Problem 23-2A (Algo) Scrap or rework LO P2 Hip Manufacturing produces denim clothing. This year it produced 3,320 denim jackets at a cost of $99,600. These jackets were damaged in the warehouse during storage. Management identified three alternatives for these jackets. 1. Jackets can be sold as scrap to a secondhand clothing shop for $19,920. 2. Jackets can be disassembled at a cost of $6,640 and sold to a recycler for $39,840. 3. Jackets can be reworked and turned into good jackets. The cost of reworking the jackets will be $112,880, and the jackets can then be sold for $149,400. Required: (1) Compute the income for each alternative. (2) Which alternative should be chosen? Scrap, Recycle or Rework Analysis Revenue from scrap/recycle/rework Cost of recycled/reworked units Income Scrap Recycle Rework $ ° $ 0 $

Problem 23-2A (Algo) Scrap or rework LO P2 Hip Manufacturing produces denim clothing. This year it produced 3,320 denim jackets at a cost of $99,600. These jackets were damaged in the warehouse during storage. Management identified three alternatives for these jackets. 1. Jackets can be sold as scrap to a secondhand clothing shop for $19,920. 2. Jackets can be disassembled at a cost of $6,640 and sold to a recycler for $39,840. 3. Jackets can be reworked and turned into good jackets. The cost of reworking the jackets will be $112,880, and the jackets can then be sold for $149,400. Required: (1) Compute the income for each alternative. (2) Which alternative should be chosen? Scrap, Recycle or Rework Analysis Revenue from scrap/recycle/rework Cost of recycled/reworked units Income Scrap Recycle Rework $ ° $ 0 $

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter17: Activity Resource Usage Model And Tactical Decision Making

Section: Chapter Questions

Problem 19E: Walloon Company produced 150 defective units last month at a unit manufacturing cost of 30. The...

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Walloon Company produced 150 defective units last month at a unit manufacturing cost of 30. The defective units were discovered before leaving the plant. Walloon can sell them as is for 20 or can rework them at a cost of 15 and sell them at the regular price of 50. What is the total relevant cost of reworking the defective units? a. 2,250 b. 3,000 c. 4,500 d. 6,750
Pasha Company produced 50 defective units last month at a unit manufacturing cost of 30. The defective units were discovered before leaving the plant. Pasha can sell them as is for 20 or can rework them at a cost of 15 and sell them at the regular price of 50. Which of the following is not relevant to the sell-or-rework decision? a. 30 b. 20 c. 15 d. 50
pts T UousənO Noteworthy, Inc., produces and sells small electronic keyboards. Assume that you have the following information about Noteworthy's costs for the most recent month. Depreciation on factory equipment $970 Depreciation on CEO's company car 240 Speakers used in the keyboard 1,170 Production supervisor's salarY 2,210 Glue and screws used in the keyboards 270 Wages of persons who install the speakers 2,930 Cost to run an ad on local radio stations 650 Utilities for the factory 1,380 Personnel manager's salary 2,630 Wages of person who attaches legs to 2,140 keyboards Answer the following questions. 1. Calculate the total product cost for Noteworthy. 2. Calculate the prime cost for Noteworthy. 3. Calculate the manufacturing overhead for Noteworthy. 4. Calculate the direct labor for Noteworthy. 5. Calculate the conversion cost for Noteworthy. Edit Format Table 12pt v Paragraph v BIUA 2 T?
Question 6:Part (a)What are the two methods to account for by-products? Which is the moreappropriate method to use and why?Part (b)The Carolina Company prepares lumber for companies who manufacturefurniture. The main product is finished lumber with a by-product of woodshavings. The by-product is sold to plywood manufacturers. For August 2020,the manufacturing process incurred $332,000 in total costs. Eighty thousandboard feet of lumber were produced and sold along with 6,800 pounds ofshavings. The finished lumber sold for $6.00 per board foot and the shavingssold for $0.60 a pound. There were no beginning or ending inventories.Required: Prepare an income statement showing the by-product as:(1) a cost reduction during production and(2) a revenue item when sold
PROBLEM 22: On December 24, 2021, a fire destroyed totally the raw materials bodegaof Sana’a Manufacturing Company. There was no purchase of raw materials fromthe time of thefire until December 31, 2021: 1/1/2021 12/31/2021 Raw materials P 90,000 ? Factory supplies 6,000 P 5,000 Goods in process 185,000 210,000 Finished goods 220,000 225,000 The accounting records show the following data: Sales P 1,200,000 Purchases of raw materials 400,000 Purchases of factory supplies 30,000 Freight in on raw materials 15,000 Direct labor 220,000 Manufacturing overhead 75% of direct labor Gross profit rate 35% of sales The cost of raw materials destroyed by fire was:
Question 4 You are contemplating leaving your full-time employment to concentrate your ability on the marketing of a new low-energy portable heater. You have spoken to a group of manufacturers of similar product, and you have produced the following data based upon the production of 1200 heaters in the six months to December 31, 2021. R R Unit selling price 160 Less: Direct materials 50 Direct labour 30 Fixed Overheads: Admin 4.00 Rent 7.50 Rates…
MI * 00 因 44 CO In its Department R, Recyclers, Inc., processes donated scrap cloth into towels for sale in local thrift shops. It sells the products at cost. The direct materials costs are zero, but the operation requires the use of direct labor and overhead. The company uses a process costing system and tracks the processing volume and costs incurred in each period. At the start of the current period, 500 towels were in process and were 60 percent complete. The costs incurred were $1,780. During the month, costs of $20,150 were incurred, 3,100 towels were started, and 250 towels were still in process at the end of the month. At the end of the month, the towels were 20 percent complete. Required: a. Prepare a production cost report, the company uses weighted-average process costing. b. Show the flow of costs through T-accounts. Assume that current period conversion costs are credited to various payables. Complete this question by entering your answers in the tabs below. Required A…
Question 5 You are contemplating leaving your full-time employment to concentrate your ability on the marketing of a new low-energy portable heater. You have spoken to a group of manufacturers of similar product, and you have produced the following data based upon the production of 1200 heaters in the six months to December 31, 2021. R R Unit selling price 160 Less: Direct materials 50 Direct labour 30 Fixed Overheads: Admin 4.00 Rent 7.50 Rates…
Question 17 You are contemplating leaving your full-time employment to concentrate your ability on the marketing of a new low-energy portable heater. You have spoken to a group of manufacturers of similar product, and you have produced the following data based upon the production of 1200 heaters in the six months to December 31, 2021. R R Unit selling price 160 Less: Direct materials 50 Direct labour 30 Fixed Overheads: Admin 4.00 Rent 7.50 Rates…
Problem 10: Spoiled Goods Josh Inc. has completed the Job 101, containing 2,200 shoes, during 2016 at the following unit costs: Direct materials Direct labor 2,000 1,000 1,300 Factory overhead (including an allowance of P300 for spoiled work) Final inspection of Job 101 disclosed 200 spoiled shoes which were sold to a department for P400,000. Required: 1. What is the unit cost of shoes produced on Job 101 if spoilage loss is common to all jobs? 2. What is the unit cost of shoes produced on Job 101 if spoilage loss is charged to specific Job 101?
Problem 16-11 (Algo) One of your Taiwanese suppliers has bid on a new line of molded plastic parts that is currently being assembled at your plant. The supplier has bid $0.10 per part, given a forecast you provided of 200,000 parts in year 1; 400,000 in year 2; and 700,000 in year 3. Shipping and handling of parts from the supplier's factory is estimated at $0.02 per unit. Additional inventory handling charges should amount to $0.004 per unit. Finally, administrative costs are estimated at $10 per month. Although your plant is able to continue producing the part, the plant would need to invest in another molding machine, which would cost $10,000. Direct materials can be purchased for $0.05 per unit. Direct labor is estimated at $0.04 per unit for wages plus a 50 percent surcharge for benefits and, indirect labor is estimated at $0.009 per unit plus 50 percent benefits. Up-front engineering and design costs will amount to $30,000. Finally, management has insisted that overhead be…
Problem 16-11 (Algo) One of your Taiwanese suppliers has bid on a new line of molded plastic parts that is currently being assembled at your plant. The supplier has bid $0.10 per part, given a forecast you provided of 200,000 parts in year 1; 400,000 in year 2; and 700,000 in year 3. Shipping and handling of parts from the supplier's factory is estimated at $0.02 per unit. Additional Inventory handling charges should amount to $0.004 per unit. Finally, administrative costs are estimated at $10 per month. Although your plant is able to continue producing the part, the plant would need to invest in another molding machine, which would cost $10,000. Direct materials can be purchased for $0.05 per unit. Direct labor is estimated at $0.04 per unit for wages plus a 50 percent surcharge for benefits and, Indirect labor is estimated at $0.009 per unit plus 50 percent benefits. Up-front engineering and design costs will amount to $30,000. Finally, management has insisted that overhead be…