Vignette #1 The Deluxe Motorcar in northern California manufactures motor cars of all categories. Its budgeted sales for the most popular sedan model XE8 in 2018 is 4,000 units. Deluxe Motorcar has a beginning finished inventory of 600 units. Its ending inventory is 450 units. The present selling price of model XE8 to the distributors and dealers is $35,200. The company does not want to increase its selling price in 2018. Deluxe Motorcar does not produce tires. It buys the tires from an outside supplier. One complete car requires five tires including the tire for the extra wheel. The company's target ending inventory is 400 tires, and its beginning inventory is 350 tires. The budgeted purchase price is $45 per tire. 1. The budgeted revenues (in USD million dollars) is closest to

Vignette #1 The Deluxe Motorcar in northern California manufactures motor cars of all categories. Its budgeted sales for the most popular sedan model XE8 in 2018 is 4,000 units. Deluxe Motorcar has a beginning finished inventory of 600 units. Its ending inventory is 450 units. The present selling price of model XE8 to the distributors and dealers is $35,200. The company does not want to increase its selling price in 2018. Deluxe Motorcar does not produce tires. It buys the tires from an outside supplier. One complete car requires five tires including the tire for the extra wheel. The company's target ending inventory is 400 tires, and its beginning inventory is 350 tires. The budgeted purchase price is $45 per tire. 1. The budgeted revenues (in USD million dollars) is closest to

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints

Section: Chapter Questions

Problem 7E: Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The...

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The Yucatan Co. in Mexico has a division that manufactures bicycles. Its budgeted sales for Model XG in 2018 are 95,000 units. Yucatan’s target ending inventory is 7,000 units, and its beginning inventory is 11,000 units. The company’s budgeted selling price to its distributors and dealers is 3,500 pesos per bicycle. Yucatan buys all its wheels from an outside supplier. No defective wheels are accepted. Yucatan’s needs for extra wheels for replacement parts are ordered by a separate division of the company. The company’s target ending inventory is 14,000 wheels, and its beginning inventory is 16,000 wheels. The budgeted purchase price is 400 pesos per wheel. Q.Compute the budgeted revenues in pesos.
Full vs. Variable Costing Security Technology Inc. (STI) is a manufacturer of an electroniccontrol system used in the manufacture of certain special-duty auto transmissions used primarilyfor police and military applications. The part sells for $55 per unit and had sales of 24,000 units inthe current year, 2018. STI has no inventory on hand at the beginning of 2018 and is projecting salesof 26,000 units in 2019. STI is planning the same production level for 2019 as in 2018, 25,000 units.The variable manufacturing costs for STI are $16, and the variable selling costs are only $.50 per unit.The fixed manufacturing costs are $200,000 per year, and the fixed selling costs are $500 per year.Required1. Prepare an income statement for each year using full costing.2. Prepare an income statement for each year using variable costing.3. Prepare a reconciliation and explanation of the difference each year in the operating income resultingfrom the full and variable costing methods.
The Yucatan Co. in Mexico has a division that manufactures bicycles. Its budgeted sales for Model XG in 2018 are 95,000 units. Yucatan’s target ending inventory is 7,000 units, and its beginning inventory is 11,000 units. The company’s budgeted selling price to its distributors and dealers is 3,500 pesos per bicycle. Yucatan buys all its wheels from an outside supplier. No defective wheels are accepted. Yucatan’s needs for extra wheels for replacement parts are ordered by a separate division of the company. The company’s target ending inventory is 14,000 wheels, and its beginning inventory is 16,000 wheels. The budgeted purchase price is 400 pesos per wheel. Q.Compute the budgeted purchases of wheels in units and in pesos.
The Yucatan Co. in Mexico has a division that manufactures bicycles. Its budgeted sales for Model XG in 2018 are 95,000 units. Yucatan’s target ending inventory is 7,000 units, and its beginning inventory is 11,000 units. The company’s budgeted selling price to its distributors and dealers is 3,500 pesos per bicycle. Yucatan buys all its wheels from an outside supplier. No defective wheels are accepted. Yucatan’s needs for extra wheels for replacement parts are ordered by a separate division of the company. The company’s target ending inventory is 14,000 wheels, and its beginning inventory is 16,000 wheels. The budgeted purchase price is 400 pesos per wheel. Q. What actions can Yucatan’s managers take to reduce budgeted purchasing costs of wheels assuming the same budgeted sales for Model XG?
The Yucatan Co. in Mexico has a division that manufactures bicycles. Its budgeted sales for Model XG in 2018 are 95,000 units. Yucatan’s target ending inventory is 7,000 units, and its beginning inventory is 11,000 units. The company’s budgeted selling price to its distributors and dealers is 3,500 pesos per bicycle. Yucatan buys all its wheels from an outside supplier. No defective wheels are accepted. Yucatan’s needs for extra wheels for replacement parts are ordered by a separate division of the company. The company’s target ending inventory is 14,000 wheels, and its beginning inventory is 16,000 wheels. The budgeted purchase price is 400 pesos per wheel. Q.Compute the number of bicycles that Yucatan should produce
841 Smooth Move Company manufactures professional paperweights and has been approached by a new customer with an offer to purchase 15,000 units at a per-unit price of $7.00. The new customer is geographically separated from Smooth Move's other customers, and existing sales will not be affected. Smooth Move normally produces 86,000 units but plans to produce and sell only 65,000 in the coming year. The normal sales price is $12 per unit. Unit cost information is as follows: Direct materials $3.10 Direct labor 2.50 Variable overhead 1.15 Fixed overhead 1.80 Total $8.55 Suppose a customer wants to have its company logo affixed to each paperweight using a label. Smooth Move would have to purchase a special logo labeling machine that will cost $12,000. The machine will be able to label the 15,000 units and then it will be scrapped (with no further value). No other fixed overhead activities will be incurred. In addition, each special logo requires additional direct materials of…
Special Order Smooth Move Company manufactures professional paperweights and has been approached by a new customer with an offer to purchase 15,000 units at a per-unit price of $7.00. The new customer is geographically separated from Smooth Move's other customers, and existing sales will not be affected. Smooth Move normally produces 85,000 units but plans to produce and sell only 65,000 in the coming year. The normal sales price is $15 per unit. Unit cost information is as follows: Direct materials $3.10 Direct labor 2.25 Variable overhead 1.15 Fixed overhead 1.80 Total $8.30 Suppose a customer wants to have its company logo affixed to each paperweight using a label. Smooth Move would have to purchase a special logo labeling machine that will cost $12,000. The machine will be able to label the 15,000 units and then it will be scrapped (with no further value). No other fixed overhead activities will be incurred. In addition, each special logo requires additional direct…
4 Lowwater Sailmakers manufactures sails for sailboats. The company has the capacity to produce 25,000 sails per year, but is currently producing and selling 20,000 sails per year. The following information relates to current production. If a special sales order is accepted for 4,500 sails at a price of $120 per unit, and fixed costs remain unchanged, how would operating income be affected? (NOTE: Assume regular sales are not affected by the special order.) Sale price per unit $150 Variable costs per unit: Manufacturing Marketing and administratrve $60 $20 Total fixed costs: Manufacturing Marketing and administrative $600,000 S200,000 Increase by $160,000 ) Increase by $150,000 ) Increase by $140,000 Increase by S170,000 ) Increase by S180,000 ()
! Required information The following information applies to the questions displayed below] Shadee Corporation expects to sell 540 sun shades in May and 310 in June. Each shade sells for $156. Shadee's beginning and ending finished goods inventories for May are 65 and 55 shades, respectively. Ending finished goods inventory for June will be 50 shades. Each shade requires a total of $65.00 in direct materials that includes 4 adjustable poles that cost $5.00 each. Shadee expects to have 130 in direct materials inventory on May 1, 90 poles in inventory on May 31, and 100 poles in inventory on June 30. Required: Prepare Shadee's May and June purchases budget for the adjustable poles. Budgeted Cost of Poles Purchased May June
ACCEPT or REJECT (SPECIAL ORDER DECISION) XYZ Company produces and sells toy cars. Each toy car sells for P50 and the company sells approximately 500,000 toy cars each year. Unit cost data for 2022 are given below: Fixed Variable Direct Material - P15 Direct Labor - P12 Factory Overhead P8 P5 Overhead Costs P2 P3 XYZ has received an offer from a foreign customer to purchase 15,000 toy cars at P40. Domestic sales will not be affected by this transaction. If the offer is accepted, the company has idle capacity to accommodate the order but the unit variable distribution costs will increase by P2 for insurance andimport duties. REQUIREMENTS: 1. What is the relevant unit cost of the special order? 2. Should Brenda accept or reject the special order? SHOW SOLUTIONS ON EACH REQUIREMENT
8-41 Smooth Move Company manufactures professional paperweights and has been approached by a new customer with an offer to purchase 15,000 units at a per-unit price of $7.00. The new customer is geographically separated from Smooth Move's other customers, and existing sales will not be affected. Smooth Move normally produces 86,000 units but plans to produce and sell only 65,000 in the coming year. The normal sales price is $12 per unit. Unit cost information is as follows: Direct materials $3.10 Direct labor 2.50 Variable overhead 1.15 Fixed overhead 1.80 Total $8.55 Suppose a customer wants to have its company logo affixed to each paperweight using a label. Smooth Move would have to purchase a special logo labeling machine that will cost $12,000. The machine will be able to label the 15,000 units and then it will be scrapped (with no further value). No other fixed overhead activities will be incurred. In addition, each special logo requires additional direct materials…
Identifying relevant information and making pricing decisions Sea Blue manufactures flotation vests in Charleston, South Carolina. Sea Blue’s contribution margin income statement for the month ended December 31, 2018, contains the following data: Suppose Overboard wishes to buy 4,600 vests from Sea Blue. Sea Blue will not incur any variable Selling and administrative expenses on the special order. The Sea Blue plant has enough unused capacity to manufacture the additional vests. Overboard has offered $15 per vest, which is below the normal sales price of $19. Requirements Identify each cost in the income statement as either relevant or irrelevant to Sea Blue’s decision. Prepare a differential analysis to determine whether Sea Blue should accept this special sales order. Identify long-term factors Sea Blue should consider in deciding whether to accept the special sales order.