Sturbridge Company manufactures fine furniture and grandfather clocks. Sturbridge has an excellent reputation, and each grandfather clock sells for several thousand dollars. Which of the following is an indirect cost, assuming the cost object is the Clock Department? Multiple Choice Salary of the clock production supervisor. Depreciation on the factory building. Depreciation on clock-making equipment. All of the answers are correct.
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- Adams Company makes fine jewelry that it sells to department stores throughout the United States. Adams is trying to decide which of the two bracelets to manufacture. Cost data pertaining to the two choices follow. Cost of materials per unit Cost of labor per unit Advertising cost per year Annual depreciation on existing equipment Required a. Identify the fixed costs and determine the amount of fixed cost for each product. b. Identify the variable costs and determine the amount of variable cost per unit for each product. c. Identify the avoidable costs and determine the amount of avoidable cost for each product. Required A Complete this question by entering your answers in the tabs below. Fixed Costs Required B Total fixed costs Bracelet A $13 42 8,400 5,500 Required C Bracelet B $26 42 Identify the fixed costs and determine the amount of fixed cost for each product. Bracelet A Required A Bracelet B 6,100 5,100 Required B >Nizam Company produces speaker cabinets. Recently, Nizam switched from a traditional departmental assembly line system to a manufacturing cell in order to produce the cabinets. Sup-pose that the cabinet manufacturing cell is the cost object. Assume that all or a portion of the following costs must be assigned to the cell:a. Depreciation on electric saws, sanders, and drills used to produce the cabinetsb. Power to heat and cool the plant in which the cell is locatedc. Salary of cell supervisord. Wood used to produce the cabinet housingse. Maintenance for the cell’s equipment (provided by the maintenance department)f. Labor used to cut the wood and to assemble the cabinetsg. Replacement sanding beltsh. Cost of janitorial services for the planti. Ordering costs for materials used in productionj. The salary of the industrial engineer (she spends about 20 percent of her time on work forthe cell)k. Cost of maintaining plant and grounds l. Cost of plant’s personnel officem. Depreciation on…Finch Company makes fine jewelry that it sells to department stores throughout the United States. Finch is trying to decide which of the two bracelets to manufacture. Cost data pertaining to the two choices follow. Bracelet ABracelet B Cost of materials per unit $ 28 $ 34 Cost of labor per unit 44 44 Advertising cost per year 9,400 7,900 Annual depreciation on 5,700 5,400 existing equipment Required a. Identify the fixed costs and determine the amount of fixed cost for each product. b. Identify the variable costs and determine the amount of variable cost per unit for each product. c. Identify the avoidable costs and determine the amount of avoidable cost for each product. Complete this question by entering your answers in the tabs below. Required Required Required A B C Identify the avoidable costs and determine the amount of avoidable cost for each product. Avoidable Costs Bracelet Bracelet A B
- The Borstal Company has to choose between two machines that do the same job but have different lives. The two machines have the following costs: Year Machine A 0 1 2 3 4 $46,000 11, 200 11,200 11,200 replace Machine A Machine B Machine B $56,000 These costs are expressed in real terms. a. Suppose you are Borstal's financial manager. If you had to buy one or the other machine and rent it to the production manager for that machine's economic life, what annual rental payment would you have to charge? Assume a 8% real discount rate and ignore taxes. (Do not round intermediate calculations. Enter your answers as a positive value rounded to 2 decimal places.) $ 29,029.46 x $ 27,318.43 x 10,400 10,400 > Answer is complete but not entirely correct. Annual Rental Payment 10,400 10,400 replace O Machine A Machine B b. Which machine should Borstal buy? c. If there is steady 4% per year inflation, what will be the annual rental payment for machine B for the second year? (Enter your answer as a…Hicks Contracting collects and analyzes cost data in order to track the cost of installing decks on new home construction jobs. The following are some of the costs that they incur. Classify these costs as fixed or variable costs and as product or period costs. Lumber used to construct decks ($12.00 per square foot) Carpenter labor used to construct decks ($10 per hour) Construction supervisor salary ($45,000 per year) Depreciation on tools and equipment ($6,000 per year) Selling and administrative expenses ($35,000 per year) Rent on corporate office space ($34,000 per year) Nails, glue, and other materials required to construct deck (varies per job)Roper Furniture manufactures office furniture and tracks cost data across their process. The following are some of the costs that they incur. Classify these costs as fixed or variable costs, and as product costs or period costs. Wood used to produce desks ($125,00 per desk) Production labor used to produce desks ($15 per hour) Production supervisor salary ($45,000 per year) Depreciation on factory equipment ($60,000 per year) Selling and administrative expenses ($45,000 per year) Rent on corporate office ($44,000 per year) Nails, glue, and other materials required to produce desks (varies per desk) Utilities expenses for production facility Sales staff commission (5% of gross sales)
- Kelson Sporting Equipment, Inc., makes two types of baseball gloves: a regular model and a catchers model. The firm has 900 hours of production time available in its cutting and sewing department, 300 hours available in its finishing department, and 100 hours available in its packaging and shipping department. The production time requirements and the profit contribution per glove are given in the following table: Assuming that the company is interested in maximizing the total profit contribution, answer the following: a. What is the linear programming model for this problem? b. Develop a spreadsheet model and find the optimal solution using Excel Solver. How many of each model should Kelson manufacture? c. What is the total profit contribution Kelson can earn with the optimal production quantities? d. How many hours of production time will be scheduled in each department? e. What is the slack time in each department?4. Hicks Contracting collects and analyzes cost data in order to track the cost of installing decks on new home construction jobs. The following are some of the costs that they incur. Classify these costs as fixed or variable costs and as product or period costs. Costs Variable / Fixed Product / Period Lumber used to construct decks ($12.00 per square foot) Carpenter labor used to construct decks ($10 per hour) Construction supervisor salary ($45,000 per year) Depreciation on tools and equipment ($6,000 per year) Selling and administrative expenses ($35,000 per year) Rent on corporate office space ($34,000 per year) Nails, glue, and other materials required to construct deck (varies per job)Hicks Contracting collects and analyzes cost data in order to track the cost of installing decks on new home construction jobs. The following are some of the costs that they incur. Classify these costs as fixed or variable costs and as product or period costs. A. Lumber used to construct decks ($12.00 per square foot) B. Carpenter labor used to construct decks ($10 per hour) C. Construction supervisor salary ($45,000 per year) D. Depreciation on tools and equipment ($6,000 per year) E. Selling and administrative expenses ($35,000 per year) F. Rent on corporate office space ($34,000 per year) G. Nails, glue, and other materials required to construct deck (varies per job)
- Horton Manufacturing Incorporated produces blinds and other window treatments for residential homes and offices. The owner is concerned about the maintenance costs for the production machinery because maintenance costs for the previous fiscal year were higher than he expected. The owner has asked you to assist in estimating future maintenance costs to better predict the firm's profitability. Together, you have determined that the best cost driver for maintenance costs is machine hours. The data from the previous fiscal year for maintenance costs and machine hours follow: Month 1 3 4 6 7 8 9 10 11 12 Maintenance Costs Machine Hours $ 2,665 2,710 2,760 2,860 2,895 3,045 2,905 2,945 2,820 2,610 2,630 2,930 Maintenance cost 1,566 1,670 1,685 1,735 1,855 1,890 1,865 1,885 1,775 1,450 1,630 1,465 Required: 1. Use the high-low method to estimate the fixed and variable portions for maintenance costs. (In your calculations, round "slope (unit variable cost)" to 4 decimal places. Enter the…Mozaic Inc. has decided to introduce a new product, which can be manufactured by either a computer-assisted manufacturing system (CAM) or a labor-intensive production system (LIP). The manufacturing method will not affect the quality of the product. The estimated manufacturing costs by the two methods are as follows: CAM System LIP System Direct Material $5.00 $5.60 Direct Labor (DLH) 0.5 DLH x $12 $6.00 0.8 DLH x $9 $7.20 Variable Overhead 0.5 DLH x $6 $3.00 0.8 DLH x $6 $4.80 Fixed Overhead* $2,440,000 $1,320,000 * These costs are directly traceable to the new product line. They would not be incurred if the new product were not produced. The company's marketing research department has recommended an introductory unit sales price of $30. Selling expenses are estimated to be $500,000 annually plus $2 for each unit sold. (Ignore income taxes.) Required: 1. Calculate the estimated break-even point in annual unit sales of the new product if the company uses the (a) computer-assisted…Boyle Company makes fine jewelry that it sells to department stores throughout the United States. Boyle is trying to decide which of the two bracelets to manufacture. Cost data pertaining to the two choices follow: Bracelet A Bracelet B Cost of materials per unit Cost of labor per unit Advertising cost per year $ 10 $ 20 15 15 5,000 5,000 3,000 Annual depreciation on existing equipment 4,000 Required a. Identify the fixed costs and determine the amount of fixed cost for each product. b. Identify the variable costs and determine the amount of variable cost per unit for each product. c. Identify the avoidable costs and determine the amount of avoidable cost for each product.