Sustainability and
SUSTAINABILITY
Lancaster Plastics manufactures custom park furniture and signage from recycled plastics (primarily shredded milk jugs). Many of the company’s customers are municipalities that are required by law to purchase goods that meet certain recycled-content guidelines. (Recycled content can include post-consumer waste materials, pre-consumer waste materials, and recovered materials). As a result, Lancaster Plastics includes two types of direct material charges in its job cost for each job: (1) virgin materials (non-recycled), and (2) recycled-content materials. Lancaster Plastics also keeps track of the pounds of each type of direct material so that the final recycled-content percentage for the job can be reported to the customer. The company also reports on the percentage of recycled-content as a total of plastics used each month on its own internal reporting system to help encourage managers to use recycled content whenever possible.
Lancaster Plastics uses a predetermined manufacturing
Description | Quantity | Cost |
Virgin materials | 80 Pounds | $ 3.80 per pound |
Recycled content material | 120 Pounds | $ 2.60 per pound |
Direct labor | 12 hours | $ 16.00 per hour |
Requirements
- 1. Calculate the total cost of the Lyon County job.
- 2. Calculate the percentage of recycled-content used in the Lyon County job (using pounds.) If items purchased by Lyon County are required by county charter to contain at least 40% recycled-content, does the job meet that requirement?
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Managerial Accounting (5th Edition)
- Use ABC to allocate manufacturing overhead (Learning Objective 2)Several years after reengineering its production process, King Corporation hired a new controller, Christine Erickson . She developed an ABC system very similar to the one used by King's chief rival. Part of the reason Erickson developed the ABC system was because King's profits had been declining, even though the company had shifted its product mix toward the product that had appeared most profitable under the old system . Before adopting the new ABC system, the company had used a plantwide overhead rate, based on direct labor hours developed years ago .For the upcoming year, King's budgeted ABC manufacturing overhead allocation rates are as follows :ActivityMaterials handling .......................... Machine setup ................................ Insertion of parts ............................ Finishing .........................................Allocation BaseNumber of partsNumber of setupsNumber of partsFinishing…arrow_forwardexample paper for this weeks individual project This list contains costs that various organizations incur; they fall into three categories: direct materials (DM), direct labor (DL), or overhead (OH). Classify each of these items as direct materials, direct labor, or overhead, and provide the rationale for your classification decision. Glue used to attach labels to bottles containing a patented medicine. Compressed air used in operating paint sprayers for Student Painters, a company that paints houses and apartments. Insurance on a factory building and equipment. A production department supervisor’s salary. Rent on factory machinery. Iron ore in a steel mill. Oil, gasoline, and grease for forklift trucks in a manufacturing company’s warehouse. Services of painters in building construction. Cutting oils used in machining operations. Cost of paper towels in a factory employees’ washroom. Payroll taxes and fringe benefits related to direct labor. The plant electricians’ salaries. Crude…arrow_forwardTriad Children's Center(TCC), a non-profit organization, uses relevant cost analysis to determine whether new services are desirable. TCC is looking at adding a new education program for grade school children who are having difficulty with the reading and math skills. The following relevant cost are expected if the program is accepted:arrow_forward
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