Seneca Hardwoods produces handcrafted jewelry boxes. A standard-size box requires 11 board feet of hardwood in the finished product. In addition, 5.0 board feet of scrap lumber is normally left from the production of one box. Hardwood costs $14.00 per board foot, plus $11.50 in transportation charges per board foot. Required: Compute the standard direct-material cost of a jewelry box.

1.    SportsHaven’s garden department produces bags of mulch. Fixed cost is $17,300. Each bag sells for $3.21 with a unit cost of $1.48.  How many bags of mulch must be sold to breakeven?

Frannie Fans currently manufactures ceiling fans that include remotes to operate them. The current cost to manufacture 10,040 remotes is as follows: Cost Direct materials 65, 260 55, 220 $ Direct labor Variable overhead 30,120 $ Fixed overhead 50, 200 $ 200,800 Total Frannie is approached by Lincoln Company which offers to make the remotes for $18 per unit. Required: 1. Compute the difference in cost between making and buying the remotes if none of the fixed costs can be avoided. What is the change in net income? 2. Compute the difference in cost between making and buying the remotes if $20,080 of the fixed costs can be avoided. What is the change in net income? 3. What is the change in net income if fixed cost of $20,080 can be avoided and Frannie could rent out the factory space no longer in use for $20,080?

The Seweeather Co. produces sweaters. The company buys raw wool on the market and processes it into wool yarn from which the sweaters are woven. One spindle of wool yarn is required to produce one sweater. The costs and revenues associated with the sweaters are given below:                                                                                Per sweater Selling price                                                                $30.00 Cost to manufacture: Raw materials: Buttons, threads, lining           $ 2.00 Wool yarn                                16.00 Total raw materials                   18.00 Direct labor                                5.80 Manufacturing overhead           8.70                         32,50 Manufacturing profit (loss)                                       $(2,50)   Originally, all of the wool yard was used to produce sweaters, but in recent years a market has developed for the wool yarn itself. The yarn is purchased by other companies for use in…

Winter Sports manufactures snowboards. Its cost of making 1,800 bindings is as​ follows in the data table. Suppose Livingston will sell bindings to Winter Sports for $14 each. Winter Sports would pay $1 per unit to transport the bindings to its manufacturing​ plant, where it would add its own logo at a cost of $0.60 per binding.

The Scottie Sweater Company produces sweaters under the “Scottie” label. The company buys raw wool and processes it into wool yarn from which the sweaters are woven. One spindle of wool yarn is required to produce one sweater. The costs and revenues associated with the sweaters are given below:         Per Sweater Selling price       $ 41.00   Cost to manufacture:             Raw materials:             Buttons, thread, lining $ 2.00         Wool yarn   20.00         Total raw materials   22.00         Direct labor   8.40         Manufacturing overhead   12.60     43.00   Manufacturing profit (loss)       $ (2.00 )     Originally, all of the wool yarn was used to produce sweaters, but in recent years a market has developed for the wool yarn itself. The yarn is purchased by other companies for use in production of wool blankets and other wool products. Since the development of the market for the wool yarn, a continuing dispute has existed in the Scottie Sweater…

Cool Boards manufactures snowboards. Its cost of making 1,800 bindings is as follows: (Click the icon to view the costs.) Suppose Lewis will sell bindings to Cool Boards for $16 each. Cool Boards would pay $3 per unit to transport the bindings to its manufacturing plant, where it would add its own logo at a cost of $0.70 per binding. Read the requirements. Requirement 1. Cool Boards' accountants predict that purchasing the bindings from Lewis will enable the company to avoid $1,800 of fixed overhead. Prepare an analysis to show whether Cool Boards should make or buy the bindings. (Only enter the net relevant costs. For the Difference column, use a minus sign or parentheses only when the cost of outsourcing exceeds the cost of making the bindings in-house.) Variable costs: Direct materials Direct labor Variable overhead Binding costs Fixed costs Purchase price from Lewis Transportation Logo Total differential cost of 1,800 bindings Should Cool Boards make or buy the bindings? Decision:…

Mountain Fun manufactures snowboards. Its cost of making 2,100 bindings is as follows: (Click the icon to view the costs.) Suppose Hemingway will sell bindings to Mountain Fun for $14 each. Mountain Fun would pay $3 per unit to transport the bindings to its manufacturing plant, where it would add its own logo at a cost of $0.70 per binding. Read the requirements. Requirement 1. Mountain Fun's accountants predict that purchasing the bindings from Hemingway will enable the company to avoid $1,800 of fixed overhead. Prepare an analysis to show whether Mountain Fun should make or buy the bindings. (Only enter the net relevant costs. For the Difference column, use a minus sign or parentheses only when the cost of outsourcing exceeds the cost of making the bindings in-house.) Variable costs: Binding costs Direct materials Direct labor Variable overhead Fixed costs Purchase price from Hemingway Transportation Logo Total differential cost of 2,100 bindings Should Mountain Fun make or buy the…

Rey

If the company buys the part it will still have to pay $1.50 per unit for the fixed manufacturing overhead costs.   Instructions:   Evaluate the two options and recommend Dala Furniture Company whether it should make or buy the 25,000 units of part D.