The Lopez Company uses standard costing in its manufacturing plant for auto parts. The standard cost of a particular auto part, based on a denominator level of 4,000 output units per year, included 6 machine-hours of variable manufacturing overhead at $8 per hour and 6 machine-hours of fixed manufacturing overhead at $15 per hour. Actual output produced was 4,400 units. Variable manufacturing overhead incurred was $245,000. Fixed manufacturing overhead incurred was $373,000. Actual machine-hours were 28,400. QDescribe how individual fixed manufacturing overhead items are controlled from day to day.

Andretti Company has a single product called a Dak. The company normally produces and sells 81,000 Daks each year at a selling price of $56 per unit. The company’s unit costs at this level of activity are given below:           Direct materials $ 6.50   Direct labor   12.00   Variable manufacturing overhead   3.20   Fixed manufacturing overhead   3.00 ($243,000 total) Variable selling expenses   3.70   Fixed selling expenses   3.50 ($283,500 total) Total cost per unit $ 31.90       A number of questions relating to the production and sale of Daks follow. Each question is independent.   Required: 1-a. Assume that Andretti Company has sufficient capacity to produce 101,250 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 25% above the present 81,000 units each year if it were willing to increase the fixed selling expenses by $130,000. What is the financial advantage (disadvantage) of investing an…

Martinez Company’s relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows:     Average Cost per Unit Direct materials $ 6.50 Direct labor $ 4.00 Variable manufacturing overhead $ 1.60 Fixed manufacturing overhead $ 4.00 Fixed selling expense $ 3.50 Fixed administrative expense $ 2.20 Sales commissions $ 1.20 Variable administrative expense $ 0.45   15. What incremental manufacturing cost will Martinez incur if it increases production from 10,000 to 10,001 units? (Round your answer to 2 decimal places.)

Alpesh

Andretti Company has a single product called a Dak. The company normally produces and sells 88,000 Daks each year at a selling price of $64 per unit. The company’s unit costs at this level of activity are given below:           Direct materials $ 9.50   Direct labor   9.00   Variable manufacturing overhead   2.30   Fixed manufacturing overhead   4.00 ($352,000 total) Variable selling expenses   4.70   Fixed selling expenses   2.50 ($220,000 total) Total cost per unit $ 32.00       A number of questions relating to the production and sale of Daks follow. Each question is independent.   Required: 1-a. Assume that Andretti Company has sufficient capacity to produce 110,000 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 25% above the present 88,000 units each year if it were willing to increase the fixed selling expenses by $120,000. What is the financial advantage (disadvantage) of investing an…

Sardi Inc. is considering whether to continue to make a component or to buy it from an outside supplier. The company uses 13,100 of the components each year. The unit product cost of the component according to the company's cost accounting system is given as follows:       Direct materials $ 8.90   Direct labor   5.90   Variable manufacturing overhead   1.70   Fixed manufacturing overhead   3.70   Unit product cost $ 20.20       Assume that direct labor is a variable cost. Of the fixed manufacturing overhead, 20% is avoidable if the component were bought from the outside supplier. In addition, making the component uses 2 minutes on the machine that is the company's current constraint. If the component were bought, time would be freed up for use on another product that requires 4 minutes on this machine and that has a contribution margin of $5.30 per unit. When deciding whether to make or buy the component, what cost of making the component should be compared to the…

Sardi Incorporated is considering whether to continue to make a component or to buy it from an outside supplier. The company uses 12,600 of the components each year. The unit product cost of the component according to the company's cost accounting system is given as follows:   Direct materials $ 8.40 Direct labor 5.40 Variable manufacturing overhead 1.20 Fixed manufacturing overhead 3.20 Unit product cost $ 18.20   Assume that direct labor is a variable cost. Of the fixed manufacturing overhead, 35% is avoidable if the component were bought from the outside supplier. In addition, making the component uses 1 minutes on the machine that is the company's current constraint. If the component were bought, time would be freed up for use on another product that requires 2 minutes on this machine and that has a contribution margin of $4.80 per unit. When deciding whether to make or buy the component, what cost of making the component should be compared to the price of buying the…

PCB Corporation manufactures a single product. Monthly production costs in- curred in the manufacturing process are shown below for the production of 3,000 units. The utilities and maintenance costs are mixed costs. The fixed portions of these costs are $300 and $200, respectively.Production in Units                 3,000Production CostsDirect materials.                      $ 7,500 Direct labor                                18,000  Utilities                                        2,100  Property taxes.                          1,000  Indirect labor                              4,500  Supervisory salaries                   1,900 Maintenance                                1,100 Depreciation                                 2,400   Instructions(a) Identify the above costs as variable, fixed, or mixed. (b) Calculate the expected costs when production is 5,000 units.

The following information relates to the unit product cost for a product manufactured by Nelson Industrial Company:Direct materials: $24 Direct Labor: 15 Variable overhead: 30 Fixed overhead: 18 Unit cost: 87 Line Item Description Cost Direct materials $24 Direct labor 15 Variable overhead 30 Fixed overhead                       18 Unit cost $87 In addition, fixed selling costs are $500,000 per year, and variable selling costs are $12 per unit sold. Although production capacity is 600,000 units per year, the company expects to produce only 400,000 units next year. The product normally sells for $120 each. A customer has offered to buy 100,000 units for $90 each.If the firm produces the special order, the effect on income would be a(n): a. increase of $1.050,000. b. decrease of $900,000. c. decrease of $1,0500,000. d. increase of $900,000.

Cane Company manufactures two products called Alpha and Beta that sell for $185 and $120, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 112,000 units of each product. Its average cost per unit for each product at this level of activity are given below:     Alpha Beta Direct materials   $ 30     $ 10   Direct labor     22       29   Variable manufacturing overhead     20       13   Traceable fixed manufacturing overhead     24       26   Variable selling expenses     20       16   Common fixed expenses     23       18   Total cost per unit   $ 139     $ 112       The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. Questions: A. Assume that Cane expects to produce and sell 88,000 Alphas during the current year. A supplier has offered to…