Managerial Accounting: Tools for Business Decision Making
7th Edition
ISBN: 9781118334331
Author: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Publisher: WILEY
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Textbook Question
Chapter 6, Problem 6.19E
Crate Express Co. produces wooden crates used for shipping products by ocean liner. In 2017, Crate Express incurred the following costs.
| Wood used in crate production | $54,000 |
| Nails (considered insignificant and a variable expense) | $ 350 |
| Direct labor | $43,000 |
| Utilities for the plant: | |
| $1,500 each month. | |
| plus $0.50 for each kilowatt-hour used each month | |
| Rent expense for the plant for the year | $21,400 |
Assume Crate Express used an average 500 kilowatt-hours each month over the past year.
Instructions
(a) What is Crate Express's total manufacturing cost if it uses a variable costing approach?
(b) What is Crate Express's total manufacturing cost if it uses an absorption costing approach?
(c) What accounts for the difference in
Compute manufacturing cost under absorption and variable costing and explain difference.
(LO 5), AN
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Students have asked these similar questions
Easton Company makes and sells scooters. Easton incurred the following costs in its most recent fiscal year:
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Advertising costs (150,000 per year)
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Easton can currently purchase the scooters it makes from Weston Company. If the company purchases the scooters, Easton would still continue to use its own logo, sales staff, and advertising programs. If Easton outsources the scooters to Weston,
which of the following costs would be relevant to the outsourcing decision?
Multiple Choice
X
Materials cost
Shipping and handling
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All of these answers are correct.
Blossom Express Co. produces wooden crates used for shipping products by ocean liner. In 2022, Blossom
Express incurred the following costs.
Wood used in Blossom production
$56,000
Nails (considered insignificant and a variable expense)
$420
Direct labor
$43,300
Utilities for the plant:
$1,600 each month,
plus $0.50 for each kilowatt-hour used each month
Rent expense for the plant for the year
$25,600
Assume Blossom Express used an average 600 kilowatt-hours each month over the past year.
(a) What is Blossom Express's total manufacturing cost if it uses a variable costing approach?
Total manufacturing costs
$
(b) What is Blossom Express's total manufacturing cost if it uses an absorption costing approach?
Total manufacturing costs
2$
Product A is produced with the following costs:
1)     Paper material  P20 per unit
2)     Plastic        P15 per unit
3)   Rubber       P27000 per 12000 units.
4)     Labor         P4 per unit
5)   Indirect material costs  P2.5 per unit
The company pays P60,000 for rent  per month for factory. It depreciates a P300,000 vehicle used for delivery and a P210,000-machine used for manufacturing, both have a life of 5 years.
Â
a. Â How much should be the total overhead costs if in a month, 1000 units were produced?
b. Â How much should be the direct material costs if in a month, 1,500 units were produced?
c. How much is the total conversion cost if 3,000 units are produced?
d.How much is the total product cost per unit if in a month of production 4,750 units were produced?
e. How many units should be sold in a month to break even?
Chapter 6 Solutions
Managerial Accounting: Tools for Business Decision Making
Ch. 6 - What is meant by CVP analysis?Ch. 6 - Provide three examples of management decisions...Ch. 6 - Prob. 3QCh. 6 - Describe the features of a CVP income statement...Ch. 6 - The traditional income statement for Wheat Company...Ch. 6 - Prob. 6QCh. 6 - What is meant by the term sales mix? How does...Ch. 6 - Prob. 8QCh. 6 - Prob. 9QCh. 6 - Prob. 10Q
Ch. 6 - What is the theory of constraints? Provide some...Ch. 6 - What is meant by "cost structure? Explain how a...Ch. 6 - What is operating leverage? How does a company...Ch. 6 - Prob. 14QCh. 6 - Prob. 15QCh. 6 - Prob. 16QCh. 6 - Distinguish between absorption costing and...Ch. 6 - Prob. 18QCh. 6 - Prob. 19QCh. 6 - Prob. 20QCh. 6 - Prob. 21QCh. 6 - Prob. 22QCh. 6 - Determine missing amounts for contribution margin....Ch. 6 - Hamby Inc. has sales of 2,000,000 for the first...Ch. 6 - Prob. 6.3BECh. 6 - Prob. 6.4BECh. 6 - Prob. 6.5BECh. 6 - Prob. 6.6BECh. 6 - NoFly Corporation sells three different models of...Ch. 6 - Information for NoFly Corporation is given in...Ch. 6 - Prob. 6.9BECh. 6 - Prob. 6.10BECh. 6 - In Marshall Company, data concerning two products...Ch. 6 - Prob. 6.12BECh. 6 - Prob. 6.13BECh. 6 - Prob. 6.14BECh. 6 - Prob. 6.15BECh. 6 - Compute product costs under variable costing. (LO...Ch. 6 - Compute product costs under absorption costing....Ch. 6 - Prob. 6.18BECh. 6 - Prob. 6.19BECh. 6 - Victoria Company reports the following operating...Ch. 6 - Prob. 6.2DICh. 6 - Zoom Corporation manufactures and sells three...Ch. 6 - Prob. 6.4DICh. 6 - Prob. 6.1ECh. 6 - In the month of June, Jose Heberts Beauty Salon...Ch. 6 - Compute net income under different alternatives....Ch. 6 - Prob. 6.4ECh. 6 - Prob. 6.5ECh. 6 - Yard Tools manufactures lawnmowers, weed-trimmers,...Ch. 6 - PDQ Repaint has 200 auto-maintenance service...Ch. 6 - Express Delivery is a rapidly growing delivery...Ch. 6 - Prob. 6.9ECh. 6 - Determine break-even point in dollars for two...Ch. 6 - Mars Company manufactures and sells three...Ch. 6 - Compute contribution margin and determine the...Ch. 6 - Helena Company manufactures and sells two...Ch. 6 - The CVP income statements shown below are...Ch. 6 - Casas Modernas of Juarez, Mexico, is contemplating...Ch. 6 - Prob. 6.16ECh. 6 - Compute product cost and prepare an income...Ch. 6 - Prob. 6.18ECh. 6 - Crate Express Co. produces wooden crates used for...Ch. 6 - Midlands Inc. had a bad year in 2016. For the...Ch. 6 - Lorge Corporation has collected the following...Ch. 6 - Determine break-even sales under alternative sales...Ch. 6 - Prob. 6.4APCh. 6 - The following CVP income statements are available...Ch. 6 - Bonita Beauty Corporation manufactures cosmetic...Ch. 6 - Prepare income statements under absorption costing...Ch. 6 - Dilithium Batteries is a division of Enterprise...Ch. 6 - CURRENT DESIGNS Current Designs manufactures two...Ch. 6 - Prob. 6.1BYPCh. 6 - Managerial Analysis For nearly 20 years,...Ch. 6 - Real-World Focus In a recent report, the Del Monte...Ch. 6 - The June 8, 2009, edition of the Wall Street...Ch. 6 - Prob. 6.6BYPCh. 6 - Ethics Case Brett Stem was hired during January...Ch. 6 - Prob. 6.9BYP
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