[The following information applies to the questions displayed below.] Ferry Electronics produces a wide variety of video and audio systems for home entertainment. One of the Ferry plants (Lakeview) produces home theatre systems. The plant produces three models, Silver, Gold, and Platinum, which differ in the quality of the components and capability to "fill" the room with sound. The financial team at Ferry is completing the planning for the coming quarter. Information on volumes and costs expected for the quarter follow: Units produced Machine-hours Direct labor-hours Revenues Direct materials costs Direct labor costs Manufacturing overhead Operating Profit Silver 2,000 590 600 $ 583,600 310,000 9,600 Gold 1,500 2,100 1,200 $ 793,050 533,250 28,800 Platinum 500 1,050 750 $493,350 303,000 25,350 Total 4,000 3,740 2,550 $ 1,870,000 1,146,250 63,750 561,000 $ 99,000 The team has been discussing two issues. First, there is disagreement about how best to allocate the manufacturing overhead among the products. The current cost accounting system allocates manufacturing overhead to products based on expected unit sales. (Because Ferry carries no inventory, unit sales are equal to units produced.) Second, there is a concern about a "softening" in the demand for these systems and the managers at Ferry want to get a better understanding of possible financial implications if demand should be weaker than expected. c. Consider the requirement independent from requirement a and b. Using the per unit product line unit profits calculated in requirement (a), compute the total profits for each of the products at the volumes calculated in requirement b. Note: Do not round intermediate calculations. Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places.

Yardwork Tools Corp manufactures garden tools in a factory in​ Taneytown, Maryland.​ Recently, the company designed a collection of tools for professional use rather than consumer use. Management needs to make a good decision about whether to produce this line in their existing space in​ Maryland, where space is available or to accept an offer from a manufacturer in Taiwan. Data concerning the decision are as​ follows: Expected annual sales of tools (in units) 660,000 Average selling price of tools $11 Price quoted by Taiwanese company, in New Taiwanese Dollars (NTD) 27,300 Current exchange rate 9,100 NTD = $1 Variable manufacturing costs $2.85 per unit Incremental annual fixed manufacturing costs associated with the new product line $310,000 Variable selling and distribution costsª $0.50 per unit Annual fixed selling and distribution costsª $250,000   ​ªSelling and distribution costs are the same regardless of whether the tools…

Fiske Corporation manufactures a popular regional brand of kitchen utensils. The design and variety have been fairly constant over the last three years. The managers at Fiske are planning for some changes in the product line next year, but first they want to understand better the relation between activity and factory costs as experienced with the current products. Discussions with the plant supervisor suggest that overhead seems to vary with labor-hours, machine-hours, or both. The following data were collected from the last three years of operations: Quarter Machine-Hours Labor-Hours Factory costs 1 18,850 14,905 $ 3,388,671 2 18,590 15,477 3,425,136 3 17,480 16,720 3,617,144 4 19,240 15,983 3,573,240 5 21,280 17,501 3,812,284 6 19,630 17,369 3,777,312 7 19,240 15,290 3,531,726 8 18,850 14,366 3,369,102 9 18,460 15,994 3,512,487 10 20,670 16,995 3,730,734 11 17,550 14,278 3,135,315 12 18,460 19,244 3,723,786 Required: Use the high-low method to…

Neely Systems Corporation manufactures and sells various high-tech office automation products. Two divisions of Neely Systems Corporation are the Computer Chip Division and the Computer Division. The Computer Chip Division manufactures one product, a "super chip," that can be used by both the Computer Division and other external customers. The following information is available on this month's operations in the Computer Chip Division: Selling price per chip $50   Variable costs per chip $20   Fixed production costs $60,000   Fixed SG&A costs $90,000   Monthly capacity 10,000 chips External sales 6,000 chips Internal sales 0 chips Presently, the Computer Division purchases no chips from the Computer Chips Division, but instead pays $45 to an external supplier for the 4,000 chips it needs each month. Refer to Neely Systems Corporation. Two possible transfer prices (for 4,000 units) are under consideration by the two divisions: $35 and $40. Corporate profits would…

Trivor, Inc., produces a special line of toy racing cars. Trivor produces the cars in batches. To manufacture each batch of cars, Trivor must set up the machines and molds. Setup costs are fixed batch-level costs. In the long run, number of setup-hours is the cost driver of set up costs. A separate Setup Department is responsible for setting up machines and molds for each style of car. The following information pertains to 2020: (Click the icon to view the information.) Read the requirements. Requirement a. Calculate the spending variance for fixed setup overhead costs. (Label the variance as favorable (F) or unfavorable (U).) The spending variance for fixed setup overhead costs is Requirements Calculate the following: a. The spending variance for fixed setup overhead costs b. The budgeted fixed setup overhead rate c. The production-volume variance for fixed overhead setup costs Print Done U < Data table Units produced and sold Batch size (number of units per batch) Setup-hours per…

Best Ink produces printers for personal computers. The following information is available for production of a recent order of 500 printers. Process time 16.0 hours Inspection time 3.5 hours Move time 9.0 hours Wait time 21.5 hours 1. Compute the company’s manufacturing cycle time. 2. Compute the company’s manufacturing cycle efficiency. 3. Assume the company wishes to increase its manufacturing cycle efficiency to 0.80. If process time is unchanged, what is the maximum number of hours of non-value-added time the company can have and meet this goal?

Sako Company’s Audio Division produces a speaker that is used by manufacturers of various audio products. Sales and cost data on the speaker follow: Selling price per unit on the intermediate market $ 136 Variable costs per unit $ 118 Fixed costs per unit (based on capacity) $ 8 Capacity in units 25,000 Sako Company has a Hi-Fi Division that could use this speaker in one of its products. The Hi-Fi Division will need 5,000 speakers per year. It has received a quote of $133 per speaker from another manufacturer. Sako Company evaluates division managers on the basis of divisional profits. Required: Assume the Audio Division sells only 20,000 speakers per year to outside customers. From the standpoint of the Audio Division, what is the lowest acceptable transfer price for speakers sold to the Hi-Fi Division? From the standpoint of the Hi-Fi Division, what is the highest acceptable transfer price for speakers acquired from the Audio Division? What is the range of…

Yardwork Tools Corp manufactures garden tools in a factory in​ Taneytown, Maryland.​ Recently, the company designed a collection of tools for professional use rather than consumer use. Management needs to make a good decision about whether to produce this line in their existing space in​ Maryland, where space is available or to accept an offer from a manufacturer in Taiwan. Data concerning the decision are as​ follows: Expected annual sales of tools (in units) 660,000 Average selling price of tools $11 Price quoted by Taiwanese company, in New Taiwanese Dollars (NTD) 27,300 Current exchange rate 9,100 NTD = $1 Variable manufacturing costs $2.85 per unit Incremental annual fixed manufacturing costs associated with the new product line $310,000 Variable selling and distribution costsª $0.50 per unit Annual fixed selling and distribution costsª $250,000   ​ªSelling and distribution costs are the same regardless of whether the tools…

Sako Company’s Audio Division produces a speaker that is used by manufacturers of various audio products. Sales and cost data on the speaker follow:Selling price per unit on the intermediate market     $ 80Variable costs per unit     $ 62Fixed costs per unit (based on capacity)     $ 8Capacity in units     25,000 Sako Company has a Hi-Fi Division that could use this speaker in one of its products. The Hi-Fi Division will need 5,000 speakers per year. It has received a quote of $77 per speaker from another manufacturer. Sako Company evaluates division managers on the basis of divisional profits.Required:     1. Assume the Audio Division is selling 22,500 speakers per year to outside customers.  A.   From the standpoint of the Audio Division, what is the lowest acceptable transfer price for speakers sold to the Hi-Fi Division?  B.   From the standpoint of the Hi-Fi Division, what is the highest acceptable transfer price for speakers acquired from the Audio Division?   C.  What is the…

Coram Audio makes wireless headphones. Each pair of headphones comes with a travel case. Since its founding. Coram has manufactured its own travel cases. Recently, Holmur Travel Gear (HTG), a local outfitter that manufactures and sells backpacks, tent cases, and so on, contacted Coram and proposed that they produce the headphone travel cases. Based on management experience, Coram's cost per travel case is as follows (based on annual production of 42,800 units). Direct materials Direct labor Variable overhead Fixed overhead Total $ 10.00 21.20 6.40 4.70 $ 42.30 HTG has offered to sell the case to Coram for $39 each. The total order would amount to 42,800 travel cases per year. Coram's management decides that they will make the switch to HTG cases if Coram can save at least $13,400 per year. Accepting the offer would eliminate annual fixed overhead of $81,320. Required: a. Prepare a schedule that shows the total differential costs. b. Should Coram continue to make the travel cases or buy…