Youngstown Glass Company manufactures three types of safety plate glass: large, medium, and small. All three products have high demand. Thus, Youngstown Glass is able to sell all the safety glass that it can make. The production process includes an autoclave operation, which is a pressurized heat treatment. The autoclave is a production bottleneck. Total fixed costs are $85,000 for the company as a whole. In addition, the following information is available about the three products:

Gibson Motors manufactures specialty tractors. It has two divisions: a Tractor Division and a Tire Division. The Tractor Division can use the tires produced by the Tire Division. The market price per tire is $75. The Tire Division has the following costs per tire: i (Click the icon to view the costs and additional information.) Read the requirements. Requirement 1. Assume that the Tire Division has excess capacity, meaning that it can produce tires for the Tractor Division without giving up any of its current tire sales to outsiders. If Gibson Motors has a negotiated transfer price policy, what is the lowest acceptable transfer price? What is the highest acceptable transfer price? (Assume the $1 includes only the variable portion of conversion costs.) The lowest acceptable transfer price is the Tire Division's Requirements 1. Assume that the Tire Division has excess capacity, meaning that it can produce tires for the Tractor Division without giving up any of its current tire sales to…

Deli's Fudge Factory currently makes fudge for retail and mail order customers. It also offers a variety of roasted nuts. Fudge sales have increased over the past year, so Deli is considering outsourcing the roasted nuts and using the roasting space to make additional fudge. A reliable supplier has quoted a price of £0.85 per pound for the roasted nuts. The following amounts reflect the in-house manufacturing costs per pound for the roasted nuts: Direct materials Direct labour Unit-related support costs Batch-related support costs Product-sustaining support costs Facility-sustaining support costs Total cost per pound £0.50 0.06 0.10 0.04 0.05 0.15 £0.90 Required: Should Deli's Fudge Factory outsource the roasted nuts? Why or why not? Discuss all items that should be considered. a.

Billings Company produces two products, Product Reno and Product Tahoe. Each product goes through its own assembly and finishing departments. However, both of them must go through the painting department. The painting department has capacity of 2,460 hours per year. Product Reno has a unit contribution margin of $120 and requires 5 hours of painting department time. Product Tahoe has a unit contribution margin of $75 and requires 3 hours of painting department time. There are no other constraints. Refer to the information for Billings Company above. Required: What is the contribution margin per hour of painting department time for each product? What is the optimal mix of products? What is the total contribution margin earned for the optimal mix?

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Leach Finishing makes various metal fittings for the construction industry. Three of the fittings, models X-12, X-24, and X-30, require grinding on a patented machine of which Leach has only one. The cost of production information for the three products follow: X-12 Price per fitting Variable cost per fitting Units per hour of grinding The testing machine used for both models has a capacity of 2,870 hours annually. Fixed manufacturing costs are $484,000 annually. Required A Required B X-24 $29 $ 14 18.0 X-12 X-24 X-30 units units units $ 45 X-30 $21 12.5 Required: a. Suppose that Leach Finishing can sell at most 55,600 units of any one fitting. How many units of each fitting model should Leach Finishing produce annually? b. Suppose that Leach Finishing can sell at most 15,300 units of any one fitting. How many units of each fitting should Leach Finishing produce annually? 15 Complete this question by entering your answers in the tabs below. $ 64 $38 10.0 Suppose that Leach Finishing…

TS Electronics is a manufacturer with two departments: computer chips and cell phones. The computer chip that is produced in the Chips Department can be sold to customers at $6.25 per chip. The costs associated with the computer chips are as follows: (Click the icon to view the computer chip costs.) The Cell Phone Department has been purchasing the chips that it needs for $4.00 per chip from Chip Universe, but the manager was thinking that if the Chips Department could supply the chips for less than what Chip Universe is asking, then it would arrange a transfer between departments instead of giving the business to an external company. If the Cell Phone Department needs 240,000 computer chips and current production in the Chips Department is 480,000 chips, should a transfer take place? If so, at what price? (Note: For internal transfers, the selling and administrative costs are reduced to $0.45 per unit.) What other qualitative factors might need to be considered? First, let's determine…

Fyodor Corporation has a Parts Division that does work for other Divisions in the company as well as for outside customers. The company's Machine Division has asked the Parts Division to provide it with 6,000 special parts each year. The special parts would require $21 per unit in variable production costs. The Machine Division has a bid from an outside supplier for the special parts at $31.20 per unit. In order to have time and space to produce the special part, the Parts Division would have to cut back production of another part-the QR4 that it presently is producing. The QR4 sells for $40 per unit and requires $20 per unit in variable production costs. Packaging and shipping costs of the QR4 are $2 per unit. Packaging and shipping costs for the new special part would be only $0.50 per unit. The Parts Division is now producing and selling 30,000 units of the QR4 each year. Production and sales of the QR4 would drop by 5% if the new special part is produced for the Machine Division.…

Peppertree Company has two divisions, East and West. Division East manufactures a component that Division West uses. The variable cost to produce this component is $1.56 per unit; full cost is $1.98. The component sells on the open market for $4.96.   Assuming Division East has excess capacity, what is the lowest price Division East will accept for the component? What is the highest price that Division West will pay for it? (Enter your answers in 2 decimal places.)

Hercules Steel Company produces three grades of steel: high, good, and regular grade. Each of these products (grades) has high demand in the market, and Hercules is able to sell as much as it can produce of all three. The furnace operation is a bottleneck in the process and is running at 100% of capacity. Hercules wants to improve steel operation profitability. The variable conversion cost is $15 per process hour. The fixed cost is $200,000. In addition, the cost analyst was able to determine the following information about the three products:   Category High Grade Good Grade Regular Grade Budgeted units produced 4,900 4,900 4,900 Total process hours per unit 11 10 9 Furnace hours per unit 4 3 2.5 Unit selling price $270 $260 $240 Direct materials cost per unit $85 $81 $75   The furnace operation is part of the total process for each of these three products. Thus, for example, 4.0 of the 12.0 hours required to process…