Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow: Direct Labor- Hours per unit Rims Posts 0.40 0.60 Annual Production 26,000 units 88,000 units Chec Additional information about the company follows: a. Rims require $20 in direct materials per unit, and Posts require $18. b. The direct labor wage rate is $18 per hour. c. Rims are more complex to manufacture than Posts and they require special equipment. d. The ABC system has the following activity cost pools: Estimated Activity Activity Cost Pool Machine setups Special processing General factory Activity Measure Number of setups Machine-hours. Estimated Overhead Cost $ 28,160 Rims 110 Posts 90 Total 200 $ 164,560 2,000 0 2,000 Direct labor-hours $ 780,000 10,400 52,800 63,200 2. Determine the unit product cost of each product according to the ABC system. (Do not round intermediate calculations. Round your final answers to 2 decimal places.) Unit product cost of Rims I Init product cost of Docte

Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow: Direct Labor- Hours per unit Rims Posts 0.40 0.60 Annual Production 26,000 units 88,000 units Chec Additional information about the company follows: a. Rims require $20 in direct materials per unit, and Posts require $18. b. The direct labor wage rate is $18 per hour. c. Rims are more complex to manufacture than Posts and they require special equipment. d. The ABC system has the following activity cost pools: Estimated Activity Activity Cost Pool Machine setups Special processing General factory Activity Measure Number of setups Machine-hours. Estimated Overhead Cost $ 28,160 Rims 110 Posts 90 Total 200 $ 164,560 2,000 0 2,000 Direct labor-hours $ 780,000 10,400 52,800 63,200 2. Determine the unit product cost of each product according to the ABC system. (Do not round intermediate calculations. Round your final answers to 2 decimal places.) Unit product cost of Rims I Init product cost of Docte

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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Gelb Company currently makes a key part for its main product. Making this part incurs per unit variable costs of $1.30 for direct materials and $0.85 for direct labor. Incremental overhead to make this part is $1.44 per unit. The company can buy the part for $3.76 per unit. (a) Prepare a make or buy analysis of costs for this part. (Enter your answers rounded to 2 decimal places.) (b) Should Gelb make or buy the part? (a) Make or Buy Analysis Direct materials Direct labor Overhead Cost to buy Cost per unit Cost difference (b) Company should: Make Buy
Leach Finishing makes various metal fittings for the construction industry. Three of the fittings, models X-12, X-24, and X-30, require grinding on a patented machine of which Leach has only one. The cost of production information for the three products follow: X-12 $35 $ 20 18.0 Price per fitting Variable cost per fitting Units per hour of grinding The testing machine used for both models has a capacity of 3,230 hours annually. Fixed manufacturing costs are $496,000 annually. Required A Required B X-24 $ 51 $ 27 12.5 Required: a. Suppose that Leach Finishing can sell at most 59,200 units of any one fitting. How many units of each fitting model should Leach Finishing produce annually? b. Suppose that Leach Finishing can sell at most 18,000 units of any one fitting. How many units of each fitting should Leach Finishing produce annually? X-30 $ 70 $ 44 10.0 Complete this question by entering your answers in the tabs below. X-12 X-24 X-30 units units units Suppose that Leach Finishing can…
Required information [The following information applies to the questions displayed below.] Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow: Rims Posts: Direct Labor- Hours per unit 0.40 0.60 Additional information about the company follows: a. Rims require $20 in direct materials per unit, and Posts require $18. b. The direct labor wage rate is $18 per hour. c. Rims are more complex to manufacture than Posts and they require special equipment. d. The ABC system has the following activity cost pools: Activity Cost Pool Machine setups Special processing General factory Annual Production 26,000 units 88,000 units Unit product cost of Rims Unit product cost of Posts Activity Measure Number of setups Machine-hours Direct labor-hours. Estimated Overhead Cost $28,160 $ 164,560 $ 780,000 Estimated Activity Rims 110 2,000 10,400 Posts 90 0 52,800 Total 200 2,000 63,200 2. Determine the unit product cost of each product…
Snavely, Incorporated, manufactures and sells two products: Product E1 and Product A7. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Product E1 Product A7 Total direct labor-hours Product E1 Product A7 The direct labor rate is $22.70 per DLH. The direct materials cost per unit for each product is given below: Direct Materials Cost per Unit $286.00 $ 223.00 Activity Cost Pools Labor-related Machine setups Order size Expected Production 600 500 The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Direct Labor- Total Direct Hours Per Unit Labor-Hours 6,000 10.0 5.0 2,500 8,500 Activity Measures DLHs setups MHS Estimated Expected Activity Overhead Cost Product E1 Product A7 $ 121,100 57, 110 893,250 $ 1,071,460 6,000 700 3,000 2,500 500 2,800 Total 8,500 1,200 5,800 The total overhead applied to Product E1…
Required information [The following information applies to the questions displayed below.] Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow: Rims Posts Direct Labor- Hours per unit 0.70 0.80 Annual Production Additional information about the company follows: a. Rims require $14 in direct materials per unit, and Posts require $10. b. The direct labor wage rate is $20 per hour. Activity Cost Pool Machine setups Special processing General factory 26,000 units 90,000 units c. Rims are more complex to manufacture than Posts and they require special equipment. d. The ABC system has the following activity cost pools: Unit product cost of Rims Unit product cost of Posts Activity Measure Number of setups Machine-hours Direct labor-hours Estimated Overhead Cost $ 33,300 $ 172,800 $ 858,000 Estimated Activity Rims 70 3,000 18,200 Posts 230 0 72,000 Total 300 3,000 90,200 2. Determine the unit product cost of each product…
Becton Labs, Incorporated, produces various chemical compounds for industrial use. One compound, called Fludex, has the following standard cost per unit: Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials 2.40 ounces $ 18.00 per ounce $ 43.20 Direct labor 0.70 hours $ 14.00 per hour 9.80 Variable manufacturing overhead 0.70 hours $ 3.00 per hour 2.10 Total standard cost per unit $ 55.10 During November, the following activity was recorded related to the production of Fludex: Materials purchased, 12,000 ounces at a cost of $198,000. There was no beginning inventory of materials; however, at the end of the month, 3,200 ounces of material remained in ending inventory. The company employs 20 lab technicians to work on the production of Fludex. During November, they each worked an average of 160 hours at an average pay rate of $12.00 per hour. Variable manufacturing overhead is assigned to Fludex on the basis of direct labor-hours.…
Petrillo Company produces engine parts for large motors. The company usesa standard cost system for production costing and control. The standard costsheet for one of its higher volume products (a valve) is as follows: Direct materials (7 lbs @$5,4) $37,80 Direct labor (1,75 lbs @$18) $31,50 Variable overhead (1,75 lbs @$4) $7 Fixed overhead (1,75 lbs @$3) $5,25 Standard unit cost $81,55 During the year, Petrillo had the following activity related to valve production:a. Production of valves totaled 20,600 units.b. A total of 135,400 pounds of direct materials was purchased at $5.36per pound.c. There were 10,000 pounds of direct materials in beginning inventory(carried at $5.40 per pound). There was no ending inventory. d. The company used 36,500 direct labor hours at a total cost of $656,270.e. Actual fixed overhead totaled $110,000.f. Actual variable overhead totaled $168,000.Petrillo produces all of its valves in a single plant. Normal activity is 20,000units per year. Standard…
Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit Annual Production 16,000 units 53,000 units Hubs Sprockets Additional information about the company follows: a. Hubs require $34 in direct materials per unit, and Sprockets require $13. b. The direct labor wage rate is $19 per hour. 0.80 0.40 c. Hubs require special equipment and are more complex to manufacture than Sprockets. d. The ABC system has the following activity cost pools: Activity Cost Pool (Activity Measure) Machine setups (number of setups) Special processing (machine-hours) General factory (organization-sustaining) Estimated Overhead Cost $ 26,910 $ 120,000 $ 330,800 Required: 1. Compute the activity rate for each activity cost pool. 2. Determine the unit product cost of each product according to the ABC system. Hubs 130 4,000 NA Activity Sprockets 104 0 ΝΑ Total 234 4,000 ΝΑ
Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit Hubs Sprockets Additional information about the company follows: a. Hubs require $36 in direct materials per unit, and Sprockets require $10. b. The direct labor wage rate is $13 per hour. c. Hubs require special equipment and are more complex to manufacture than Sprockets. d. The ABC system has the following activity cost pools: 0.80 0.40 Annual Production 20,000 units 50,000 units Activity Cost Pool (Activity Measure) Machine setups (number of setups) Special processing (machine-hours) General factory (organization-sustaining) Required 1 Required 2 Required: 1. Compute the activity rate for each activity cost pool. 2. Determine the unit product cost of each product according to the ABC system. Complete this question by entering your answers in the tabs below. Compute the activity rate for each activity cost pool. Activity Cost Pool Machine setups Special…
Gelb Company currently makes a key part for its main product. Making this part incurs per unit variable costs of $1.40 for direct materials and $0.95 for direct labor. Incremental overhead to make this part is $1.48 per unit. The company can buy the part for $4.02 per unit. (a) Prepare a make or buy analysis of costs for this part. Note: Enter your answers rounded to 2 decimal places. (b) Should Gelb make or buy the part? (a) Make or Buy Analysis Direct materials Direct labor Overhead Cost to buy Cost per unit Cost difference (b) Company should: Make Buy
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