Kubin Company’s relevant range of production is 24,000 to 31,000 units. When it produces and sells 27,500 units, its average costs per unit are as follows:
| Amount per Unit | ||
| Direct materials | $ | 8.40 |
| Direct labor | $ | 5.40 |
| Variable manufacturing overhead | $ | 2.90 |
| Fixed manufacturing overhead | $ | 7.10 |
| Fixed selling expense | $ | 4.90 |
| Fixed administrative expense | $ | 3.90 |
| Sales commissions | $ | 2.40 |
| Variable administrative expense | $ | 1.90 |
Required:
1. If 24,000 units are produced and sold, what is the variable cost per unit produced and sold?
2. If 31,000 units are produced and sold, what is the variable cost per unit produced and sold?
3. If 24,000 units are produced and sold, what is the total amount of variable cost related to the units produced and sold?
4. If 31,000 units are produced and sold, what is the total amount of variable cost related to the units produced and sold?
5. If 24,000 units are produced, what is the average fixed manufacturing cost per unit produced?
6. If 31,000 units are produced, what is the average fixed manufacturing cost per unit produced?
7. If 24,000 units are produced, what is the total amount of fixed manufacturing overhead incurred to support this level of production?
8. If 31,000 units are produced, what is the total amount of fixed manufacturing overhead incurred to support this level of production?
(Round per unit values to 2 decimal places.)
In: Accounting
Consider the street in Idaho City, with 5000 families looking for a new tent. Each family’s maximum willingness to pay for a tent is $120. In addition to the price at the store, each family bears a cost of $20 per mile to transport the tent home. Suppose there is a single tent seller on this street, Camping Gears, CG, and CG is planning to open new branches in this camping town along this street. CG has a constant unit cost of $40 per tent, and the fixed cost of opening a new branch is $2000.
(a) If CG wants to set a price low enough to serve all 5000 families, what is the highest price it can set if CG will have 1 branch? 2 branches? 3 branches? What is the highest price it can set if CG will have n branches?
(b) Write CG’s profit function with n branches and find the optimal number of branches if CG wants to serve all families.
(c) What is the total transportation cost paid by all customers when CG has only one branch? 2 branches? 3 branches? What is the total transportation cost paid by all customers when CG has n branches?
(d) Write the cost minimization problem for the sum of the total transportation and set-up costs. Solve for the optimal number of branches that maximizes total surplus.
In: Economics
Question 1.
A perfectly competitive firm seeking to maximize its profits would want to maximize the difference between?
Select one:
a. either a or d.
b. its marginal revenue and its marginal cost.
c. its total revenue and its total cost.
d. its average revenue and its average cost.
e. its price and its marginal cost.
Question text 2.
A profit-maximizing monopolist sets?
Select one:
a. output where demand equals average total cost.
b. output where marginal cost equals average revenue.
c. output where marginal cost equals marginal revenue.
d. the product price where marginal cost equals marginal revenue.
e. price equal to the highest dollar amount that any customer is willing to pay.
Question 3
An individual perfectly competitive firm?
Select one:
a. may increase its price without losing sales.
b. sells a product that is differentiated from those of its competitors.
c. has no perceptible influence on the market price.
d. is a price maker.
Question 4.
Darlene runs a fruit-and-vegetable stand in a medium-sized community where many such stands operate. Her weekly total revenue equals $3,000. Her weekly total cost of running the stand equals $3,500, consisting of $2,500 of variable costs and $1,000 of fixed costs. An economist would likely advise Darlene to?
Select one:
a. keep the stand open for a while longer because she is covering all of her variable costs and some of her fixed costs.
b. keep the stand open because it is generating an economic profit.
c. keep the stand open for a while longer because she is covering all of her fixed costs and some of her variable costs.
d. shut down as quickly as possible in order to minimize her losses.
In: Economics
Fields Company has two manufacturing departments, forming and painting. The company uses the weighted-average method of process costing. At the beginning of the month, the forming department has 27,000 units in inventory, 70% complete as to materials and 30% complete as to conversion costs. The beginning inventory cost of $56,100 consisted of $40,000 of direct materials costs and $16,100 of conversion costs.
During the month, the forming department started 320,000 units. At the end of the month, the forming department had 35,000 units in ending inventory, 80% complete as to materials and 40% complete as to conversion. Units completed in the forming department are transferred to the painting department.
Cost information for the forming department follows.
| Beginning work in process inventory | $ | 56,100 |
| Direct materials added during the month | 1,660,000 | |
| Conversion added during the month | 929,300 | |
1. Calculate the equivalent units of production for the forming department.
2. Calculate the costs per equivalent unit of production for the forming department.
3. Using the weighted-average method, assign costs to the forming department’s output—specifically, its units transferred to painting and its ending work in process inventory.
Calculate the equivalent units of production for the forming department.
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Complete this question by entering your answers in the tabs below.
Using the weighted-average method, assign costs to the forming department’s output—specifically, its units transferred to painting and its ending work in process inventory.
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In: Accounting
Direct Materials and Direct Labor Variance Analysis
Shasta Fixture Company manufactures faucets in a small manufacturing facility. The faucets are made from brass. Manufacturing has 40 employees. Each employee presently provides 40 hours of labor per week. Information about a production week is as follows:
| Standard wage per hour | $14.40 |
| Standard labor time per unit | 20 min. |
| Standard number of lbs. of brass | 1.5 lbs. |
| Standard price per lb. of brass | $11.25 |
| Actual price per lb. of brass | $11.50 |
| Actual lbs. of brass used during the week | 12,515 lbs. |
| Number of units produced during the week | 8,100 |
| Actual wage per hour | $14.83 |
| Actual hours for the week (40 employees × 40 hours) | 1,600 |
Required:
a. Determine the standard cost per unit for direct materials and direct labor. Round the cost per unit to two decimal places.
| Direct materials standard cost per unit | $ |
| Direct labor standard cost per unit | $ |
| Total standard cost per unit | $ |
b. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Round your answers to the nearest whole dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
| Direct Materials Price Variance | $ | |
| Direct Materials Quantity Variance | $ | |
| Total Direct Materials Cost Variance | $ |
c. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Round your answers to the nearest whole dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
| Direct Labor Rate Variance | $ | |
| Direct Labor Time Variance | $ | |
| Total Direct Labor Cost Variance | $ |
In: Accounting
Direct Materials and Direct Labor Variance Analysis
Shasta Fixture Company manufactures faucets in a small manufacturing facility. The faucets are made from brass. Manufacturing has 50 employees. Each employee presently provides 32 hours of labor per week. Information about a production week is as follows:
| Standard wage per hour | $15.00 |
| Standard labor time per unit | 20 min. |
| Standard number of lbs. of brass | 2.1 lbs. |
| Standard price per lb. of brass | $12.00 |
| Actual price per lb. of brass | $12.25 |
| Actual lbs. of brass used during the week | 16,871 lbs. |
| Number of units produced during the week | 7,800 |
| Actual wage per hour | $15.45 |
| Actual hours for the week (50 employees × 32 hours) | 1,600 |
Required:
a. Determine the standard cost per unit for direct materials and direct labor. Round the cost per unit to two decimal places.
| Direct materials standard cost per unit | $ |
| Direct labor standard cost per unit | $ |
| Total standard cost per unit | $ |
b. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Round your answers to the nearest whole dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
| Direct Materials Price Variance | $ | Unfavorable |
| Direct Materials Quantity Variance | $ | Unfavorable |
| Total Direct Materials Cost Variance | $ | Unfavorable |
c. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Round your answers to the nearest whole dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
| Direct Labor Rate Variance | $ | Unfavorable |
| Direct Labor Time Variance | $ | Favorable |
| Total Direct Labor Cost Variance | $ | Favorable |
In: Accounting
Direct Materials and Direct Labor Variance Analysis
Abbeville Fixture Company manufactures units in a small manufacturing facility. The units are made from brass. Manufacturing has 40 employees. Each employee presently provides 35 hours of labor per week. Information about a production week is as follows:
| Standard wage per hour | $11.4 |
| Standard labor time per unit | 20 min. |
| Standard number of lbs. of brass | 1.8 lbs. |
| Standard price per lb. of brass | $12.5 |
| Actual price per lb. of brass | $12.75 |
| Actual lbs. of brass used during the week | 11,680 lbs. |
| Number of units produced during the week | 6,300 |
| Actual wage per hour | $11.74 |
| Actual hours for the week (40 employees × 35 hours) | 1,400 hrs. |
Required:
a. Determine the standard cost per unit for direct materials and direct labor. Round the cost per unit to two decimal places.
| Direct materials standard cost per unit | $ |
| Direct labor standard cost per unit | $ |
| Total standard cost per unit | $ |
b. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Round your answers to the nearest whole dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
| Direct Materials Price Variance | $ | |
| Direct Materials Quantity Variance | $ | |
| Total Direct Materials Cost Variance | $ |
c. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Round your answers to the nearest whole dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
| Direct Labor Rate Variance | $ | |
| Direct Labor Time Variance | $ | |
| Total Direct Labor Cost Variance | $ |
In: Accounting
Calculator
Direct Materials and Direct Labor Variance Analysis
Abbeville Fixture Company manufactures units in a small manufacturing facility. The units are made from brass. Manufacturing has 30 employees. Each employee presently provides 32 hours of labor per week. Information about a production week is as follows:
| Standard wage per hour | $16.2 |
| Standard labor time per unit | 20 min. |
| Standard number of lbs. of brass | 2.1 lbs. |
| Standard price per lb. of brass | $9.75 |
| Actual price per lb. of brass | $10 |
| Actual lbs. of brass used during the week | 19,467 lbs. |
| Number of units produced during the week | 9,000 |
| Actual wage per hour | $16.69 |
| Actual hours for the week (30 employees × 32 hours) | 960 hrs. |
Required:
a. Determine the standard cost per unit for direct materials and direct labor. Round the cost per unit to two decimal places.
| Direct materials standard cost per unit | $ |
| Direct labor standard cost per unit | $ |
| Total standard cost per unit | $ |
b. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Round your answers to the nearest whole dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
| Direct Materials Price Variance | $ | Unfavorable |
| Direct Materials Quantity Variance | $ | Unfavorable |
| Total Direct Materials Cost Variance | $ | Unfavorable |
c. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Round your answers to the nearest whole dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
| Direct Labor Rate Variance | $ | Unfavorable |
| Direct Labor Time Variance | $ | Favorable |
| Total Direct Labor Cost Variance | $ | Favorable |
In: Accounting
Direct Materials and Direct Labor Variance Analysis
Abbeville Fixture Company manufactures units in a small manufacturing facility. The units are made from brass. Manufacturing has 30 employees. Each employee presently provides 32 hours of labor per week. Information about a production week is as follows:
| Standard wage per hour | $16.2 |
| Standard labor time per unit | 20 min. |
| Standard number of lbs. of brass | 2.1 lbs. |
| Standard price per lb. of brass | $9.75 |
| Actual price per lb. of brass | $10 |
| Actual lbs. of brass used during the week | 19,467 lbs. |
| Number of units produced during the week | 9,000 |
| Actual wage per hour | $16.69 |
| Actual hours for the week (30 employees × 32 hours) | 960 hrs. |
Required:
a. Determine the standard cost per unit for direct materials and direct labor. Round the cost per unit to two decimal places.
| Direct materials standard cost per unit | $ |
| Direct labor standard cost per unit | $ |
| Total standard cost per unit | $ |
b. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Round your answers to the nearest whole dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
| Direct Materials Price Variance | $ | |
| Direct Materials Quantity Variance | $ | |
| Total Direct Materials Cost Variance | $ |
c. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Round your answers to the nearest whole dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
| Direct Labor Rate Variance | $ | |
| Direct Labor Time Variance | $ | |
| Total Direct Labor Cost Variance | $ |
In: Accounting
Direct Materials and Direct Labor Variance Analysis
Abbeville Fixture Company manufactures units in a small manufacturing facility. The units are made from brass. Manufacturing has 60 employees. Each employee presently provides 35 hours of labor per week. Information about a production week is as follows:
| Standard wage per hour | $14.4 |
| Standard labor time per unit | 15 min. |
| Standard number of lbs. of brass | 1.2 lbs. |
| Standard price per lb. of brass | $11.5 |
| Actual price per lb. of brass | $11.75 |
| Actual lbs. of brass used during the week | 11,124 lbs. |
| Number of units produced during the week | 9,000 |
| Actual wage per hour | $14.83 |
| Actual hours for the week (60 employees × 35 hours) | 2,100 hrs. |
Required:
a. Determine the standard cost per unit for direct materials and direct labor. Round the cost per unit to two decimal places.
| Direct materials standard cost per unit | $ |
| Direct labor standard cost per unit | $ |
| Total standard cost per unit | $ |
b. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Round your answers to the nearest whole dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
| Direct Materials Price Variance | $ | Unfavorable |
| Direct Materials Quantity Variance | $ | Unfavorable |
| Total Direct Materials Cost Variance | $ | Unfavorable |
c. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Round your answers to the nearest whole dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
| Direct Labor Rate Variance | $ | Unfavorable |
| Direct Labor Time Variance | $ | Favorable |
| Total Direct Labor Cost Variance | $ | Favorable |
In: Accounting