Walsh Automobile Company fabricates automobiles. Each vehicle includes one airflow sensor, which is currently made in-house. Details of the airflow sensor fabrication are as follows: Volume Variable cost per unit Fixed costs units per month per unit $13,000 per month A. decrease by $4,000 B. increase by $13,000 O C. decrease by $13,000 O D. increase by $4,800 800 $6 A Japanese factory has offered to supply Walsh with ready-made units for a cost of $16 per sensor. Assume that Walsh's fixed costs could be reduced by $4,000 if it outsources and that Walsh will not be able to use the excess capacity in any profitable manner. If Walsh decides to outsource, monthly operating income will:
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- Make or Buy Filtration, Inc. manufactures filters for use in secondary water irrigation systems. The costs per unit, for 20,000 filters, are as follows. Direct materials $6.00 Direct labor 7.00 Variable overhead 1.00 Fixed overhead 2.00 Total costs $16.00 Irrigation Products has offered to sell 20,000 filters to Filtration for $16 per filter. If Filtration accepts Irrigation Products’ offer, the facilities used to manufacture filters could be used to produce refrigerator filtration units. Revenues from the sale of refrigerator filtration units are estimated at $54,000, with variable costs amounting to 50% of sales. In addition, $1 per unit of the fixed overhead associated with the manufacture of secondary water irrigation filters could be eliminated. Compute the following: Cost to make filters Answer Cost to buy filters Answer Should Filtration, Inc. accept Irrigation Product’s offer? Yes, the cost to purchase the filters is less than the cost to…Each year, Giada Company produces 20,000 units of a component part used in tablet computers. An outside supplier has offered to supply the part for $1.39. The unit cost is: Direct materials $0.83 Direct labor 0.34 Variable overhead 0.13 Fixed overhead 2.55 Total unit cost $3.85 1. What are the alternatives for Giada Company? a. Make the part in house b.Buy the part externally c.Make the part in house or buy the part externally d.None 2. Assume that none of the fixed cost is avoidable. List the relevant cost(s) of internal production. a.Direct materials, direct labor and variable and fixed overhead b.Direct materials, direct labor and variable overhead c.Direct materials, direct labor and fixed overhead d.None List the relevant cost(s) of external purchase. a.Purchase price b.Sales price c.Material price d.None 3. Which alternative is more cost effective and by how much? a. Making the part in house b. Buying the part from the external supplier by $___________ 4. What if…Caribu Company produces sanitation products after processing specialized chemical The following relates to its activities: • 1 Kilogram of chemicals purchased for $2000 and with an additional $1000 is processed into 400 grams of Crystals and 80 litres of a Cleaning agent. At split-off, a gram of Crystal can be sold for $1 and the Cleaning agent can be sold for $4 per litre. At an additional cost of $400, Caribu can process the 400 grams of Crystal into 500 grams of Detergent that can be sold for $2 per gram. The 80 litres of Cleaning agent is packaged at an additional cost of $300 and made into 200 packs of Softener that can be sold for $2 per pack. Required: 1. Allocate the joint cost to the Detergent and the Softener using the following a Sales value at split-off method ( b. NRV method 2. Should Caribu have processed each of the products further? What effect does the allocation method have on this decision?
- Meow Products Ltd. in the US produces and sells scratching posts for cats. In the current year, the company had expected to sell 12 000 posts but actually produced and sold 10 000 posts. The following information is available regarding the standard cost to produce a single post: Direct materials:3 feet @ $3 per foot Direct labour:15 minutes @ $0.30 per minute In the current year, 14 000 feet of material were purchased out of which 9 500 feet were used at a cost of $3.55 per foot, and 160 000 direct labour minutes were incurred at a cost of $0.32 per minute. The company's direct materials price variance for the current year was: O $2 350 F O $23 100 U O $7 700 U $11 400 FVandenberg, Inc., produces and sells two products: a ceiling fan and a table fan. Vandenberg plans to sell 40,000 ceiling fans and 60,000 table fans in the coming year. Product price and cost information includes: Ceiling Fan Table Fan Price $54 $12 Unit variable cost $11 $9 Direct fixed cost $20,800 $41,000 Common fixed selling and administrative expenses total $84,000. Required: 1. What is the sales mix estimated for next year (calculated to the lowest whole number for each product)?Sales mix of ceiling fans to table fans = _______ : __________ 2. Using the sales mix from Requirement 1, form a package of ceiling fans and table fans. How many ceiling fans and table fans are sold at break-even? Round your intermediate calculations and final answers to the nearest whole number. Break-even ceiling fans ______ Break-even table fans _______ 3. Prepare a contribution-margin-based income statement for Vandenberg, Inc., based on the unit sales…Petoskey Electronics Company manufactures specialized products for boats and recreational vehicles using its newly introduced patented engine analytics device. The first-year revenues and costs for the product device are as follows: Selling price $500 per unitDirect materials $175 per unitDirect labor $45 per unitVariable manufacturing overhead $40 per unitTotal fixed manufacturing overhead $1,600,000Variable selling and administrative $30 per unitTotal fixed selling and administrative $500,000Sales and manufacturing volume 25,000 units The second year the product device was available, Petoskey Company sold only 12,000 units of its device, because a competitor, Charlevoix Supply Company, produced and sold an identical device. Petoskey Company decided to file a lawsuit against the competitor for damages (in the form of lost profits) caused by the patent infringement. REQUIRED: 2.) Assume that Charlevoix Company is liable as alleged by Petoskey Company in the…
- Petoskey Electronics Company manufactures specialized products for boats and recreational vehicles using its newly introduced patented engine analytics device. The first-year revenues and costs for the product device are as follows: Selling price $500 per unitDirect materials $175 per unitDirect labor $45 per unitVariable manufacturing overhead $40 per unitTotal fixed manufacturing overhead $1,600,000Variable selling and administrative $30 per unitTotal fixed selling and administrative $500,000Sales and manufacturing volume 25,000 units The second year the product device was available, Petoskey Company sold only 12,000 units of its device, because a competitor, Charlevoix Supply Company, produced and sold an identical device. Petoskey Company decided to file a lawsuit against the competitor for damages (in the form of lost profits) caused by the patent infringement. REQUIRED: 1.) Calculate Petoskey Company’s profit on this product device during the first year it…Filtration, Inc. manufactures filters for use in secondary water irrigation systems. The costs per unit, for 20,000 filters, are as follows. Direct materials $8.00 Direct labor 9.00 Variable overhead 1.00 Fixed overhead 2.00 Total costs $20.00 Irrigation Products has offered to sell 20,000 filters to Filtration for $20 per filter. If Filtration accepts Irrigation Products’ offer, the facilities used to manufacture filters could be used to produce refrigerator filtration units. Revenues from the sale of refrigerator filtration units are estimated at $57,000, with variable costs amounting to 50% of sales. In addition, $1 per unit of the fixed overhead associated with the manufacture of secondary water irrigation filters could be eliminated. Compute the following: Cost to make filters Answer Cost to buy filters Answer Should Filtration, Inc. accept Irrigation Product’s offer? Yes, the cost to purchase the filters is less than the cost to make them.…Vandenberg, Inc., produces and sells two products: a ceiling fan and a table fan. Vandenberg plans to sell 40,000 ceiling fans and 70,000 table fans in the coming year. Product price and cost information includes: Ceiling Fan Table Fan Price $56 $17 Unit variable cost $13 $8 Direct fixed cost $21,200 $43,000 Common fixed selling and administrative expenses total $98,000. Required: 1. What is the sales mix estimated for next year (calculated to the lowest whole number for each product)?Sales mix of ceiling fans to table fans = ______ : _____ 2. Using the sales mix from Requirement 1, form a package of ceiling fans and table fans. How many ceiling fans and table fans are sold at break-even? Round your intermediate calculations and final answers to the nearest whole number. Break-even ceiling fans ______ Break-even table fans ______ 3. Prepare a contribution-margin-based income statement for Vandenberg, Inc., based on the unit sales calculated in Requirement 2. If…
- Vandenberg, Inc., produces and sells two products: a ceiling fan and a table fan. Vandenberg plans to sell 40,000 ceiling fans and 50,000 table fans in the coming year. Product price and cost information includes: Ceiling Fan Table Fan Price $52 $15 Unit variable cost $12 $9 Direct fixed cost $25,200 $48,000 Common fixed selling and administrative expenses total $78,000.See screenshotsCarina Company produces sanitation products after processing specialized chemicals; Thefollowing relates to its activities: 1 Kilogram of chemicals purchased for $2000 and with an additional $1000 isprocessed into 400 grams of Crystals and 80 litres of a Cleaning agent. At split-off, agram of Crystal can be sold for $1 and the Cleaning agent can be sold for $4 per litre.2. At an additional cost of $400, Carina can process the 400 grams of Crystal into 500grams of Detergent that can be sold for $2 per gram. The 80 litres of Cleaning agent ispackaged at an additional cost of $300 and made into 200 packs of Softener that canbe sold for $2 per pack.Required:1. Allocate the joint cost to the Detergent and the Softener using the following:a. Sales value at split-off method b. NRV method 2. Should Carina have processed each of the products further? What effect does the allocationmethod have on this decision?RampUp Storage Containers produces a 1,000-cubic-foot metal storage unit that is used by storage companies and other businesses needing low-cost, mobile storage units. The units sell for $3,000 per unit. The company uses a standard costing system. At the start of 2016, standard costs were set as follows: Standard cost per unit: $1,200 Material cost (6 prefabricated metal sheets × $200) Direct labor (10 hours × $20) 200 Overhead ($500 per unit) 500 Total $1,900 The overhead rate was calculated as follows: At the start of 2016, the company estimated that it would produce and sell 5,000 units and incur $500,000 of variable overhead costs and $2,000,000 of fixed overhead costs: Variable overhead Fixed overhead $ 500,000 2,000,000 2,500,000 5,000 Total Divided by estimated production Overhead cost per unit $ 500 Based on estimated sales, standard costs, and other information, the following budget was pre- pared: 2016 Budget (Expected Production and Sales of 5,000 Units) Sales $15,000,000…