What is the amount of the total relevant cost of operating the new equipment? a) What is the amount of the total
Q: [The following information applies to the questions displayed below.] Listed here are the total…
A: Manufacturing Costs: The total cost incurred while production of goods is said to by manufacturing…
Q: Annual cost of manufactured goods (manufacturing cost). b) Cost of items sold total year
A: Cost of goods manufactured is the original cost of of manufacturing the goods. It includes all the…
Q: 15. When producing tables, a company incurs the following costs: $30 for screws, $6,500 for wood,…
A: Factory overheads are the cost incurred on the making of the goods but it does not include the…
Q: Mcfarlain Corporation is presently making part U98 that is used in one of its products. A total of…
A: Relevant Cost - It is cost for relevant to decision. A matter of cost is relevant if there is a…
Q: Sander company produces Wall Clocks and Alarm Clocks. The company operates at capacity. Data related…
A: Overheads Cost driver Cost per…
Q: McDaniel Company manufactures 100-pound bags of fertilizer that have the following unit standard…
A: Material price variance = Actual quantity ×(standard rate - Actual rate)
Q: Moss Ltd. has the following activities: creating bills of materials (BOM), studying manufacturing…
A: In the context of the question, we are required to compute the cost assigned to the training…
Q: The Enhanced Products Division of Forrest Industries makes ceramic pots that are used to hold large…
A: Replacement decisions are made to assess; whether or not, it would be profitable to replace the…
Q: Jackson Manufacturing and Trading Company Limited produces several kitchen products, one of which is…
A: SOLUTION- 1- IF PRODUCTIONS OVERHEADS ARE ABSORBED ON THE BASIS OF MACHINE HOURS- PRODUCTION…
Q: The Klamath Corp. produces two products, saws and drills. Three activities are used in their…
A: a. Activity rate = Budgeted costs / Activity Base Stamping = $200,000/10,000 = $20 per machine hour…
Q: Keller Company, a manufacturer of rivets, uses absorption costing Keller’s manufacturing costs were…
A: 1. Direct Material and Labor: These expense are directly related to manufacturing process. 2.…
Q: A local manufacturing company estimated the following expenses for the upcoming year: a.…
A: Workings: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the…
Q: Arctic Air Inc. manufactures cooling units for commercial buildings. The price and cost of goods…
A: Activity-based costing is the process of costing the products or services where the overheads are…
Q: Piels Corporation produces a part that is used in the manufacture of one of its products. The costs…
A: Given the following information: Production units: 10,000 units Cost associated with the production…
Q: Scaffolder Ltd. is a manufacturing company making construction items. The production process is…
A: Apportionment of Overheads :- It refers to allotment of different item costs with their item units…
Q: Cyber Lighting manufactures different models of LED ring lights. The company produced 7,000 units of…
A: Unit cost is computed by dividing the total costs incurred on the product divided by the units…
Q: Xie Company identified the following activities, costs, and activity drivers for 2017. The company…
A: Compute the activity rate:
Q: A company incurs $1220000 of overhead each year in three departments, Processing, Packaging, and…
A: Department Cost Divide by: Use of Cost Driver Cost per driver Processing $496000…
Q: Mcfarlain Corporation is presently making part U98 that is used in one of its products. A total of…
A: The Machine has no use if U98 is purchased from an outside market. Therefore, the cost of…
Q: Rundle Company makes and sells lawn mowers for which it currently makes the engines. It has an…
A: Special order decisions: Special order decisions include circumstances in which the board must…
Q: Swagelok Enterprises is a manufacturer of miniature fittings and valves. Over a 5-year period, the…
A: IRR is the rate of return which makes NPV is zero.
Q: total costs
A: Definition: Apportionment of Overheads: It refers to allotment of different item costs with their…
Q: Bambina corporation, manufacturer of beauty products has the following partially completed…
A: Variable cost per unit = Total variable costs / Units produced = 320,000/ 800,000 = 0.40 per unit
Q: Determine the amount of desired profit from the production and sale of flat panel displays. 2.…
A: “Hey, since there are multiple questions posted, we will answer first three questions. If you want…
Q: Rex Motors Ltd makes electric cars and has only two products, the Simplegreen and the Superiorgreen.…
A: Return on investment means how much the investment is giving in return in terms of percentage.…
Q: Meltzer Corporation is presently making part 013 that is used in one of its products. A total of…
A: Introduction: A transfer cost is an amount paid by one split of a corporation to another division of…
Q: Innovating Motors Company makes electric cars and has two products, the Hybrid and the iBrilliant.…
A: please like the answer your response matters 1. Return on Investments => Average Profits/…
Q: U-RIDE, Inc. currently produces the electric engines that are used in golf carts made and sold by…
A: Facility-level depreciation and Annual facility-level utilities would not be considered for…
Q: The Enhanced Products Division of Forrest Industries makes ceramic pots that are used to hold large…
A:
Q: Excellent Motor Company makes electric cars and has two products, the Simplegreen and the…
A: Residual Income: Residual income is the leftover amount of total income of an individual after the…
Q: Diamond Visual Entertainment Inc. recently began production of a new product, flat panel displays,…
A: Cost accounting is the branch of accounting that inspects the cost structure of a business. This…
Q: Diamond Visual Entertainment Inc. recently began production of a new product, flat panel displays,…
A: Manufacturing overhead: All the overhead that is incurred in making an item is called…
Q: A manufacturing company uses two identical large and four identical small machines. Each large…
A:
Q: Recher Corporation uses part Q89 in one of its products. The company's Accounting Department reports…
A: The Make or buy choice is the demonstration of settling on a vital decision between delivering a…
Q: High Tech Bhd manufactures a specialized equipment that is used in scientific research and practice.…
A: Introduction: Selling price of a product is set considering the cost incurred for production, and…
Q: Crystal Displays Inc. recently began production of a new product, flat panel displays, which…
A: a.
Q: Diamond Visual Entertainment Inc. recently began production of a new product, flat panel displays,…
A: "Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: The Enhanced Products Division of Forrest Industries makes ceramic pots that are used to hold large…
A: Unit level labor cost = $800,000 Opportunity cost of leasing the equipment = $32,000
Q: A local manufacturing company estimated the following expenses for the upcoming year: a. Insurance…
A: Manufacturing overhead is generally described as all indirect expenses incurred throughout the…
Q: Assuming that Innovating Motors defines investment as average assets during the period, what is the…
A: To produce the ihybrid, Innovating Motors employed assets of $10,500,000 at the beginning of 2017…
Q: Swagelok Enterprises is a manufacturer of miniature fittings and valves. Over a 5-year period, the…
A: Rate of return is calculated using IRR
Q: The Clear Reception Antenna Company incurred the following costs while manufacturing its High Gain…
A: Solution.. Schedule of Cost of goods manufactured Beginning work in process inventory (a)…
Q: Randall Company manufactures chocolate bars. The following were among Randall's manufacturing costs…
A: Direct material cost is cost of material that is used directly for manufacturing and indirect cost…
Q: Moss Ltd. has the following activities: creating bills of materials (BOM), studying manufacturing…
A:
Q: Excellent Motor Company makes electric cars and has two products, the Simplegreen and the…
A: Given information is: Excellent Motor Company makes electric cars and has two products, the…
Q: Fanning Company makes and sells lawn mowers for which it currently makes the engines. It has an…
A: The maximum price one can be willing to pay will only the relevant cost to manufacture engines on…
Q: Part U16 is used by McVean Corporation to make one of its products. A total of 13,000 units of this…
A: Relevant cost per unit of making the product = Direct materials + Direct labor + Variable…
The Enhanced Products Division of Forrest Industries makes ceramic pots that are used to hold large decorative plants. During 2013, the division produced 10,000 pots and incurred the following costs:
unit-level material costs (10,000@ $15) $15,000
unit-level labor costs (10,000@ $20) $200,000
Unit-level overhead costs (10,000 @16) $160,000
Depreciation expenses on equipment* $30,000
Other manufacturing overhead ** $36,000
*The equipment was purchased for $150,000 and has a current book value of $120,000, remaining useful life of four years, and a zero salvage value. If the company does not use the equipment, it can be leased for $8,000 per year.
**Includes supervisors' salaries and rent for manufacturing plant.
The division is considering replacing the equipment used to manufacture its ceramic pots. Replacement equipment can be purchased at a price of $200,000. The new equipment, which is expected to last 4 years and have a salvage value of $20,000, will reduce unit-level labor costs by 25 percent.
The division desires to maintain its production and sales at 10,000 ceramic pots per year:
b) What is the amount of the total relevant cost of operating the new equipment?
- a) What is the amount of the total relevant cost of operating the existing equipment? already answeared.
Step by step
Solved in 2 steps
- The Enhanced Products Division of Forrest Industries makes ceramic pots that are used to hold large decorative plants. During 2013, the division produced 10,000 pots and incurred the following costs: unit-level material costs (10,000@ $15) $15,000 unit-level labor costs (10,000@ $20) $200,000 Unit-level overhead costs (10,000 @16) $160,000 Depreciation expenses on equipment* $30,000 Other manufacturing overhead ** $36,000 *The equipment was purchased for $150,000 and has a current book value of $120,000, remaining useful life of four years, and a zero salvage value. If the company does not use the equipment, it can be leased for $8,000 per year.**Includes supervisors' salaries and rent for manufacturing plant.The division is considering replacing the equipment used to manufacture its ceramic pots. Replacement equipment can be purchased at a price of $200,000. The new equipment, which is expected to last 4 years and have a salvage value of…The Enhanced Products Division of Forrest Industries makes ceramic pots that are used to hold large decorative plants. During 2013, the division produced 10,000 pots and incurred the following costs: unit-level material costs (10,000@ $15) $15,000 unit-level labor costs (10,000@ $20) $200,000 Unit-level overhead costs (10,000 @16) $160,000 Depreciation expenses on equipment* $30,000 Other manufacturing overhead ** $36,000 *The equipment was purchased for $150,000 and has a current book value of $120,000, remaining useful life of four years, and a zero salvage value. If the company does not use the equipment, it can be leased for $8,000 per year.**Includes supervisors' salaries and rent for manufacturing plant.The division is considering replacing the equipment used to manufacture its ceramic pots. Replacement equipment can be purchased at a price of $200,000. The new equipment, which is expected to last 4 years and have a salvage value of…The Enhanced Products Division of Forrest Industries makes ceramic pots that are used to hold large decorative plants. During 2013, the division produced 10,000 pots and incurred the following costs: unit-level material costs (10,000@ $15) $15,000 unit-level labor costs (10,000@ $20) $200,000 Unit-level overhead costs (10,000 @16) $160,000 Depreciation expenses on equipment* $30,000 Other manufacturing overhead ** $36,000 *The equipment was purchased for $150,000 and has a current book value of $120,000, remaining useful life of four years, and a zero salvage value. If the company does not use the equipment, it can be leased for $8,000 per year.**Includes supervisors' salaries and rent for manufacturing plant.The division is considering replacing the equipment used to manufacture its ceramic pots. Replacement equipment can be purchased at a price of $200,000. The new equipment, which is expected to last 4 years and have a salvage value of…
- Excellent Motor Company makes electric cars and has two products, the Simplegreen and the Excellentgreen. To produce the Simplegreen, Excellent Motor employed assets of $10,500,000 at the beginning of 2017 and $14,450,000 of assets at the end of 2017. Other costs to manufacture the Simplegreen include the following: Direct materials $5,000 per unit Setup $1,500 per setup-hour Production $ 415 per machine-hour General administration and selling costs for Simplegreen total $7,820,000 in 2017. During the year, Excellent Motor produced 11,000 Simplegreen cars using 6,000 setup-hours and 139,000 machine-hours. It sold these cars for $12,000 each. Q. Calculate the residual income for Simplegreen if Excellent Motor has a required rate of return of 16% on investments.Excellent Motor Company makes electric cars and has two products, the Simplegreen and the Excellentgreen. To produce the Simplegreen, Excellent Motor employed assets of $10,500,000 at the beginning of 2017 and $14,450,000 of assets at the end of 2017. Other costs to manufacture the Simplegreen include the following: Direct materials $5,000 per unit Setup $1,500 per setup-hour Production $ 415 per machine-hour General administration and selling costs for Simplegreen total $7,820,000 in 2017. During the year, Excellent Motor produced 11,000 Simplegreen cars using 6,000 setup-hours and 139,000 machine-hours. It sold these cars for $12,000 each. Q. Assuming that Excellent Motor defines investment as average assets during the period, what is the return on investment for the Simplegreen division?Imovating Motors Company makes electric cars and has two products, the iHybrid and the iBrilliant. To produce the iHybrid, Imovating Motors employed assets of $10,500,000 at the beginning of 2017 and $14,450,000 of assets at the end of 2017. Other costs to mamufacture the Hybrid include the following Direct materials $5,000 per unit $1,500 per setup-hour $ 415 per machine-hour Setup Production General administration and selling costs for Sinmplegreen total $7,820,000 in 2017. During the year, Innovating Motors produced 11,000 Hybrid cars using 6,000 setup-hours and 139.000 machine-hours. It sold these cars for $12.000 each. Required: i Assuming that Innovating Motors defines investment as avenge assets durinz the period what is the retum on investment for the Hybrid division? Calculate the residual income for iHybrid if Innovating Motors has a required rate of retum of 16% on investments. Based on its values and strategic thrusts, Innovating Motors is committed to sustainable…
- Innovating Motors Company makes electric cars and has two products, the iHybrid and the iBrilliant. To produce the iHybrid, Innovating Motors employed assets of $10,500,000 at the beginning of 2017 and $14,450,000 of assets at the end of 2017. Other costs to manufacture the iHybrid include the following:Direct materials $5,000 per unitSetup $1,500 per setup-hour Production $ 415 per machine-hourGeneral administration and selling costs for iHybrid total $7,820,000 in 2017. During the year, Innovating Motors produced 11,000 iHybrid cars using 6,000 setup-hours and 139,000 machine-hours. It sold these cars for $12,000 each.Required:i. Assuming that Innovating Motors defines investment as average assets during the period,what is the return on investment for the iHybrid division? ii. Calculate the residual income for iHybrid if Innovating Motors has a required rate of return of 16% on investments. iii. Based on its values and strategic thrusts, Innovating Motors is committed to sustainable…Aerobill Inc. makes 7,500 units of a part each year. This part is used in one of the company's products. The company's Accounting Department reports the following costs of producing the part at the current production volume: Direct materials $10.25 per unit Direct labor $15.50 per unit Variable overhead $5.90 per unit Supervisor's salary $81,000 per year Depreciation of special $15,500 per year equipment Allocated general $2.10 per unit overhead An outside supplier has offered to make the part for Aerobill and sell it to Aerobill for $41.50 per unit. If this offer is accepted, then the supervisor's salary and all variable costs can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company and would be reallocated if the part were outsourced. If the part is outsourced, then the space used to produce the part could be used to make more of one of…Crystal Displays Inc. recently began production of a new product, flat panel displays, which required the investment of $1,500,000 in assets. The costs of producing and selling 5,000 units of flat panel displays are estimated as follows: Variable costs per unit: Fixed costs: Direct materials $120 Factory overhead $250,000 Direct labor 30 Selling and administrative expenses 150,000 Factory overhead 50 Selling and administrative expenses 35 Total variable cost per unit $235 Crystal Displays Inc. is currently considering establishing a selling price for flat panel displays. The president of Crystal Displays has decided to use the cost-plus approach to product pricing and has indicated that the displays must earn a 15% return on invested assets. (Appendix) Assuming that the variable cost method is used, determine the following: a. Variable cost amount per unit $ b. Markup percentage % c. Selling price per unit $
- Crystal Displays Inc. recently began production of a new product, flat panel displays, which required the investment of $1,500,000 in assets. The costs of producing and selling 5,000 units of flat panel displays are estimated as follows: Variable costs per unit: Fixed costs: Direct materials $120 Factory overhead $250,000 Direct labor 30 Selling and administrative expenses 150,000 Factory overhead 50 Selling and administrative expenses 35 Total variable cost per unit $235 Crystal Displays Inc. is currently considering establishing a selling price for flat panel displays. The president of Crystal Displays has decided to use the cost-plus approach to product pricing and has indicated that the displays must earn a 15% return on invested assets. 6. Assume that as of August 1, 3,000 units of flat panel displays have been produced and sold during the current year. Analysis of the domestic market indicates that 2,000 additional units are…Diamond Visual Entertainment Inc. recently began production of a new product, flat panel displays, which required the investment of $1,500,000 in assets. The costs of producing and selling 5,000 units of flat panel displays are estimated as follows: Variable Costs: Variable Cost Amount: Fixed Costs: Fixed Cost Amount: Direct materials $120 Factory overhead $240,000 Direct labor 35 Selling and admin expenses 150,000 Variable overhead 52 Total Fixed costs 390,000 Selling and admin expenses 38 Total variable costs 245 Diamond Visual Entertainment Inc. is currently considering establishing a selling price for flat panel displays. The president of Diamond Visual Entertainment has decided to use the cost-plus approach to product pricing and has indicated that the displays must earn a 17% return on invested assets. A. Comment on any additional considerations that could…A company estimates that it will incur $3300000 of overhead each year in three departments: Processing, Packaging, and Testing. The company performs 800 processing transactions, 200000 packaging transactions, and 2000 tests per year in producing 400000 drums of product Oil and 600000 drums of product Sludge. The following data are available: Activity Cost Pool Estimated Use of Driver Processing 800 Packaging Testing 200000 2000 $1796250. $1503750. $1230000. $1650000. Cost 300 $1350000 Production information for the two products is as follows: 120000 1600 1350000 Oil Sludge Activity Cost Pool Estimated Use of Driver Estimated Use of Driver Processing 500 Packaging Testing 600000 The amount of overhead assigned to Sludge using ABC is 80000 400