Question

In: Accounting

Woody, Inc. processes wooden logs into boards and sawdust. A wooden log costs $10 to buy...

Woody, Inc. processes wooden logs into boards and sawdust. A wooden log costs $10 to buy from log cutters and $6 to process to the split-off point. The boards can be sold at the split-off point for $12 or processed further for $10 to make a finished board that is sold for $18. The sawdust can be sold at the split-off point for $5 or processed further for $3 to make wood pellets (used in wood-burning heaters) that is sold for $10. What is the financial advantage (disadvantage) for the company from processing the sawdust into wood pellets rather than selling it as is?

Multiple Choice

  • $(2)

  • $2

  • $(14)

Solutions

Expert Solution

$2

Sold at Split off Processed further Advantage
Selling price $                         5 $                            10
Less - Cost for processing $                        -   $                            (3)
Net Income $                         5 $                               7 $                2

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

Woody, Inc. processes wooden logs into boards and sawdust. A wooden log costs $10 to buy...
Woody, Inc. processes wooden logs into boards and sawdust. A wooden log costs $10 to buy from log cutters and $6 to process to the splitoff point. The boards can be sold at the splitoff point for $12 or processed further for $10 to make a finished board that is sold for $18. The saw dust can be sold at the splitoff point for $5 or processed further for $3 to make wood pellets (used in wood-burning heaters) that is...
Fantastic Feeder Products Inc. manufactures high-quality wooden cutting boards sold to restaurants and gourmet home cooks....
Fantastic Feeder Products Inc. manufactures high-quality wooden cutting boards sold to restaurants and gourmet home cooks. One of these boards, the CertiPro II, requires an expensive hardwood. During a recent month, the company manufactured 1,200 CertiPro II cutting boards using 540 metres of hardwood. The hardwood cost the company $2,970. The company’s standards for one CertiPro II cutting board are 0.4 metres of hardwood, at a cost of $5.00 per metre. Required: 1-a. What cost for wood should have been...
Boards Inc. fabricates skateboards that the company sells for $ 37.50 each. Fixed costs for the...
Boards Inc. fabricates skateboards that the company sells for $ 37.50 each. Fixed costs for the last 12 months equaled $4,800. For the same period variable cost per unit equaled $22.50. Use the unit variable cost and sales price to calculate the unit contribution margin: 9120 Calculate the breakeven sales volume. BLANK-2 Calculate the sales volume necessary to produce a target Net Income of $3,000 per month. BLANK-3 The skateboards are manufactured in an old factory that relies heavily on...
Mackinaw Inc. processes a base chemical into plastic. Standard costs and actual costs for direct materials,...
Mackinaw Inc. processes a base chemical into plastic. Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the manufacture of 5,600 units of product were as follows: Standard Costs Actual Costs Direct materials 7,300 lb. at $5.40 7,200 lb. at $5.30 Direct labor 1,400 hrs. at $18.30 1,430 hrs. at $18.70 Factory overhead Rates per direct labor hr., based on 100% of normal capacity of 1,460 direct labor hrs.: Variable cost, $3.00 $4,160 variable...
Mackinaw Inc. processes a base chemical into plastic. Standard costs and actual costs for direct materials,...
Mackinaw Inc. processes a base chemical into plastic. Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the manufacture of 70,000 units of product were as follows: Standard Costs Actual Costs Direct materials 203,000 lbs. at $5.10 201,000 lbs. at $5.00 Direct labor 17,500 hrs. at $18.30 17,900 hrs. at $18.60 Factory overhead Rates per direct labor hr., based on 100% of normal capacity of 18,260 direct labor hrs.: Variable cost, $4.60 $79,700 variable...
Mackinaw Inc. processes a base chemical into plastic. Standard costs and actual costs for direct materials,...
Mackinaw Inc. processes a base chemical into plastic. Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the manufacture of 78,000 units of product were as follows: Standard Costs Actual Costs Direct materials 241,800 lbs. at $5.30 239,400 lbs. at $5.10 Direct labor 19,500 hrs. at $16.20 19,950 hrs. at $16.50 Factory overhead Rates per direct labor hr., based on 100% of normal capacity of 20,350 direct labor hrs.: Variable cost, $4.20 $81,080 variable...
Mackinaw Inc. processes a base chemical into plastic. Standard costs and actual costs for direct materials,...
Mackinaw Inc. processes a base chemical into plastic. Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the manufacture of 4,800 units of product were as follows: Standard Costs Actual Costs Direct materials 6,200 lb. at $5.40 6,100 lb. at $5.20 Direct labor 1,200 hrs. at $17.10 1,230 hrs. at $17.50 Factory overhead Rates per direct labor hr., based on 100% of normal capacity of 1,250 direct labor hrs.: Variable cost, $4.80 $5,700 variable...
Mackinaw Inc. processes a base chemical into plastic. Standard costs and actual costs for direct materials,...
Mackinaw Inc. processes a base chemical into plastic. Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the manufacture of 74,000 units of product were as follows: Standard Costs Actual Costs Direct materials 244,200 lbs. at $5.90 241,800 lbs. at $5.80 Direct labor 18,500 hrs. at $16.70 18,930 hrs. at $16.90 Factory overhead Rates per direct labor hr., based on 100% of normal capacity of 19,310 direct labor hrs.: Variable cost, $4.80 $87,910 variable...
Mackinaw Inc. processes a base chemical into plastic. Standard costs and actual costs for direct materials,...
Mackinaw Inc. processes a base chemical into plastic. Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the manufacture of 74,000 units of product were as follows: Standard Costs Actual Costs Direct materials 229,400 lbs. at $5.10 227,100 lbs. at $4.90 Direct labor 18,500 hrs. at $17.50 18,930 hrs. at $17.80 Factory overhead Rates per direct labor hr., based on 100% of normal capacity of 19,310 direct labor hrs.: Variable cost, $4.20 $76,920 variable...
Mackinaw Inc. processes a base chemical into plastic. Standard costs and actual costs for direct materials,...
Mackinaw Inc. processes a base chemical into plastic. Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the manufacture of 6,800 units of product were as follows: Standard Costs Actual Costs Direct materials 8,800 lb. at $6.00 8,700 lb. at $5.80 Direct labor 1,700 hrs. at $18.00 1,740 hrs. at $18.20 Factory overhead Rates per direct labor hr., based on 100% of normal capacity of 1,770 direct labor hrs.: Variable cost, $3.90 $6,560 variable...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT