating at less than full capacity, so the firm's management will accept the order if the price offered exceeds the costs that will be incurred in producing it. You have been asked for advice on how to determine the cost of two raw materials that would be required to produce the order. A) The special order will require 800 gallons of Endor, a highly perishable material that is purchased as needed. Alderon currently has 1,200 gallons of Endor on hand, since the material is used in virtually all of the company's products. The last time endor was purchased, Alderon paid $5.00 per gallon. However, the average price paid for the endor in stock was only $4.75. The market price for the Endor is quite volatile, with the current price at $5.50. If the special order is accepted, Alderon will have to place a new order next week to replace the…arrow_forwardAlgonac Moldings produces a product made from a metal alloy. Two suppliers, Liebold Metal and Cecil Distributors, supply the alloy. Neither supplier can meet Algonac's typical demand, because of capacity constraints. The material from Liebold is less expensive to buy but more difficult to use, resulting in greater waste. The metal alloy is highly toxic and any waste requires costly handling to avoid environmental accidents. Last year the cost of handling the waste totaled $1,200,000. Additional data from last year’s operations are shown as follows: Liebold Metals Cecil Distributors Amount of material purchased (tons) 64.8 115.2 Amount of waste (tons) 9.0 11.0 Cost of purchases $ 1,488,000 $ 3,312,000 Required: Allocate the cost of the waste handling to the two suppliers based on: Amount of material purchased. Amount of waste. Cost of material purchased. Amount of material purchased. Note: Do not round intermediate calculations. A.)…arrow_forwardNote:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning