R company can produce 1,000 of finished goods units through following costs: Direct material Direct labor Variable overhead Fixed overhead The company can buy these 1,000 units from outside for $170,000. Fixed cost of $19,250 is avoidable if units are purchased from outside. If the company will produce the goods, then what will be the cost savings? Answer * OO A B $82,000 $33,500 $27,000 $19,250 D

R company can produce 1,000 of finished goods units through following costs: Direct material Direct labor Variable overhead Fixed overhead The company can buy these 1,000 units from outside for $170,000. Fixed cost of $19,250 is avoidable if units are purchased from outside. If the company will produce the goods, then what will be the cost savings? Answer * OO A B $82,000 $33,500 $27,000 $19,250 D

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Description: R company can produce 1,000 of finished goods units through following costs:Direct materialDirect laborVariable overheadFixed overheadThe company can buy these 1,000 units from outside for $170,000. Fixed cost of $19,250is avoidable if units are pur

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 1PA: The following product Costs are available for Haworth Company on the production of chairs: direct...

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The following product Costs are available for Haworth Company on the production of chairs: direct materials, $15,500; direct labor, $22.000; manufacturing overhead, $16.500; selling expenses, $6,900; and administrative expenses, $15,200. What are the prime costs? What are the conversion costs? What is the total product cost? What is the total period cost? If 7,750 equivalent units are produced, what is the equivalent material cost per unit? If 22,000 equivalent units are produced, what is the equivalent conversion cost per unit?
What is the conversion cost to manufacture insulated travel cups if the costs are: direct materials, $17,000; direct labor, $33,000; and manufacturing overhead, $70,000? A. $16,000 B. $50,000 C. $103,000 D. $120000
The following product costs are available for Stellis Company on the production of erasers: direct materials, $22,000; direct labor, $35,000; manufacturing overhead, $17,500; selling expenses, $17,600; and administrative expenses; $13,400. What are the prime costs? What are the conversion costs? What is the total product cost? What is the total period cost? If 13,750 equivalent units are produced, what is the equivalent material cost per unit? If 17,500 equivalent units are produced, what is the equivalent conversion cost per unit?
Patz Company produces two types of machine parts: Part A and Part B, with unit contribution margins of 300 and 600, respectively. Assume initially that Patz can sell all that is produced of either component. Part A requires two hours of assembly, and B requires five hours of assembly. The firm has 300 assembly hours per week. Required: 1. Express the objective of maximizing the total contribution margin subject to the assembly-hour constraint. 2. Identify the optimal amount that should be produced of each machine part and the total contribution margin associated with this mix. 3. What if market conditions are such that Patz can sell at most 75 units of Part A and 60 units of Part B? Express the objective function with its associated constraints for this case and identify the optimal mix and its associated total contribution margin.
Hatch Manufacturing produces multiple machine parts. The theoretical cycle time for one of its products is 65 minutes per unit. The budgeted conversion costs for the manufacturing cell dedicated to the product are 12,960,000 per year. The total labor minutes available are 1,440,000. During the year, the cell was able to produce 0.6 units of the product per hour. Suppose also that production incentives exist to minimize unit product costs. Required: 1. Compute the theoretical conversion cost per unit. 2. Compute the applied conversion cost per minute (the amount of conversion cost actually assigned to the product). 3. Discuss how this approach to assigning conversion cost can improve delivery time performance. Explain how conversion cost acts as a performance driver for on-time deliveries.
Total costs for ABC Distributing are $250,000 when the activity level is 10,000 units. If variable costs are $5 per unit, what are their fixed costs? $240,000 $200,000 $260,000 Their fixed costs cannot be determined from the information presented.
Oriole, Inc. can produce 100 units of a component part with the following costs: Direct Materials Direct Labour Variable Overhead Fixed Overhead $30100 Buy and save $12500. O Make and save $4700. O Buy and save $1000. Make and save $1000. 13200 31700 21300 If Oriole Inc. can purchase the component externally for $87500 and only $7800 of the fixed costs can be avoided, what is the correct "make-or-buy decision"?
Waterway Industries, Inc. can produce 100 units of a component part with the following costs: Direct Materials Direct Labor Variable Overhead Fixed Overhead $22000 6000 14000 15500 If Waterway Industries, Inc. can purchase the component part externally for $49000 and only $4000 of the fixed costs can be avoided. what is the correct make-or-buy decision? O Make and save $3000 O Buy and save $4500 O Make and save $4500 O Buy and save $7000
Jana's Manufacturing Company can make 100 units of a necessary component part with the following costs: Direct Materials Direct Labor Variable Overhead Fixed Overhead $120,000 25,000 45,000 30,000 If Jana's Manufacturing Company can purchase the component externally for $190,000 and only $5,000 of the fixed costs can be avoided, what is the correct make-or-buy decision? Make and save $15,000 Buy and save $15,000 Buy and save $5,000 Make and save $5,000
Coronado, Inc. can produce 100 units of a component part with the following costs: Direct Materials Direct Labour Variable Overhead Fixed Overhead $29000 Make and save $5800. Buy and save $13500. Make and save $1700. Buy and save $1700. 13200 32100 22900 If Coronado Inc. can purchase the component externally for $87800 and only $7700 of the fixed costs can be avoided, what is the correct "make-or-buy decision"?
Fornelli, Inc. can produce 100 units of a component part with the following costs: Direct Materials $15,000 Direct Labor 6,500 Variable Overhead 16,000 Fixed Overhead 11,000 f Fornelli, Inc. can purchase the component part externally for $44,000 and only $4,000 of the fixed costs can be avoided, what is the correct make-or-buy decision? Select one: a. Buy and save $6,500 b. Buy and save $500 c. Make and save $2,500 d. Make and save $500 e. buy and save $2,500
Concord Corporation can produce 100 units of a necessary component part with the following costs: Direct Materials $23000 Direct Labor 9000 Variable Overhead Fixed Overhead 25000 O $50000 O $57000 O $62000 O $64000 12000 If Concord Corporation purchases the component externally, $5000 of the fixed costs can be avoided. Below what external price for the 100 units would Concord choose to buy instead of make the units?