Price, Inc., bottles and distributes mineral water from the company's natural springs in northern Oregon. Price markets two products: 12-ounce disposable plastic bottles and 1-gallon reusable plastic containers. For 2015, Price marketing managers project monthly sales of 420,000 12-ounce bottles and 170,000 1-gallon containers. Average selling prices are estimated at $0.20 per 12-ounce bottle and $1.50 per 1-gallon container. How much is the total budgeted revenue for Price, Inc., for the year ending December 31, 2015? Answer:
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- Munoz Manufacturing Company makes tents that it sells directly to camping enthusiasts through a mail-order marketing program. The company pays a quality control expert $77,050 per year to inspect completed tents before they are shipped to customers. Assume that the company completed 1,690 tents in January and 1,300 tents in February. For the entire year, the company expects to produce 11,500 tents. If the cost objective is to determine the cost per tent, is the expert’s salary a direct or an indirect cost? How much of the expert’s salary should be allocated to tents produced in January and February?Shadee Corp. expects to sell 590 sun visors in May and 430 in June. Each visor sells for $21. Shadee’s beginning and ending finished goods inventories for May are 70 and 45 units, respectively. Ending finished goods inventory for June will be 70 units. Each visor requires a total of $5.50 in direct materials that includes an adjustable closure that the company purchases from a supplier at a cost of $2.00 each. Shadee wants to have 27 closures on hand on May 1, 16 closures on May 31, and 24 closures on June 30. Additionally, Shadee’s fixed manufacturing overhead is $1,300 per month, and variable manufacturing overhead is $2.50 per unit produced. Required: 1. Determine Shadee's budgeted cost of closures purchased for May and June. 2. Determine Shadee's budget manufacturing overhead for May and June.Bandar Industries manufactures sporting equipment. One of the company's products is a football helmet that requires special plastic. During the quarter ending June 30, the company manufactured 3,800 helmets, using 2,812 kilograms of plastic. The plastic cost the company $21,371. According to the standard cost card, each helmet should require 0.66 kilogram of plastic, at a cost of $8.00 per kilogram. Required: 1. What is the standard quantity of kilograms of plastic (SQ) that is allowed to make 3,800 helmets? 2. What is the standard materials cost allowed (SQ x SP) to make 3,800 helmets? 3. What is the materials spending variance? 4. What are the materials price variance and the materials quantity variance? Note: For requirements 3 and 4, indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations. 1. Standard quantity of kilograms…
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- Ginocera Inc. is a designer, manufacturer, and distributor of custom gourment kitchen knives. A new kitchen knife series called the Kitchen Ninja was released for production in early 20Y8. In January, the company spent $600,000 to develop a late-night advertising infomercial for the new product. During 20Y8, the company spent an additional $1,400,000 promoting the product through these infomercials, and $800,000 in legal costs. The knives were ready for manufacture on January 1, 20Y8. Ginocera uses job order costing to accumulate costs associated with the Kitchen Ninja Knife. The unit direct materials cost for the knife is: Hardened steel blanks (used for knife shaft and blade) $4.00 Wood (for handle) 1.50 Packaging 0.50 The production process is straightforward. First, the hardened steel blanks, which are purchased directly from a raw material supplier, are stamped into a single piece of metal that includes both the blade and the shaft. The stamping machine requires one hour per 250…Bright Night, Inc., manufactures light bulbs. Its purchasing policy requires that the purchasing agents place each quarter’s purchasing requirements out for bid. This is because the Purchasing Department is evaluated solely by its ability to get the lowest purchase prices. The lowest bidder receives the order for the next quarter (90 working days).To make its bulb products, Bright Night requires 36,000 pounds of glass per quarter. Bright Night received two glass bids for the third quarter, as follows:• Central Glass Company: $30.00 per pound of glass. Delivery schedule: 36,000 (400 lbs. × 90 days) pounds at the beginning of July to last for 3 months.• Ithaca Glass Company: $30.20 per pound of glass. Delivery schedule: 400 pounds per working day (90 days in the quarter).Bright Night accepted Central Glass Company’s bid because it was the low-cost bid.Instructions1. Comment on Bright Night’s purchasing policy.2. What are the additional (hidden) costs, beyond price, of Central Glass…United States Motors Inc. (USMI) manufactures automobiles and light trucks and distributes them for sale to consumers through franchised retail outlets. As part of the franchise agreement, dealerships must provide monthly financial statements following the USMI accounting procedures manual. USMI has developed the following financial profile of an average dealership that sells 1,500 new vehicles annually: Sales Cost of goods sold AVERAGE DEALERSHIP FINANCIAL PROFILE Composite Income Statement Gross profit Operating costs Variable Mixed Fixed Operating income $30,000,000 24,750,000 $ 5,250,000 $ USMI is considering a major expansion of its dealership network. The vice president of marketing has asked Jack Snyder, corporate controller, to develop some measure of the risk associated with the addition of these franchises. Jack estimates that 90% of the mixed costs shown are variable for purposes of this analysis. He also suggests performing regression analyses on the various components of…
- The Hurley Hat Company manufactures baseball hats. Hurley’s primary customers are sporting goods stores that supply uniforms to youth baseball teams. Following is Hurley’s income statement for 2018: In 2018, Hurley produced and sold 200,000 baseball hats. Of the Cost of Goods gold, $150,000 is fixed; 80% of the Selling and Administrative Expenses are fixed. There were no beginning inventories on January 1, 2018. The company is considering two options to increase sales. Option 1: The company is operating at 100,000 hats below full production capacity and is considering increasing advertising to increase sales to the production capacity level in 2019. The marketing director predicts that an additional $100,000 expenditure for advertising Would increase sales to 300,000 hats per year. Option 2: The sales manager has been negotiating with buyers for several national sporting goods retailers and recommends the company expand production capacity to 400,000 hats in order to secure long-term…A supermarket uses a supplier for its bottled water. The annual demand for this product is 24000 units. The supermarket purchases bottled water from its supplier at a price of $0.8 per bottle. The holding cost per of water per year is $0.4. The ordering cost for the supermarket is $80 per order and the lead time is 2 days. The company operates 250 days a year. The supermarket uses Economic Order Quantity model to manage its inventories. What is the recorder point?