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 $25,600 Assume Blossom Express used an average 600 kilowatt-hours each month over the past year. (a) What is Blossom Express's total manufacturing cost if it uses a variable costing approach? Total manufacturing costs 2$ 103320 (b) What is Blossom Express's total manufacturing cost if it uses ar absorption costing approach? Total manufacturing costs 2$ 128920

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 $25,600 Assume Blossom Express used an average 600 kilowatt-hours each month over the past year. (a) What is Blossom Express's total manufacturing cost if it uses a variable costing approach? Total manufacturing costs 2$ 103320 (b) What is Blossom Express's total manufacturing cost if it uses ar absorption costing approach? Total manufacturing costs 2$ 128920

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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$
ABC Company must decide whether it must continue to produce an engine component or buy it from Engine Co. for P25,000 each. The demand for the coming year is 20 units. The costs of producing a single unit of the engine component are as follows: Direct materials P13,000Direct labor 7,000Factory Overhead (80% fixed) 10,000Total P30,000 If ABC buys the components, the facility now used to make the components can be rented out to another firm for P100,000. REQUIREMENTS: 1. Should ABC make or buy the components? 2. How much is the maximum amount that ABC is willing to pay an outside supplier for the engine component? Pls show solutions per requirement.
Model Company manufactures a single electronic product called Lastik. Lastik sells for P900 per unit. In 2019, the following variable costs were incurred to produce each Lastik device. Direct labor P180 Direct materials P240 Factory overhead P105 Selling costs P75 Total variable costs P600 Model is subject to 40 percent income tax rate, and annual fixed costs are P6,600,000. Except for an operating loss incurred in the year of incorporation, the firm has been profitable over the last five years. In 2020, a significant change in Model's production technology caused a 10% increase in annual fixed costs and a 20% unit cost increase in the direct labor component as a result of higher skilled direct labor. However, this change permitted the replacement of a costly imported component with a local component. The effect was to reduce unit material costs by 25%. There has been no change in the Lastik selling price. What sales volume in units and amount should Model Company achieve in order to…
Damon Industries manufactures 16,000 components per year. The manufacturing costs of the components were determined as follows: Direct materials $ 134,000 Direct labor 21,500 Variable manufacturing overhead 61,000 Fixed manufacturing overhead 81,000 An outside supplier has offered to sell the component for $15. If Damon purchases the component from the outside supplier, the manufacturing facilities would be unused and could be rented out for $11,700. If Damon purchases the component from the supplier instead of manufacturing it, the effect on operating profits would be a:
Clemente Inc. incurs the following costs to produce 10,000 units of a subcomponent:Direct materials $8400 Direct Labor $11,250 Variable overhead $12,600 Fixed overhead $16,200 An outside supplier has offered to sell Clemente the subcomponent for $2.85 a unit. If Clemente accepts the offer, by how much will net income increase (decrease)? $3,750 $19,950 $(8,850) $(2,850)
Damon Industries manufactures 29,000 components per year. The manufacturing costs of the components was determined as follows: Direct materials $ 145,000 Direct labor 169,000 Variable manufacturing overhead 69,000 Fixed manufacturing overhead 89,000 An outside supplier has offered to sell the component for $14. If Damon purchases the component from the outside supplier, the manufacturing facilities would be unused and could be rented out for $10,900. If Damon purchases the component from the supplier instead of manufacturing it, the effect on operating profits would be a: $81,100 increase. $12,100 decrease. $33,900 increase. $55,100 decrease.
Jasa Brothers Ltd has introduced a new product in the market. The company estimates a unit cost be for $15. Research indicates that the business could produce and sell 16,000 units each year for 4 years For this purpose, business need to purchase a new piece of machinery to manufacture the product and the following information has been prepared relating to this purchase: Purchase cost of machinery $120,000 Estimated scrap value of the machinery after 4 years $8,000 Operating Costs $8 per unit produced Operating Wage $30,000 per year 1. Calculate the payback period, net présent value (NPV), and the accounting rate of return (ARR) for the project. A required rate of return of 15% is assumed when calculating the NPV of a project for this company. 2. Referring to your calculations in part a, explain how the management of Jasra Brothers Ltd would decide whether to proceed with the project. Include in your answer a clear explanation of the payback, NPV and, ARR figures that you have…
Premier Co. produces park equipment and is currently producing 10,000 children swings annually. A supplier has offered to produce the swings for Premier Co. for $500 per swing. Premier Co. incurs unit-level costs of $490 per unit. Premier also spends $20,000 on product design each year and incurs $100,000 of facility-level costs. The avoidable production cost for Premier to produce one swing is
Levesque Company makes and sells lawn mowers for which it currently makes the engines. It has an opportunity to purchase the engines from a reliable manufacturer. The annual costs of making the engines are shown here. Cost of materials (20,000 Units × $26) $ 520,000 Labor (20,000 Units × $20) 400,000 Depreciation on manufacturing equipment* 42,000 Salary of supervisor of engine production 85,000 Rental cost of equipment used to make engines 23,000 Allocated portion of corporate-level facility-sustaining costs 80,000 Total cost to make 20,000 engines $ 1,150,000 *The equipment has a book value of $90,000 but its market value is zero.Required Determine the maximum price per unit that Levesque would be willing to pay for the engines. Determine the maximum price per unit that Levesque would be willing to pay for the engines, if production increased to 24,000 units.
2) TablMor Inc. Company manufactures furniture, including tables. Selected costs are given below: 1. The salary of the CEO of the company is $250,000 per year. 2. Instead of producing the tables, the company could rent its factory space for $85,000 per year. 3. Salespeople are paid a commission of $23 for each table sold. 4. The depreciation on the machines used to make the tables totals $38,000 per year. The machines have no resale value and do not wear out through use. 5. The tables are made of iron that costs $250 per table. 6. The production line - on which workers are assembling the tables - is supervised by a production- manager who is paid $67,000 per year. 7. Four machine-hours are required to produce a table. Utility costs are $8 per machine-hour. 8. Wages are paid to workers that assemble tables. The cost of wages is $55 per table. 9. The advertising expense of the year is $180,000 per year. It covers all the company's products. The company produced 100 tables and sold 80…
6) TablMor Inc. Company manufactures furniture, including tables. Selected costs are given below: 1. The salary of the CEO of the company is $250,000 per year. 2. Instead of producing the tables, the company could rent its factory space for $85,000 per year. 3. Salespeople are paid a commission of $23 for each table sold. 4. The depreciation on the machines used to make the tables totals $38,000 per year. The machines have no resale value and do not wear out through use. 5. The tables are made of iron that costs $250 per table. 6. The production line - on which workers are assembling the tables - is supervised by a production- manager who is paid $67,000 per year. 7. Four machine-hours are required to produce a table. Utility costs are $8 per machine-hour. 8. Wages are paid to workers that assemble tables. The cost of wages is $55 per table. 9. The advertising expense of the year is $180,000 per year. It covers all the company's products. The company produced 100 tables and sold 80…
Sunrise, Inc. manufactures gears as a component for its product. In 2022, Sunrise incurred the following costs in producing 12,000 pieces of gears: direct materials – P120,000; direct labor – P80,000; variable manufacturing overhead – P100,000; fixed manufacturing overhead – P200,000; and fixed non-manufacturing costs – P150,000. Makina Corp. offers to produce the 15,000 pieces of the gear component for Sunrise, Inc. needs in 2023. If the latter (Sunrise) accepts to buy the gears from Makina, 40% of the fixed manufacturing overhead will be avoided, but fixed non-manufacturing costs will not change. At what selling price of each gear from Makina will make Sunrise indifferent on whether to produce or buy the said gear components?