Textra Polymers produces parts for a variety of small machine manufacturers

Textra Polymers produces parts for a variety of small machine manufacturers. Most products go through two operations, molding and trimming, before they are ready for packaging. Expected costs and activities for the molding department and for the trimming department for 2011 follow.



Molding


Trimming


Direct labor hours




52,000


DLH





48,000


DLH



Machine hours




30,500


MH





3,600


MH



Overhead costs



$


730,000





$


590,000



Data for two special order parts to be manufactured by the company in 2011 follow:



Part A27C


Part X82B


Number of units



9,800


units




54,500


units



Machine hours










Molding



5,100


MH




1,020


MH



Trimming



2,600


MH




650


MH



Direct labor hours










Molding


5,500


DLH


2,150


DLH


Trimming


700


DLH


3,500


DLH

1.Exercise 17-6 Part 1

Required

1. Compute the plantwide overhead rate using direct labor hours as the base. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Plantwide overhead rate

rev: 03-04-11

2. Exercise 17-6 Part 2

2. Determine the overhead cost assigned to each product line using the plantwide rate computed in part 1.(Round your intermediate calculations to 2 decimal places. Omit the "$" sign in your response.)


Product


Overhead cost


Part A27C



Part X82B


3. Exercise 17-7 Departmental overhead rates L.O. P2

Textra Polymers produces parts for a variety of small machine manufacturers. Most products go through two operations, molding and trimming, before they are ready for packaging. Expected costs and activities for the molding department and for the trimming department for 2011 follow.



Molding


Trimming


Direct labor hours




52,000


DLH





48,000


DLH



Machine hours




30,500


MH





3,600


MH



Overhead costs



$


730,000





$


590,000



Data for two special order parts to be manufactured by the company in 2011 follow:



Part A27C


Part X82B


Number of units



9,800


units




54,500


units



Machine hours










Molding



5,100


MH




1,020


MH



Trimming



2,600


MH




650


MH



Direct labor hours










Molding



5,500


DLH




2,150


DLH



Trimming



700


DLH




3,500


DLH


Required

Compute a departmental overhead rate for the molding department based on machine hours and a department overhead rate for the trimming department based on direct labor hours. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)


Department


Overhead rate


Molding



Trimming


2. Determine the total overhead cost assigned to each product line using the departmental overhead rates from requirement 1. (Round your intermediate calculations to 2 decimal places and final answers to whole dollar amount. Omit the "$" sign in your response.)


Product


Molding


Trimming


Total overhead
cost


Part A27C





Part X82B




3. Determine the overhead cost per unit for each product line using the departmental rate.. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)


Product


Overhead cost


Part A27C



Part X82B


4. Exercise 17-9 Using the plantwide Overhead rate to assess prices L.O. A1, P1

Real Cool produces two different models of air conditioners. The company produces the mechanical systems in their components department. The mechanical systems are combined with the housing assembly in its finishing department. The activities, costs, and drivers associated with these two manufacturing processes and the production support process follow.


Process


Activity


Overhead Cost


Driver


Quantity


Components


Changeover



$


500,000



Number of batches


800



Machining




279,000



Machine hours


6,000



Setups




225,000



Number of setups


120





$


1,004,000





Finishing


Welding



$


180,300



Welding hours


3,000



Inspecting




210,000



Number of inspections


700



Rework




75,000



Rework orders


300













$


465,300





Support


Purchasing



$


135,000



Purchase orders


450



Providing space




32,000



Number of units


5,000



Providing utilities




65,000



Number of units


5,000













$


232,000












Additional production information concerning its two product lines follows.



Model 145


Model 212


Units produced



1,500




3,500



Welding hours



800




2,200



Batches



400




400



Number of inspections



400




300



Machine hours



1,800




4,200



Setups



60




60



Rework orders



160




140



Purchase orders



300




150


Required

Using a plantwide overhead rate based on machine hours, compute the overhead cost per unit for each product line. (Round your intermediate calculations and final answers to 2 decimal places. Omit the "$" sign in your response.)


Product


Overhead cost


Model 145



Model 212


2. Determine the total cost per unit for each products line if the direct labor and direct materials costs per unit are $250 for Model 145 and $180 for Model 212. (Round your intermediate and final answers to 2 decimal places. Omit the "$" sign in your response.)


Product


Total cost


Model 145



Model 212


3. Assume if the market price for Model 145 is $800 and the market price for Model 212 is $470, determine the profit or loss per unit for each model. (Input all amounts as positive values. Round your intermediate and final answers to 2 decimal places. Omit the "$" sign in your response.)

Model 145

Model 212

rev: 03-04-11

5. Exercise 17-13 Using ABC for strategic decisions L.O. P1, P3

Consider the following data for two products of Rowena Manufacturing.



Product A


Product B


Number of units produced


10,000 units


2,000 units


Direct labor cost(@$24 per DLH)


0.20 DLH per unit


0.25 DLH per unit


Direct materials cost


$ 2 per unit


$ 3 per unit


Activity


Overhead costs


Machine setup



$


121,000



Materials handling




48,000



Quality control




80,000










$


249,000







Required

1. Using direct labor hours as the basis for assigning overhead costs, determine the total production cost per unit for each product line. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)



Product A


Product B


Manufacturing cost per unit



2. Assume if the market price for Product A is $20 and the market price for Product B is $60, determine the profit or loss per unit for each product. (Round your answers to 2 decimal places. Omit the "$" sign in your response. Input all amounts as positive values.)

Product A

Product B

3. Consider the following additional information about these two product lines. If ABC is used for assigning overhead costs to products, what is the cost per unit for Product A and for Product B (Round your answers to 2 decimal places. Omit the "$" sign in your response.)



Product A


Product B


Number of setups required for production


10 setups


12 setups


Number of parts required


1 part / unit


3 parts / unit


Inspection hours required


40 hours


210 hours



Product A


Product B


Manufacturing cost per unit



4.1 Determine the profit or loss per unit for each product. (Round your answers to 2 decimal places. Input all amounts as positive values. Omit the "$" sign in your response.)

Product A

Product B

Problem 17-1A Evaluating product line costs and prices using ABC L.O. P3

[The following information applies to the questions displayed below.]

Healthy Day Company produces two beverages, PowerPunch and SlimLife. Data about these productsfollow.



PowerPunch


SlimLife


Production volume


12,500


bottles


180,000


bottles


Liquid materials


1,400


gallons


37,000


gallons


Dry materials


620


pounds


12,000


pounds


Bottles


12,500


bottles


180,000


bottles


Labels


3


labels per bottle


1


label per bottle


Machine setups


500


setups


300


setups


Machine hours


200


MH


3,750


MH

Additional data from its two production departments follow.


Department


Driver


Cost


Mixing department







Liquid materials


Gallons



$


2,304



Dry materials


Pounds




6,941



Utilities


Machine hours




1,422



Bottling department







Bottles


Units



$


77,000



Labeling


Labels per bottle




6,525



Machine setup


Setups




20,000


7. Problem 17-1A Part 2

2. What is the cost per bottle for PowerPunch and SlimLife (Do not round intermediate calculations and round your final answers to 2 decimal places. Omit the "$" sign in your response.)



PowerPunch


SlimLife


Average cost per bottle
Textra Polymers produces parts for a variety of small machine manufacturers. Most products go through two operations, molding and trimming, before they are ready for packaging. Expected costs and activities for the molding department and for the trimming department for 2011 follow.



Molding


Trimming


Direct labor hours




52,000


DLH





48,000


DLH



Machine hours




30,500


MH





3,600


MH



Overhead costs



$


730,000





$


590,000



Data for two special order parts to be manufactured by the company in 2011 follow:



Part A27C


Part X82B


Number of units



9,800


units




54,500


units



Machine hours










Molding



5,100


MH




1,020


MH



Trimming



2,600


MH




650


MH



Direct labor hours










Molding


5,500


DLH


2,150


DLH


Trimming


700


DLH


3,500


DLH

1.Exercise 17-6 Part 1

Required

1. Compute the plantwide overhead rate using direct labor hours as the base. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Plantwide overhead rate

rev: 03-04-11

2. Exercise 17-6 Part 2

2. Determine the overhead cost assigned to each product line using the plantwide rate computed in part 1.(Round your intermediate calculations to 2 decimal places. Omit the "$" sign in your response.)


Product


Overhead cost


Part A27C



Part X82B


3. Exercise 17-7 Departmental overhead rates L.O. P2

Textra Polymers produces parts for a variety of small machine manufacturers. Most products go through two operations, molding and trimming, before they are ready for packaging. Expected costs and activities for the molding department and for the trimming department for 2011 follow.



Molding


Trimming


Direct labor hours




52,000


DLH





48,000


DLH



Machine hours




30,500


MH





3,600


MH



Overhead costs



$


730,000





$


590,000



Data for two special order parts to be manufactured by the company in 2011 follow:



Part A27C


Part X82B


Number of units



9,800


units




54,500


units



Machine hours










Molding



5,100


MH




1,020


MH



Trimming



2,600


MH




650


MH



Direct labor hours










Molding



5,500


DLH




2,150


DLH



Trimming



700


DLH




3,500


DLH


Required

Compute a departmental overhead rate for the molding department based on machine hours and a department overhead rate for the trimming department based on direct labor hours. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)


Department


Overhead rate


Molding



Trimming


2. Determine the total overhead cost assigned to each product line using the departmental overhead rates from requirement 1. (Round your intermediate calculations to 2 decimal places and final answers to whole dollar amount. Omit the "$" sign in your response.)


Product


Molding


Trimming


Total overhead
cost


Part A27C





Part X82B




3. Determine the overhead cost per unit for each product line using the departmental rate.. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)


Product


Overhead cost


Part A27C



Part X82B


4. Exercise 17-9 Using the plantwide Overhead rate to assess prices L.O. A1, P1

Real Cool produces two different models of air conditioners. The company produces the mechanical systems in their components department. The mechanical systems are combined with the housing assembly in its finishing department. The activities, costs, and drivers associated with these two manufacturing processes and the production support process follow.


Process


Activity


Overhead Cost


Driver


Quantity


Components


Changeover



$


500,000



Number of batches


800



Machining




279,000



Machine hours


6,000



Setups




225,000



Number of setups


120





$


1,004,000





Finishing


Welding



$


180,300



Welding hours


3,000



Inspecting




210,000



Number of inspections


700



Rework




75,000



Rework orders


300













$


465,300





Support


Purchasing



$


135,000



Purchase orders


450



Providing space




32,000



Number of units


5,000



Providing utilities




65,000



Number of units


5,000













$


232,000












Additional production information concerning its two product lines follows.



Model 145


Model 212


Units produced



1,500




3,500



Welding hours



800




2,200



Batches



400




400



Number of inspections



400




300



Machine hours



1,800




4,200



Setups



60




60



Rework orders



160




140



Purchase orders



300




150


Required

Using a plantwide overhead rate based on machine hours, compute the overhead cost per unit for each product line. (Round your intermediate calculations and final answers to 2 decimal places. Omit the "$" sign in your response.)


Product


Overhead cost


Model 145



Model 212


2. Determine the total cost per unit for each products line if the direct labor and direct materials costs per unit are $250 for Model 145 and $180 for Model 212. (Round your intermediate and final answers to 2 decimal places. Omit the "$" sign in your response.)


Product


Total cost


Model 145



Model 212


3. Assume if the market price for Model 145 is $800 and the market price for Model 212 is $470, determine the profit or loss per unit for each model. (Input all amounts as positive values. Round your intermediate and final answers to 2 decimal places. Omit the "$" sign in your response.)

Model 145

Model 212

rev: 03-04-11

5. Exercise 17-13 Using ABC for strategic decisions L.O. P1, P3

Consider the following data for two products of Rowena Manufacturing.



Product A


Product B


Number of units produced


10,000 units


2,000 units


Direct labor cost(@$24 per DLH)


0.20 DLH per unit


0.25 DLH per unit


Direct materials cost


$ 2 per unit


$ 3 per unit


Activity


Overhead costs


Machine setup



$


121,000



Materials handling




48,000



Quality control




80,000










$


249,000







Required

1. Using direct labor hours as the basis for assigning overhead costs, determine the total production cost per unit for each product line. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)



Product A


Product B


Manufacturing cost per unit



2. Assume if the market price for Product A is $20 and the market price for Product B is $60, determine the profit or loss per unit for each product. (Round your answers to 2 decimal places. Omit the "$" sign in your response. Input all amounts as positive values.)

Product A

Product B

3. Consider the following additional information about these two product lines. If ABC is used for assigning overhead costs to products, what is the cost per unit for Product A and for Product B (Round your answers to 2 decimal places. Omit the "$" sign in your response.)



Product A


Product B


Number of setups required for production


10 setups


12 setups


Number of parts required


1 part / unit


3 parts / unit


Inspection hours required


40 hours


210 hours



Product A


Product B


Manufacturing cost per unit



4.1 Determine the profit or loss per unit for each product. (Round your answers to 2 decimal places. Input all amounts as positive values. Omit the "$" sign in your response.)

Product A

Product B

Problem 17-1A Evaluating product line costs and prices using ABC L.O. P3

[The following information applies to the questions displayed below.]

Healthy Day Company produces two beverages, PowerPunch and SlimLife. Data about these productsfollow.



PowerPunch


SlimLife


Production volume


12,500


bottles


180,000


bottles


Liquid materials


1,400


gallons


37,000


gallons


Dry materials


620


pounds


12,000


pounds


Bottles


12,500


bottles


180,000


bottles


Labels


3


labels per bottle


1


label per bottle


Machine setups


500


setups


300


setups


Machine hours


200


MH


3,750


MH

Additional data from its two production departments follow.


Department


Driver


Cost


Mixing department







Liquid materials


Gallons



$


2,304



Dry materials


Pounds




6,941



Utilities


Machine hours




1,422



Bottling department







Bottles


Units



$


77,000



Labeling


Labels per bottle




6,525



Machine setup


Setups




20,000


7. Problem 17-1A Part 2

2. What is the cost per bottle for PowerPunch and SlimLife (Do not round intermediate calculations and round your final answers to 2 decimal places. Omit the "$" sign in your response.)



PowerPunch


SlimLife


Average cost per bottle





9. Problem 17-1A Part 4

4. What is the minimum price that the company should set per bottle of SlimLife?

$0.53 per bottle

$0.86 per bottle

$0.36 per bottle

The price of SlimLife must cover the costs associated with the product, so the minimum price for this product is $0.53 / bottle.

Read More Textra Polymers produces parts for a variety of small machine manufacturers. Most products go through two operations, molding and trimming, before they are ready for packaging. Expected costs and activities for the molding department and for the trimming department for 2011 follow.



Molding


Trimming


Direct labor hours




52,000


DLH





48,000


DLH



Machine hours




30,500


MH





3,600


MH



Overhead costs



$


730,000





$


590,000



Data for two special order parts to be manufactured by the company in 2011 follow:



Part A27C


Part X82B


Number of units



9,800


units




54,500


units



Machine hours










Molding



5,100


MH




1,020


MH



Trimming



2,600


MH




650


MH



Direct labor hours










Molding


5,500


DLH


2,150


DLH


Trimming


700


DLH


3,500


DLH

1.Exercise 17-6 Part 1

Required

1. Compute the plantwide overhead rate using direct labor hours as the base. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Plantwide overhead rate

rev: 03-04-11

2. Exercise 17-6 Part 2

2. Determine the overhead cost assigned to each product line using the plantwide rate computed in part 1.(Round your intermediate calculations to 2 decimal places. Omit the "$" sign in your response.)


Product


Overhead cost


Part A27C



Part X82B


3. Exercise 17-7 Departmental overhead rates L.O. P2

Textra Polymers produces parts for a variety of small machine manufacturers. Most products go through two operations, molding and trimming, before they are ready for packaging. Expected costs and activities for the molding department and for the trimming department for 2011 follow.



Molding


Trimming


Direct labor hours




52,000


DLH





48,000


DLH



Machine hours




30,500


MH





3,600


MH



Overhead costs



$


730,000





$


590,000



Data for two special order parts to be manufactured by the company in 2011 follow:



Part A27C


Part X82B


Number of units



9,800


units




54,500


units



Machine hours










Molding



5,100


MH




1,020


MH



Trimming



2,600


MH




650


MH



Direct labor hours










Molding



5,500


DLH




2,150


DLH



Trimming



700


DLH




3,500


DLH


Required

Compute a departmental overhead rate for the molding department based on machine hours and a department overhead rate for the trimming department based on direct labor hours. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)


Department


Overhead rate


Molding



Trimming


2. Determine the total overhead cost assigned to each product line using the departmental overhead rates from requirement 1. (Round your intermediate calculations to 2 decimal places and final answers to whole dollar amount. Omit the "$" sign in your response.)


Product


Molding


Trimming


Total overhead
cost


Part A27C





Part X82B




3. Determine the overhead cost per unit for each product line using the departmental rate.. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)


Product


Overhead cost


Part A27C



Part X82B


4. Exercise 17-9 Using the plantwide Overhead rate to assess prices L.O. A1, P1

Real Cool produces two different models of air conditioners. The company produces the mechanical systems in their components department. The mechanical systems are combined with the housing assembly in its finishing department. The activities, costs, and drivers associated with these two manufacturing processes and the production support process follow.


Process


Activity


Overhead Cost


Driver


Quantity


Components


Changeover



$


500,000



Number of batches


800



Machining




279,000



Machine hours


6,000



Setups




225,000



Number of setups


120





$


1,004,000





Finishing


Welding



$


180,300



Welding hours


3,000



Inspecting




210,000



Number of inspections


700



Rework




75,000



Rework orders


300













$


465,300





Support


Purchasing



$


135,000



Purchase orders


450



Providing space




32,000



Number of units


5,000



Providing utilities




65,000



Number of units


5,000













$


232,000












Additional production information concerning its two product lines follows.



Model 145


Model 212


Units produced



1,500




3,500



Welding hours



800




2,200



Batches



400




400



Number of inspections



400




300



Machine hours



1,800




4,200



Setups



60




60



Rework orders



160




140



Purchase orders



300




150


Required

Using a plantwide overhead rate based on machine hours, compute the overhead cost per unit for each product line. (Round your intermediate calculations and final answers to 2 decimal places. Omit the "$" sign in your response.)


Product


Overhead cost


Model 145



Model 212


2. Determine the total cost per unit for each products line if the direct labor and direct materials costs per unit are $250 for Model 145 and $180 for Model 212. (Round your intermediate and final answers to 2 decimal places. Omit the "$" sign in your response.)


Product


Total cost


Model 145



Model 212


3. Assume if the market price for Model 145 is $800 and the market price for Model 212 is $470, determine the profit or loss per unit for each model. (Input all amounts as positive values. Round your intermediate and final answers to 2 decimal places. Omit the "$" sign in your response.)

Model 145

Model 212

rev: 03-04-11

5. Exercise 17-13 Using ABC for strategic decisions L.O. P1, P3

Consider the following data for two products of Rowena Manufacturing.



Product A


Product B


Number of units produced


10,000 units


2,000 units


Direct labor cost(@$24 per DLH)


0.20 DLH per unit


0.25 DLH per unit


Direct materials cost


$ 2 per unit


$ 3 per unit


Activity


Overhead costs


Machine setup



$


121,000



Materials handling




48,000



Quality control




80,000










$


249,000







Required

1. Using direct labor hours as the basis for assigning overhead costs, determine the total production cost per unit for each product line. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)



Product A


Product B


Manufacturing cost per unit



2. Assume if the market price for Product A is $20 and the market price for Product B is $60, determine the profit or loss per unit for each product. (Round your answers to 2 decimal places. Omit the "$" sign in your response. Input all amounts as positive values.)

Product A

Product B

3. Consider the following additional information about these two product lines. If ABC is used for assigning overhead costs to products, what is the cost per unit for Product A and for Product B (Round your answers to 2 decimal places. Omit the "$" sign in your response.)



Product A


Product B


Number of setups required for production


10 setups


12 setups


Number of parts required


1 part / unit


3 parts / unit


Inspection hours required


40 hours


210 hours



Product A


Product B


Manufacturing cost per unit



4.1 Determine the profit or loss per unit for each product. (Round your answers to 2 decimal places. Input all amounts as positive values. Omit the "$" sign in your response.)

Product A

Product B

Problem 17-1A Evaluating product line costs and prices using ABC L.O. P3

[The following information applies to the questions displayed below.]

Healthy Day Company produces two beverages, PowerPunch and SlimLife. Data about these productsfollow.



PowerPunch


SlimLife


Production volume


12,500


bottles


180,000


bottles


Liquid materials


1,400


gallons


37,000


gallons


Dry materials


620


pounds


12,000


pounds


Bottles


12,500


bottles


180,000


bottles


Labels


3


labels per bottle


1


label per bottle


Machine setups


500


setups


300


setups


Machine hours


200


MH


3,750


MH

Additional data from its two production departments follow.


Department


Driver


Cost


Mixing department







Liquid materials


Gallons



$


2,304



Dry materials


Pounds




6,941



Utilities


Machine hours




1,422



Bottling department







Bottles


Units



$


77,000



Labeling


Labels per bottle




6,525



Machine setup


Setups




20,000


7. Problem 17-1A Part 2

2. What is the cost per bottle for PowerPunch and SlimLife (Do not round intermediate calculations and round your final answers to 2 decimal places. Omit the "$" sign in your response.)



PowerPunch


SlimLife


Average cost per bottle





9. Problem 17-1A Part 4

4. What is the minimum price that the company should set per bottle of SlimLife?

$0.53 per bottle
Textra Polymers produces parts for a variety of small machine manufacturers. Most products go through two operations, molding and trimming, before they are ready for packaging. Expected costs and activities for the molding department and for the trimming department for 2011 follow.



Molding


Trimming


Direct labor hours




52,000


DLH





48,000


DLH



Machine hours




30,500


MH





3,600


MH



Overhead costs



$


730,000





$


590,000



Data for two special order parts to be manufactured by the company in 2011 follow:



Part A27C


Part X82B


Number of units



9,800


units




54,500


units



Machine hours










Molding



5,100


MH




1,020


MH



Trimming



2,600


MH




650


MH



Direct labor hours










Molding


5,500


DLH


2,150


DLH


Trimming


700


DLH


3,500


DLH

1.Exercise 17-6 Part 1

Required

1. Compute the plantwide overhead rate using direct labor hours as the base. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Plantwide overhead rate

rev: 03-04-11

2. Exercise 17-6 Part 2

2. Determine the overhead cost assigned to each product line using the plantwide rate computed in part 1.(Round your intermediate calculations to 2 decimal places. Omit the "$" sign in your response.)


Product


Overhead cost


Part A27C



Part X82B


3. Exercise 17-7 Departmental overhead rates L.O. P2

Textra Polymers produces parts for a variety of small machine manufacturers. Most products go through two operations, molding and trimming, before they are ready for packaging. Expected costs and activities for the molding department and for the trimming department for 2011 follow.



Molding


Trimming


Direct labor hours




52,000


DLH





48,000


DLH



Machine hours




30,500


MH





3,600


MH



Overhead costs



$


730,000





$


590,000



Data for two special order parts to be manufactured by the company in 2011 follow:



Part A27C


Part X82B


Number of units



9,800


units




54,500


units



Machine hours










Molding



5,100


MH




1,020


MH



Trimming



2,600


MH




650


MH



Direct labor hours










Molding



5,500


DLH




2,150


DLH



Trimming



700


DLH




3,500


DLH


Required

Compute a departmental overhead rate for the molding department based on machine hours and a department overhead rate for the trimming department based on direct labor hours. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)


Department


Overhead rate


Molding



Trimming


2. Determine the total overhead cost assigned to each product line using the departmental overhead rates from requirement 1. (Round your intermediate calculations to 2 decimal places and final answers to whole dollar amount. Omit the "$" sign in your response.)


Product


Molding


Trimming


Total overhead
cost


Part A27C





Part X82B




3. Determine the overhead cost per unit for each product line using the departmental rate.. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)


Product


Overhead cost


Part A27C



Part X82B


4. Exercise 17-9 Using the plantwide Overhead rate to assess prices L.O. A1, P1

Real Cool produces two different models of air conditioners. The company produces the mechanical systems in their components department. The mechanical systems are combined with the housing assembly in its finishing department. The activities, costs, and drivers associated with these two manufacturing processes and the production support process follow.


Process


Activity


Overhead Cost


Driver


Quantity


Components


Changeover



$


500,000



Number of batches


800



Machining




279,000



Machine hours


6,000



Setups




225,000



Number of setups


120





$


1,004,000





Finishing


Welding



$


180,300



Welding hours


3,000



Inspecting




210,000



Number of inspections


700



Rework




75,000



Rework orders


300













$


465,300





Support


Purchasing



$


135,000



Purchase orders


450



Providing space




32,000



Number of units


5,000



Providing utilities




65,000



Number of units


5,000













$


232,000












Additional production information concerning its two product lines follows.



Model 145


Model 212


Units produced



1,500




3,500



Welding hours



800




2,200



Batches



400




400



Number of inspections



400




300



Machine hours



1,800




4,200



Setups



60




60



Rework orders



160




140



Purchase orders



300




150


Required

Using a plantwide overhead rate based on machine hours, compute the overhead cost per unit for each product line. (Round your intermediate calculations and final answers to 2 decimal places. Omit the "$" sign in your response.)


Product


Overhead cost


Model 145



Model 212


2. Determine the total cost per unit for each products line if the direct labor and direct materials costs per unit are $250 for Model 145 and $180 for Model 212. (Round your intermediate and final answers to 2 decimal places. Omit the "$" sign in your response.)


Product


Total cost


Model 145



Model 212


3. Assume if the market price for Model 145 is $800 and the market price for Model 212 is $470, determine the profit or loss per unit for each model. (Input all amounts as positive values. Round your intermediate and final answers to 2 decimal places. Omit the "$" sign in your response.)

Model 145

Model 212

rev: 03-04-11

5. Exercise 17-13 Using ABC for strategic decisions L.O. P1, P3

Consider the following data for two products of Rowena Manufacturing.



Product A


Product B


Number of units produced


10,000 units


2,000 units


Direct labor cost(@$24 per DLH)


0.20 DLH per unit


0.25 DLH per unit


Direct materials cost


$ 2 per unit


$ 3 per unit


Activity


Overhead costs


Machine setup



$


121,000



Materials handling




48,000



Quality control




80,000










$


249,000







Required

1. Using direct labor hours as the basis for assigning overhead costs, determine the total production cost per unit for each product line. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)



Product A


Product B


Manufacturing cost per unit



2. Assume if the market price for Product A is $20 and the market price for Product B is $60, determine the profit or loss per unit for each product. (Round your answers to 2 decimal places. Omit the "$" sign in your response. Input all amounts as positive values.)

Product A

Product B

3. Consider the following additional information about these two product lines. If ABC is used for assigning overhead costs to products, what is the cost per unit for Product A and for Product B (Round your answers to 2 decimal places. Omit the "$" sign in your response.)



Product A


Product B


Number of setups required for production


10 setups


12 setups


Number of parts required


1 part / unit


3 parts / unit


Inspection hours required


40 hours


210 hours



Product A


Product B


Manufacturing cost per unit



4.1 Determine the profit or loss per unit for each product. (Round your answers to 2 decimal places. Input all amounts as positive values. Omit the "$" sign in your response.)

Product A

Product B

Problem 17-1A Evaluating product line costs and prices using ABC L.O. P3

[The following information applies to the questions displayed below.]

Healthy Day Company produces two beverages, PowerPunch and SlimLife. Data about these productsfollow.



PowerPunch


SlimLife


Production volume


12,500


bottles


180,000


bottles


Liquid materials


1,400


gallons


37,000


gallons


Dry materials


620


pounds


12,000


pounds


Bottles


12,500


bottles


180,000


bottles


Labels


3


labels per bottle


1


label per bottle


Machine setups


500


setups


300


setups


Machine hours


200


MH


3,750


MH

Additional data from its two production departments follow.


Department


Driver


Cost


Mixing department







Liquid materials


Gallons



$


2,304



Dry materials


Pounds




6,941



Utilities


Machine hours




1,422



Bottling department







Bottles


Units



$


77,000



Labeling


Labels per bottle




6,525



Machine setup


Setups




20,000


7. Problem 17-1A Part 2

2. What is the cost per bottle for PowerPunch and SlimLife (Do not round intermediate calculations and round your final answers to 2 decimal places. Omit the "$" sign in your response.)



PowerPunch


SlimLife


Average cost per bottle





9. Problem 17-1A Part 4

4. What is the minimum price that the company should set per bottle of SlimLife?

$0.53 per bottle

$0.86 per bottle

$0.36 per bottle

The price of SlimLife must cover the costs associated with the product, so the minimum price for this product is $0.53 / bottle.

$0.86 per bottle

$0.36 per bottle

The price of SlimLife must cover the costs associated with the product, so the minimum price for this product is $0.53 / bottle.





9. Problem 17-1A Part 4

4. What is the minimum price that the company should set per bottle of SlimLife?

$0.53 per bottle

$0.86 per bottle

$0.36 per bottle

The price of SlimLife must cover the costs associated with the product, so the minimum price for this product is $0.53 / bottle.