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The Seattle Corporation manufactures filing cabinets in two operations: mach |(Click the icon to view the department information.) Requirements Each cabinet sells for $105 and has direct material costs of $70 incurred at th There is no connection between the requirements. 1. Seattle is considering using some modern jigs and tools in the finishing operation that would increase annual finishing output by 1,200 units. The annual cost of these jigs and tools is $25,000. Should Seattle acquire these tools? Show your calculations. 2. The production manager of the Machining Department has submitted a proposal to do faster setups that would increase the annual capacity of the Machining Department by 13,500 units and would cost $32,000 per year. Should Seattle implement the change? Show your calculations. Read the requirements. Requirement 1. Seattle is considering using some modern jigs and tools in th calculations. Producing 1,200 more units will generate | contribution (throughput) ma 3. An outside contractor offers to do the finishing operation for 17,000 units at $10 per unit, double the $5 per unit that it costs Seattle to do the finishing in-house. Should Seattle accept the subcontractor's offer? Show your calculations. 4. The Heaton Corporation offers to machine 6,800 units at $4 per unit, half the $8 per unit that it costs Seattle to do the machining in-house. Should Seattle accept Heaton's offer? Show your calculations.

The Seattle Corporation manufactures filing cabinets in two operations: mach |(Click the icon to view the department information.) Requirements Each cabinet sells for $105 and has direct material costs of $70 incurred at th There is no connection between the requirements. 1. Seattle is considering using some modern jigs and tools in the finishing operation that would increase annual finishing output by 1,200 units. The annual cost of these jigs and tools is $25,000. Should Seattle acquire these tools? Show your calculations. 2. The production manager of the Machining Department has submitted a proposal to do faster setups that would increase the annual capacity of the Machining Department by 13,500 units and would cost $32,000 per year. Should Seattle implement the change? Show your calculations. Read the requirements. Requirement 1. Seattle is considering using some modern jigs and tools in th calculations. Producing 1,200 more units will generate | contribution (throughput) ma 3. An outside contractor offers to do the finishing operation for 17,000 units at $10 per unit, double the $5 per unit that it costs Seattle to do the finishing in-house. Should Seattle accept the subcontractor's offer? Show your calculations. 4. The Heaton Corporation offers to machine 6,800 units at $4 per unit, half the $8 per unit that it costs Seattle to do the machining in-house. Should Seattle accept Heaton's offer? Show your calculations.

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 4CE: Larsen, Inc., produces two types of electronic parts and has provided the following data: There are...
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The Seattle Corporation manufactures filing cabinets in two operations: machi E (Click the icon to view the department information.) Requirements Each cabinet sells for $105 and has direct material costs of $70 incurred at the There is no connection between the requirements. 1. Seattle is considering using some modern jigs and tools in the finishing operation that would increase annual finishing output by 1,200 units. The annual cost of these jigs and tools is $25,000. Should Seattle acquire these tools? Show your calculations. 2. The production manager of the Machining Department has submitted a proposal to do faster setups that would increase the annual capacity of the Machining Department by 13,500 units and would cost $32,000 per year. Should Seattle implement the change? Show your calculations. 3. An outside contractor offers to do the finishing operation for 17,000 units at $10 per unit, double the $5 per unit that it costs Seattle to do the finishing in-house. Should Seattle accept the subcontractor's offer? Show your Read the requirements. Requirement 1. Seattle is considering using some modern jigs and tools in th calculations. Producing 1,200 more units will generate contribution (throughput) ma calculations. 4. The Heaton Corporation offers to machine 6,800 units at $4 per unit, half the S8 per unit that it costs Seattle to do the machining in-house. Should Seattle accept Heaton's offer? Show your calculations. 5. Seattle produces 1,800 defective units at the machining operation. What is the cost to Seattle of the defective items produced? Explain your answer briefly. 6. Seattle produces 1,800 defective units at the finishing operation. What is the cost to Seattle of the defective items produced? Explain your answer briefly. Print Done
Transcribed Image Text:The Seattle Corporation manufactures filing cabinets in two operations: machi E (Click the icon to view the department information.) Requirements Each cabinet sells for $105 and has direct material costs of $70 incurred at the There is no connection between the requirements. 1. Seattle is considering using some modern jigs and tools in the finishing operation that would increase annual finishing output by 1,200 units. The annual cost of these jigs and tools is $25,000. Should Seattle acquire these tools? Show your calculations. 2. The production manager of the Machining Department has submitted a proposal to do faster setups that would increase the annual capacity of the Machining Department by 13,500 units and would cost $32,000 per year. Should Seattle implement the change? Show your calculations. 3. An outside contractor offers to do the finishing operation for 17,000 units at $10 per unit, double the $5 per unit that it costs Seattle to do the finishing in-house. Should Seattle accept the subcontractor's offer? Show your Read the requirements. Requirement 1. Seattle is considering using some modern jigs and tools in th calculations. Producing 1,200 more units will generate contribution (throughput) ma calculations. 4. The Heaton Corporation offers to machine 6,800 units at $4 per unit, half the S8 per unit that it costs Seattle to do the machining in-house. Should Seattle accept Heaton's offer? Show your calculations. 5. Seattle produces 1,800 defective units at the machining operation. What is the cost to Seattle of the defective items produced? Explain your answer briefly. 6. Seattle produces 1,800 defective units at the finishing operation. What is the cost to Seattle of the defective items produced? Explain your answer briefly. Print Done
The Seattle Corporation manufactures filing cabinets in two operations: machining and finishing. It provides the following information: E (Click the icon to view the department information.) Each cabinet sells for $105 and has direct material costs of $70 incurred at the start of the machining operation. Seattle has no other variable costs. Seattle can sell whatever output it produces. The following requirements refer only to the preceding data. There is no connection between the requirements. Read the requirements Requirement 1. Seattle is considering using some modern jigs and tools in the finishing operation that would increase annual finishing output by 1,200 units. The annual cost of these jigs and tools is $25,000. Should Seattle acquire these tools? Show your calculations. Producing 1,200 more units will generate V contribution (throughput) margin and operating income because Data table Machining Finishing Annual capacity 150,000 units 125.000 units Annual production 125,000 units 125,000 units $1,000,000 $625,000 Fixed operating costs (excluding direct materials) Fixed operating costs per unit produced ($1,000,000 + 125,000; $625,000 + 125,000) $8 per unit $5 per unit Print Done
Transcribed Image Text:The Seattle Corporation manufactures filing cabinets in two operations: machining and finishing. It provides the following information: E (Click the icon to view the department information.) Each cabinet sells for $105 and has direct material costs of $70 incurred at the start of the machining operation. Seattle has no other variable costs. Seattle can sell whatever output it produces. The following requirements refer only to the preceding data. There is no connection between the requirements. Read the requirements Requirement 1. Seattle is considering using some modern jigs and tools in the finishing operation that would increase annual finishing output by 1,200 units. The annual cost of these jigs and tools is $25,000. Should Seattle acquire these tools? Show your calculations. Producing 1,200 more units will generate V contribution (throughput) margin and operating income because Data table Machining Finishing Annual capacity 150,000 units 125.000 units Annual production 125,000 units 125,000 units $1,000,000 $625,000 Fixed operating costs (excluding direct materials) Fixed operating costs per unit produced ($1,000,000 + 125,000; $625,000 + 125,000) $8 per unit $5 per unit Print Done
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