Reaner Coffee Beans Inc. produces two coffee bean products: "Specialty" and "House." The "House" product is sold to a few major vendors in bulk. The "Specialty" product is sold direct to individual consumers. The "Specialty" product includes a designer box in which the beans are hand packed into a red velvet drawstring bag, A leaflet with dessert recipes is also included. The "House" product simply packages the beans into a basic coffee bag Renner leo, currently uses a plant-wide rate to allocate overhead costs based on direct labor hours. Overhead is estimated to be $460,000 for the year, while direct labor hours are estimated to be 80,000 hour. The "Specialty" product requires $5 in direct materials per unit and I direct labor A total of 20,000 units of the "Specialty" product were manufactured during the year. The "House" product requires $1.50 in direct materials per unit and .5 direct labor hours. 120,000 units of the "House" product were produced during the year. The direct labor rate is $10 per hour. Renner Inc. is considering switching to an activity-based costing system to apply overhead costs to its products. Three activity pools have been identified as follow Cost Driver of orders of packing hours direct labor hrs Activity Center Ordering Packing General Factory Required (a) (b) (c) (d) Trac Cora $100,000 60,000 300,000 Annual Tracoactions Total 1000 Specialty 700 4000 3750 80000 20000 Home 300 250 60000 Compute the plant-wide overhead rate and apply overhead to each product. Compute the overhead rate for each activity center. Assume ABC is used, compute the amount of overhead cost that should be applied to the "Specialty" and "House" products. Compute the total unit cost of the "Specialty" and "House" using

Lamothe Kitchen and Bath makes products for the home, which it sells through major retailers and remodeling (do-it-yourself, or DIY) outlets. One product that has had varying success is a ceiling fan for the kitchen. The fan comes in three sizes (36-Inch, 44-Inch, and 54-Inch), which are designed for various kitchen sizes and cooling requirements. The chief financial officer (CFO) at Lamothe has been looking at the segmented income statement for the fan and is concerned about the results for the 36-inch model. Revenues Variable costs Fixed costs allocated to products Operating profit (loss) 36 Inch $ 372,200 231,600 147,230 $ (6,630) If the 36-Inch model is dropped, the revenue associated with it would be lost and the related variable costs saved. In addition, the company's total fixed costs would be reduced by 25 percent. Required A Required B Required: a. Prepare a differential cost schedule to support your recommendation. b. Should Lamothe Kitchen and Bath should drop the 36-Inch…

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Lance Inc., processes sugar cane that it purchases from farmers. Sugar cane is processed in batches. A batch of sugar cane costs P60 to buy from farmers and P13 to crush in the company's plant. Two intermediate products, cane fiber and cane juice, emerge from the crushing process. The cane fiber can be sold as is for P29 or processed further for P13 to make the end product industrial fiber that is sold for P61. The cane juice can be sold as is for P40 or processed further for P20 to make the end product molasses that is sold for P67.1. How much profit (loss) does the company make by processing the intermediate product cane juice into molasses rather than selling it as is?

Destiny Kitchens manufactures and sells two types of kitchen chairs: Standard and Deluxe. Standard chairs sell for $85 each; Deluxe chairs sell for $110 each. Both types of chairs go through three production departments: Cutting, Sanding, and Finishing. The table below shows how much time each product must spend in each production department.