Question
In: Accounting
You have been asked to look at production options for the Android01, since production methods and...
You have been asked to look at production options for the Android01, since production methods and allocation of costs have implications for cost per unit. Two alternative methods of production are being considered. Begin by gathering data (using financial information in decision making), then determine the suitability of the project.
The production of Android01 will share some production facilities and service divisions with Processor01. Fixed costs are $5 million per year, and will be assigned at the rate of 30 percent to Android01 and 70 percent to Processor01.
The variable cost of the production facilities and service divisions is $25 million per year. The square footage of factory space and labor needed for the production of 500 units of Processor01 and 300 units of Android01 are listed below.
| Square Feet | Labor | |
|---|---|---|
| Processor01 (500 units) | 70,000 | 120 |
| Android01 (300 units) | 30,000 | 80 |
The remaining cost for the production of Android01 is for components, at $25,000 per unit.
Question 1: In Method B, what would be the cost per unit of producing Android01 using factory space as the allocation basis? What would be the cost per unit using labor as the allocation basis?
Solutions
ekkarill92 answered 1 year agoRelated Solutions
You have been asked to look at production options for the Android01, since production methods and allocation of costs have implications for cost per unit.
You have been asked to look at production options for the Android01, since production methods and allocation of costs have implications for cost per unit. Two alternative methods of production are being considered. Begin by gathering data (using financial information in decision making), then determine the suitability of the project.
The production of Android01 will share some production facilities and service divisions with Processor01. Fixed costs are $5 million per year, and will be assigned at the rate of...
Since you are working on your MBA you have been asked to speak to the board...
Since you are working on your MBA you have been asked to speak
to the board of directors of your firm about various methods of
analyzing the companies financial statements. One of the board
members states she has heard about a technique called"common-size"
financial statements, but knows nothing about it. She would like
you to explain what they are, how they are prepared,how they differ
from regular financial statements, and how they can help the board
in its decision making....
You work for a very large engineering consulting firm. You have been asked to look at...
You work for a very large engineering consulting firm. You have
been asked to look at the viability of the company purchasing a
private jet to fly staff to project sites around the world. A new
Gulfstream G450 currently costs $40,000,000. Assume a 15-year
service life, a salvage value of $24,000,000, annual costs of
$2,500,000/year, and annual benefits of $3,500,000/year (time
saved, increased business), a corporate tax rate of 40%, a CCA rate
of 25%, and an after-tax MARR of...
You work for a very large engineering consulting firm. You have been asked to look at...
You work for a very large engineering consulting firm. You have
been asked to look at the viability of the company purchasing a
private jet to fly staff to project sites around the world. A new
Gulfstream G450 currently costs $40,000,000. Assume a 15-year
service life, a salvage value of $24,000,000, annual costs of
$2,500,000/year, and annual benefits of $3,500,000/year (time
saved, increased business), a corporate tax rate of 40%, a CCA rate
of 25%, and an after-tax MARR of...
You work for a very large engineering consulting firm. You have been asked to look at...
You work for a very large engineering consulting firm. You have
been asked to look at the viability of the company purchasing a
private jet to fly staff to project sites around the world. A new
Gulfstream G450 currently costs $40,000,000. Assume a 15-year
service life, a salvage value of $24,000,000, annual costs of
$2,500,000/year, and annual benefits of $3,500,000/year (time
saved, increased business), a corporate tax rate of 40%, a CCA rate
of 25%, and an after-tax MARR of...
As an Angel Investor you have been asked to assess an entrepreneur’s product and financing options....
As an Angel Investor you have been asked to assess an
entrepreneur’s product and financing options. In your role as an
Angel Investor you focus on one year at a time. The
entrepreneur asks for $100,000 immediately to purchase a diagnostic
machine for a healthcare facility. The entrepreneur hopes to be
financed with 60 percent debt and 40 percent equity. As the
entrepreneurs’ venture capital partner, you assign a cost of equity
of 15% and a cost of debt at...
You have been asked to analyze your hospitals medical records to look for reasons behind an...
You have been asked to analyze your hospitals medical records to
look for reasons behind an unexplained spike in deaths. summary of
how you would approach this problem.
Questions you might consider in your approach include:
- What specific patient data is available?
- What form is the data? Is it structured or unstructured? Is both
structured and unstructured data available?
- Are different techniques required to mine structured and
unstructured data? Do you need to use both?
- Overall,...
You are an analyst at a bank that has been asked to look into a project...
You are an analyst at a bank that has been asked to look into a
project that is being undertaken by ABC Corp with a life of 10
years. The project will return cash flows of $2 million every year
for 5 years and 4 million for the remaining 5 years after an
initial investment of $10 million. The firm has a beta of 0.5 and
the expected return of the market is 11%. There are currently 20000
shares outstanding...
For your analysis, you have been asked to compare methods based on a machine that cost...
For your analysis, you have been asked to compare methods based
on a machine that cost $176,000. The estimated useful life is 10
years, and the estimated residual value is $33,440. The machine has
an estimated useful life in productive output of 216,000 units.
Actual output was 28,000 in year 1 and 24,000 in year 2. Required:
1. For years 1 and 2 only, prepare separate depreciation schedules
assuming: (Do not round intermediate calculations and round your
final answers to...
In a factory concerned with the production of soft drinks you have been asked to analyse...
In a factory concerned with the production of soft drinks you
have been asked to analyse the production of two drinks, X and Y.
Each litre of X that is produced can (if required) be further
processed into Y. Producing one litre of X costs £0.12 and the
further processing to produce Y costs an additional £0.03.
Wholesalers have in the forthcoming month ordered 150,000 litres of
X and 175,000 litres of Y.
The production capacity allocated to X and...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Parramore Corp has $20 million of sales, $2 million of inventories, $4 million of receivables, and...
- what is the mechanism that allows the HIV virus to remain in the cell, to get...
- Mary takes a loan for 5 years to be repaid by level end of year payments...
- Bond value and time-Changing required returns Personal Finance Problem Lynn Parsons is considering investing in either...
- E6-4 Analyzing Changes in Price, Cost Structure, Degree of Operating Leverage [LO 6-4, 6-5] Cove’s Cakes...
- A twelve year 5,000 par valued floating rate bond with annual coupons has a price P...
- Bob borrows 540,000 at annual effective interest rate 3%. She repays this loan by paying off...
ADVERTISEMENT