Required information[The following information applies to the questions displayed below.]Cane Company manufactures two products called Alpha and Beta that sell for $150 and $105, respectively. Each productuses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 107,000units of each product. Its average cost per unit for each product at this level of activity is given below:Direct materialsDirect laborVariable manufacturing overheadTraceable fixed manufacturing overheadVariable selling expensesCommon fixed expensesTotal cost per unitAlpha$ 302512211720$ 125Beta$ 102010231315$ 91The company's traceable fixed manufacturing overhead is avoidable, whereas its common fixed expenses areunavoidable and have been allocated to products based on sales dollars.Maximum price to be paid per pound15. Assume Cane's customers would buy a maximum of 85,000 units of Alpha and 65,000 units of Beta. Also assume the company'sraw material available for production is limited to 166,000 pounds. If Cane uses its 166,000 pounds of raw materials, up to how muchshould it be willing to pay per pound for additional raw materials?Note: Round your answer to 2 decimal places.

Traceable fixed manufacturing overhead is related to that particular product so that is avoidable in…

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Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 1PB: The following product costs are available for Stellis Company on the production of erasers: direct...

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Cool Pool has these costs associated with production of 20,000 units of accessory products: direct materials, $70; direct labor, $110; variable manufacturing overhead, $45; total fixed manufacturing overhead, $800,000. What is the cost per unit under both the variable and absorption methods?
The following product Costs are available for Haworth Company on the production of chairs: direct materials, $15,500; direct labor, $22.000; manufacturing overhead, $16.500; selling expenses, $6,900; and administrative expenses, $15,200. What are the prime costs? What are the conversion costs? What is the total product cost? What is the total period cost? If 7,750 equivalent units are produced, what is the equivalent material cost per unit? If 22,000 equivalent units are produced, what is the equivalent conversion cost per unit?
Wrappers Tape makes two products: Simple and Removable. It estimates it will produce 369,991 units of Simple and 146,100 of Removable, and the overhead for each of its cost pools is as follows: It has also estimated the activities for each cost driver as follows: Â How much is the overhead allocated to each unit of Simple and Removable?
The following product costs are available for Kellee Company on the production of eyeglass frames: direct materials, $32,125; direct labor, $23.50; manufacturing overhead, applied at 225% of direct labor cost; selling expenses, $22,225; and administrative expenses, $31,125. The direct labor hours worked for the month are 3,200 hours. A. What are the prime costs? B. What are the conversion costs? C. What is the total product cost? D. What is the total period cost? E. If 6.425 equivalent units are produced, what is the equivalent material cost per unit? F. What is the equivalent conversion cost per unit?
Medical Tape makes two products: Generic and Label. It estimates it will produce 423,694 units of Generic and 652,200 of Label, and the overhead for each of its cost pools is as follows: It has also estimated the activities for each cost driver as follows: How much is the overhead allocated to each unit of Generic and Label?
Rex Industries has two products. They manufactured 12,539 units of product A and 8.254 units of product B. The data are: What is the activity rate for each cost pool?
Identify cost graphs The following cost graphs illustrate various types of cost behavior: For each of the following costs, identify the cost graph that best illustrates its cost behavior as the number of units produced increases: A. Total direct materials cost B. Electricity costs of 1,000 per month plus 0.10 per kilowatt-hour C. Per-unit cost of straight-line depreciation on factory equipment D. Salary of quality control supervisor, 20,000 per month E. Per-unit direct labor cost
Rocks Industries has two products. They manufactured 12,539 units of product A and 8.254 units of product B. The data are: Â What is the activity rate for each cost pool?
Patz Company produces two types of machine parts: Part A and Part B, with unit contribution margins of 300 and 600, respectively. Assume initially that Patz can sell all that is produced of either component. Part A requires two hours of assembly, and B requires five hours of assembly. The firm has 300 assembly hours per week. Required: 1. Express the objective of maximizing the total contribution margin subject to the assembly-hour constraint. 2. Identify the optimal amount that should be produced of each machine part and the total contribution margin associated with this mix. 3. What if market conditions are such that Patz can sell at most 75 units of Part A and 60 units of Part B? Express the objective function with its associated constraints for this case and identify the optimal mix and its associated total contribution margin.
Box Springs. Inc., makes two sizes of box springs: queen and king. The direct material for the queen is $35 per unit and $55 is used in direct labor, while the direct material for the king is $55 per unit, and the labor cost is $70 per unit. Box Springs estimates it will make 4,300 queens and 3,000 kings in the next year. It estimates the overhead for each cost pool and cost driver activities as follows: How much does each unit cost to manufacture?
! Required information [The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $240 and $162, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 131,000 units of each product. Its average cost per unit for each product at this level of activity is given below: Direct materials. Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha $ 35 Pounds of raw materials per unit 48 27 35 Alpha 32 35 $ 212 The company's traceable fixed manufacturing overhead is avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. Betal $ 15 23 11. How many pounds of raw material are needed to make one unit of each of the two products? 25 38 28 30 $ 159 Beta
Hesson, Incorporated, manufactures and sells two products: Product F3 and Product FO. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Product F3 Product FØ Total direct labor-hours Product F3 Product F0 Direct Materials Cost per Unit $ 261.40 $187.50 The direct labor rate is $16.30 per DLH. The direct materials cost per unit for each product is given below: Activity Cost Pools Labor-related Machine setups Order size Expected Hours Per Production Unit 300 6.0 200 5.0 Direct Labor- The company is considering adopting an activity-based costing system with the following activity cost pool Activity Measures DLHs setups MHS Total Direct Labor- Hours Estimated Overhead Cost 1,800 1,000 2,800 $ 110,964 33,005 486,720 $630,689 Expected Activity Product F3 Product FØ 1,800 1,000 300 200 3,100 2,900 tivity measures, and expected Total 2,800 500 6,000 The unit product cost of Product F3 under…

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