Managerial Accounting
15th Edition
ISBN: 9781337912020
Author: Carl Warren, Ph.d. Cma William B. Tayler
Publisher: South-Western College Pub
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Chapter 11, Problem 20E
To determine
Ascertain the product which should be emphasized to generate maximum profit.
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Product Decisions Under Bottlenecked Operations
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 $176,000 for the company as a whole. In addition, the following information is available about the three products:
Line Item Description
Large
Medium
Small
Unit selling price
$254
$143
$266
Unit variable cost
(200)
(117)
(234)
Unit contribution margin
$ 54
$ 26
$ 32
Autoclave hours per unit
6
2
4
Total process hours per unit
12
4
12
Budgeted units of production
3,500
3,500
3,500
a. Determine the contribution margin by glass type and the total company operating income for the budgeted units of production.
Line Item Description
Large…
Office Products Inc. manufactures and sells various high-tech office automation products.
Two divisions of Office products Inc. 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
Variable cost per chip
Fixed production cost
Fixed SG & A costs
Monthly capacity
External sales
Internal sales
$50
$20
$60,000
$90,000
$50
$45
$20
10,000 chips
6,000 chips
0 chips
Presently the Computer Division purchases no chips from the Computer Chip Division, but
instead pays $45 to an external supplier for the 4,000 chips it needs each month.
Assume that next month's costs and levels of operation in the Computer and the Computer
Chip Divisions are similar to this month. What is the minimum of the transfer price range for
a possible…
Office Products Inc. manufactures and sells various high-tech office automation products.
Two divisions of Office products Inc. 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
Variable cost per chip
Fixed production cost
Fixed SG & A costs
Monthly capacity
External sales
Internal sales
$50
$20
$60,000
$90,000
$30
$45
$35
$50
10,000 chips
6,000 chips
0 chips
Presently the Computer Division purchases no chips from the Computer Chip Division, but
instead pays $45 to an external supplier for the 4,000 chips it needs each month.
Assume that next month's costs and levels of operation in the Computer and the Computer
Chip Divisions are similar to this month. What is the maximum of the transfer price range for
a possible…
Chapter 11 Solutions
Managerial Accounting
Ch. 11 - Explain the meaning of (A) differential revenue,...Ch. 11 - A company could sell a building for 250,000 or...Ch. 11 - A chemical company has a commodity-grade and...Ch. 11 - A company accepts incremental business at a...Ch. 11 - Prob. 5DQCh. 11 - Prob. 6DQCh. 11 - Prob. 7DQCh. 11 - Although the cost-plus approach to product pricing...Ch. 11 - How does the target cost method differ from...Ch. 11 - Prob. 10DQ
Ch. 11 - Lease or sell Plymouth Company owns equipment with...Ch. 11 - Prob. 2BECh. 11 - Make or buy A company manufactures various-sized...Ch. 11 - Replace equipment A machine with a book value of...Ch. 11 - Prob. 5BECh. 11 - Prob. 6BECh. 11 - Prob. 7BECh. 11 - Prob. 8BECh. 11 - Differential analysis for a lease or sell decision...Ch. 11 - Prob. 2ECh. 11 - Differential analysis for a discontinued product A...Ch. 11 - Differential analysis for a discontinued product...Ch. 11 - Prob. 5ECh. 11 - Prob. 6ECh. 11 - Make-or-buy decision Somerset Computer Company has...Ch. 11 - Prob. 8ECh. 11 - Machine replacement decision A company is...Ch. 11 - Differential analysis for machine replacement...Ch. 11 - Sell or process further Calgary Lumber Company...Ch. 11 - Sell or process further Dakota Coffee Company...Ch. 11 - Prob. 13ECh. 11 - Accepting business at a special price Box Elder...Ch. 11 - Prob. 15ECh. 11 - Prob. 16ECh. 11 - Product cost method of product costing Smart...Ch. 11 - Target costing Toyota Motor Corporation (TM) uses...Ch. 11 - Prob. 19ECh. 11 - Prob. 20ECh. 11 - Prob. 21ECh. 11 - Total cost method of product pricing Based on the...Ch. 11 - Variable cost method of product pricing Based on...Ch. 11 - Differential analysis involving opportunity costs...Ch. 11 - Differential analysis for machine replacement...Ch. 11 - Differential analysis for sales promotion proposal...Ch. 11 - Prob. 4PACh. 11 - Product pricing and profit analysis with...Ch. 11 - Product pricing using the cost-plus approach...Ch. 11 - Prob. 1PBCh. 11 - Differential analysis for machine replacement...Ch. 11 - Prob. 3PBCh. 11 - Prob. 4PBCh. 11 - Prob. 5PBCh. 11 - Prob. 6PBCh. 11 - Analyze Pacific Airways Pacific Airways provides...Ch. 11 - Service yield pricing and differential equations...Ch. 11 - Prob. 3MADCh. 11 - Prob. 4MADCh. 11 - Aaron McKinney is a cost accountant for Majik...Ch. 11 - Prob. 3TIFCh. 11 - Decision on accepting additional business A...Ch. 11 - Accepting service business at a special price If...Ch. 11 - Identifying product cost distortion Peachtree...Ch. 11 - Prob. 1CMACh. 11 - Prob. 2CMACh. 11 - Aril Industries is a multiproduct company that...Ch. 11 - Oakes Inc. manufactured 40,000 gallons of Mononate...
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