Question
In: Accounting
Peggy Company makes and sells a product that normally sells for $57. Because of a defective...
Peggy Company makes and sells a product that normally sells for $57. Because of a defective machine, 1,000 units were not produced correctly and remain in inventory. Each of the defective unit has the following costs assigned to it by the company's absorption costing system:
| Direct materials | $6.00 per unit |
| Direct labor | $2.00 per unit |
| Variable Overhead | $1.75 per unit |
| Fixed Overhead | $1.8 per unit |
The company has two options regarding the defective units: (1) be sold for $8 per unit, or (2) repaired and sold at the regular price.
Q:) What is the minimum cost of repair per unit in order for the company to choose option (1)?
A:) $ _______per unit?
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Peggy Company makes and sells a product that normally sells for $57. Because of a defective...
Peggy Company makes and sells a product that normally sells for
$57. Because of a defective machine, 1,000 units were not produced
correctly and remain in inventory. Each of the defective unit has
the following costs assigned to it by the company's absorption
costing system:
Direct materials
$6.00 per unit
Direct labor
$2.00 per unit
Variable Overhead
$2.25 per unit
Fixed Overhead
$1.8 per unit
The company has two options regarding the defective units: (1)
be sold for $8 per...
Piti Corp. makes and sells a product that normally sells for $19. Because of a defective...
Piti Corp. makes and sells a product that normally sells for
$19. Because of a defective machine, 1,000 units were not produced
correctly and remain in inventory. Each of the defective unit has
the following costs assigned to it by the company's absorption
costing system:
Direct materials
$5.00 per unit
Direct labor
$3.00 per unit
Variable Overhead
$2.5 per unit
Fixed Overhead
$0.25 per unit
The company has two options regarding the defective units: (1)
be sold for $8 per...
A company is interested in tracking defective capacitors. The process normally yields 5% defective product. A...
A company is interested in tracking defective capacitors. The
process normally yields 5% defective product. A sample of 400
capacitors is selected.
Explain why we would use the binomial distribution in this
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Murphy Manufacturing Corporation makes and sells one product, cleverly named “Product X”. Product X normally sells...
Murphy Manufacturing Corporation makes and sells one product,
cleverly named “Product X”. Product X normally sells for $100 per
unit and is only sold in whole units!
Production for April 2010 is expected to equal sales at a level
of 32,000 units, which represents Murphy’s normal capacity. The
company expects inventory levels to remain unchanged for the month.
(Production equals sales).
The following budget monthly estimates for manufacturing,
selling and administrative expenses are available for normal
capacity of 32,000 monthly...
Perez Company makes and sells products with variable costs of$57 each. Perez incurs annual fixed...
Perez Company makes and sells products with variable costs of $57 each. Perez incurs annual fixed costs of $30,000. The current sales price is $72.
The following requirements are interdependent. For example, the $6,000 desired profit introduced in Requirement c also applies to subsequent requirements. Likewise, the $67 sales price introduced in Requirement d applies to the subsequent requirements.
a. Determine the contribution margin per unit
b. Determine the break-even point in units and in dollars. Prepare an income statement...
A Shopping Mall sells trays of eggs of which some are returned because they are defective...
A Shopping Mall sells trays of eggs of which some are returned
because they are defective and it has been observed that 15% of the
trays are defectives. The defective and no defective trays where
observed on a random manner. If 8 trays are randomly collected,
Find :-
a) The probability that exactly 2 of them are defective
b) The probability that at least 3 are defective
c) The probability that at most 2 are defective
d) The probability that...
49. The Arkansas Company makes and sells a product called Product K. Each unit of Product...
49. The Arkansas Company makes and sells a product called
Product K. Each unit of Product K sells for $25 dollars and has a
unit variable cost of $19. The company has budgeted the following
data for November:
Sales of $1,162,200, all in cash.
A cash balance on November 1 of $49,100.
Cash disbursements (other than interest) during November of
$1,170,000.
A minimum cash balance on November 30 of $62,000.
If necessary, the company will borrow cash from a bank....
A company makes and sells a single product, the variable cost of the production is $3...
A company makes and sells a single product, the variable cost of
the production is $3 per unit
and variable cost of selling is $1 per unit, fixed cost totalled
$600, and the selling price per unit
was $6. The company budgeted to make and sell 3 000 units in the
next year.
Required
Prepare a break even chart showing the expected amount of the
output and sales required to
break even.
Ritchie Manufacturing Company makes a product that it sells for $130 per unit. The company incurs...
Ritchie Manufacturing Company makes a product that it sells for
$130 per unit. The company incurs variable manufacturing costs of
$66 per unit. Variable selling expenses are $12 per unit, annual
fixed manufacturing costs are $450,000, and fixed selling and
administrative costs are $226,000 per year.
Required
Determine the break-even point in units and dollars using each
of the following approaches:
Use the equation method.
Use the contribution margin per unit approach.
Prepare a contribution margin income statement for the...
Ritchie Manufacturing Company makes a product that it sells for $140 per unit. The company incurs...
Ritchie Manufacturing Company makes a product that it sells for
$140 per unit. The company incurs variable manufacturing costs of
$73 per unit. Variable selling expenses are $11 per unit, annual
fixed manufacturing costs are $468,000, and fixed selling and
administrative costs are $271,200 per year.
Required
Determine the break-even point in units and dollars using each
of the following approaches:
Use the equation method.
Use the contribution margin per unit approach.
Prepare a contribution margin income statement for the...
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