Question
In: Accounting
Underwood, Inc. manufactures two products. It currently has 3,700 hours of direct labor and 1,400 hours...
Underwood, Inc.
manufactures two products. It currently has 3,700 hours of direct
labor and 1,400 hours of machine time available per month. The
table below lists the contribution margin, labor and machine time
requirements, and demand for each product.
| Product A | Product B | |||||
| Unit contribution margin | $ | 33.00 | $ | 30.00 | ||
| Demand | 1,000 | units | 1,200 | units | ||
| Labor time | ¾ | hour | ½ | hour | ||
| Machine time | 1 | hour | ½ | hour | ||
How much of each product should Underwood manufacture per
month?
1,000 units of A and 1,200 units of B
1,000 units of A and 0 units of B
0 units of A and 1,200 units of B
700.0 units of A and 1,000 units of B
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Wubben, Inc. manufactures two products. It currently has 2,000 hours of direct labor and 1,000 hours...
Wubben, Inc. manufactures two products. It currently has 2,000
hours of direct labor and 1,000 hours of machine time available per
month. The table below lists the contribution margin, labor and
machine time requirements, and demand for each product.
Product A
Product B
Unit contribution margin
$15
$12
Demand
1,000 units
2,000 units
Labor time per unit
0.75 hours
0.50 hrs
Machine time per unit
1 hour
0.50 hrs
(T or F ) If Wubben maximized profit, then the firm...
Waymire Ltd. manufactures two products and currently allocates overhead based on direct labour hours. For the...
Waymire Ltd. manufactures two products and currently allocates
overhead based on direct labour hours. For the coming year, the
company is considering changing to an activity based costing system
by allocating overhead based on 3 activities. The estimated amount
of overhead traceable to the 3 activities for the coming year are
given below:
Activity
Cost driver
Cost
Product 1
Product 2
Purchase orders
# of orders
$840347
312
579
Maintenance
Machine hours
$456759
18555
19721
Inspection
# of inspections
$718649...
MAnufacturing overhead is applied on the basis of direct labor hours. The direct labor hours for...
MAnufacturing overhead is applied on the basis of direct labor
hours. The direct labor hours for the period are 500 and the
estimated manufacturing overhead is 2000. actual direct labor hours
were 160 and actual overhead was 1000.
Compute the manufacturing overhead applied during this
period.
Fogerty Company makes two products—titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours...
Fogerty Company makes two products—titanium Hubs and Sprockets.
Data regarding the two products follow:
Direct
Labor-Hours per Unit
Annual
Production
Hubs
0.80
15,000
units
Sprockets
0.40
45,000
units
Additional information about the company follows:
Hubs require $35 in direct materials per unit, and Sprockets
require $12.
The direct labor wage rate is $19 per hour.
Hubs require special equipment and are more complex to
manufacture than Sprockets.
The ABC system has the following activity cost pools:
Estimated
Activity
Activity Cost...
Fogerty Company makes two products—titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours...
Fogerty Company makes two products—titanium Hubs and Sprockets.
Data regarding the two products follow:
Direct
Labor-Hours per Unit
Annual
Production
Hubs
0.80
13,000
units
Sprockets
0.40
54,000
units
Additional information about the company follows:
Hubs require $30 in direct materials per unit, and Sprockets
require $13.
The direct labor wage rate is $19 per hour.
Hubs require special equipment and are more complex to
manufacture than Sprockets.
The ABC system has the following activity cost pools:
Estimated
Activity
Activity Cost...
Fogerty Company makes two products—titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours...
Fogerty Company makes two products—titanium Hubs and Sprockets.
Data regarding the two products follow:
Direct
Labor-Hours per Unit
Annual Production
Hubs
0.60
24,000 units
Sprockets
0.20
46,000 units
Additional information about the company follows:
a. Hubs require $28 in direct materials per unit, and Sprockets
require $15.
b. The direct labor wage rate is $18 per hour.
c. Hubs are more complex to manufacture than Sprockets and they
require special processing.
d. The company’s activity-based absorption costing system has
the...
Fogerty Company makes two products—titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours...
Fogerty Company makes two products—titanium Hubs and Sprockets.
Data regarding the two products follow:
Direct
Labor-Hours per Unit
Annual
Production
Hubs
0.90
10,000
units
Sprockets
0.50
49,000
units
Additional information about the company follows:
Hubs require $32 in direct materials per unit, and Sprockets
require $11.
The direct labor wage rate is $16 per hour.
Hubs require special equipment and are more complex to
manufacture than Sprockets.
The ABC system has the following activity cost pools:
Estimated
Activity
Activity Cost...
Fogerty Company makes two products—titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours...
Fogerty Company makes two products—titanium Hubs and Sprockets.
Data regarding the two products follow:
Direct
Labor-Hours per Unit
Annual
Production
Hubs
0.50
16,000
units
Sprockets
0.10
44,000
units
Additional information about the company follows:
Hubs require $33 in direct materials per unit, and Sprockets
require $15.
The direct labor wage rate is $16 per hour.
Hubs require special equipment and are more complex to
manufacture than Sprockets.
The ABC system has the following activity cost pools:
Estimated
Activity
Activity Cost...
Fogerty Company makes two products—titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours...
Fogerty Company makes two products—titanium Hubs and Sprockets.
Data regarding the two products follow:
Direct
Labor-Hours per Unit
Annual Production
Hubs
0.80
11,000 units
Sprockets
0.40
43,000 units
Additional information about the company follows:
a. Hubs require $25 in direct materials per unit, and Sprockets
require $10.
b. The direct labor wage rate is $13 per hour.
c. Hubs are more complex to manufacture than Sprockets and they
require special processing.
d. The company’s activity-based absorption costing system has
the...
Fogerty Company makes two products—titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours...
Fogerty Company makes
two products—titanium Hubs and Sprockets. Data regarding the two
products follow:
Direct
Labor-Hours per Unit
Annual
Production
Hubs
0.50
13,000
units
Sprockets
0.10
41,000
units
Additional information
about the company follows:
Hubs require $23 in
direct materials per unit, and Sprockets require $13.
The direct labor wage
rate is $19 per hour.
Hubs require special
equipment and are more complex to manufacture than Sprockets.
The ABC system has the
following activity cost pools:
Estimated
Activity
Activity Cost...
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