2. Computing Average Cost [LO3] K-Too Everwear Corporation can manufacture mountain climbing shoes for $33.18 per pair in variable raw material costs and $24.36 per pair in variable labor expense. The shoes sell for $170 per pair. Last year, production was 145,000 pairs. Fixed costs were $1,750,000.

a. What were the total production costs?

b. What is the marginal cost per pair?

c. What is the average cost?

d. If the company is considering a one-time order for an extra 5,000 pairs, what is the minimum acceptable total revenue from the order? Explain.

On March 1, 2019, Annapolis Company has a beginning Work in Process inventory of zero. All materials are added into production at the beginning of its production. There is only one production WIP inventory. During the month 35,000 units were started. At the end of the month all started units were 55% complete with respect to conversion. Direct Materials placed into production had a total cost of $475,000 and the total conversion cost for the month was $368,000. Annapolis uses the weighted-average process costing method. Use this information to determine the cost per equivalent unit of conversion for the month of March. (Round answer to the nearest cent.)

On March 1, 2019, Annapolis Company has a beginning Work in Process inventory of zero. All materials are added into production at the beginning of its production. There is only one production WIP inventory. During the month 37,000 units were started. At the end of the month all started units were 75% complete with respect to conversion. Direct Materials placed into production had a total cost of $375,000 and the total conversion cost for the month was $423,000. Annapolis uses the weighted-average process costing method. Use this information to determine the cost per equivalent unit of direct material for the month of March. (Round answer to the nearest cent.)

Weighted Average Process Costing

Minot Processing Company manufactures one product on a continuous basis in two departments, Processing and Finishing. All materials are added at the beginning of work on the product in the Processing Department. During December 2009, the following events occurred in the Processing Department:

Additional information follows:

• Minot uses weighted average costing and applies manufacturing overhead to Work-in-Process at the rate of 100 percent of direct labor cost.
• Ending inventory in the Processing Department consists of 3,000 units that are one-third converted.
• Beginning inventory contained 2,000 units, one-half converted, with a cost of $34,500 ($24,500 for materials and $10,000 for conversion).

(a) Prepare a cost of production report for the Processing Department for December.

Do not use negative signs with any of your answers.

(b) Prepare an analysis of all changes in Work-in-Process.

Do not use negative signs with any of your answers.

As output increases, total revenue increases, but total costs also increase. Why does the profit-maximizing level of production occur at the point where marginal revenue equals marginal cost? Can this same principle be applied to minimize a loss

You need to develop a preliminary estimate for a 5” thick, Heavy Industrial, Reinforced Concrete Slab on Grade. What are the costs/SF for material, installation, and total for this slab on grade construction? What is the total cost if the slab on grade is 80,000 SF?

Martinez Company’s relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: Average Cost Per Unit Direct materials $ 5.70 Direct labor $ 3.20 Variable manufacturing overhead $ 1.60 Fixed manufacturing overhead $ 4.00 Fixed selling expense $ 2.70 Fixed administrative expense $ 2.10 Sales commissions $ 1.10 Variable administrative expense $ 0.55

5. If 8,000 units are produced and sold, what is the total amount of variable costs related to the units produced and sold? (Do not round intermediate calculations.)

6. If 12,500 units are produced and sold, what is the total amount of variable costs related to the units produced and sold? (Do not round intermediate calculations.)

9.If 8,000 units are produced, what is the total amount of fixed manufacturing cost incurred to support this level of production?

10. If 12,500 units are produced, what is the total amount of fixed manufacturing cost incurred to support this level of production?

14.If 12,000 units are produced, what are the total amounts of direct and indirect manufacturing costs incurred to support this level of production? (Do not round intermediate calculations.)

1. Langer Company produces plastic items, including plastic housings for humidifiers. Each housing requires about 17 ounces of plastic costing $0.16 per ounce. Langer molds the plastic into the proper shape. Langer has budgeted production of the housings for the next 4 months as follows:

   	Units
   July	3,500
   August	4,400
   September	4,900
   October	6,300

   Inventory policy requires that sufficient plastic be in ending monthly inventory to satisfy 30% of the following month's production needs. The inventory of plastic at the beginning of July equals exactly the amount needed to satisfy the inventory policy.

   Required:

   Prepare a direct materials purchases budget for July, August, and September, showing purchases in units and in dollars for each month and in total. If required, round the total purchase cost to nearest whole value.

   Langer Company
   Direct Materials Purchases Budget
   For July, August and September
   	July	August	September	Total
   Units to be produced
   Direct materials per unit (ounces)
   Production needs
   Desired ending inventory (ounces)
   Total needs
   Less: Beginning inventory
   Direct materials to be purchased (ounces)
   Cost per ounce	$0.16	$0.16	$0.16	$0.16
   Total purchase cost	$	$	$	$

Direct Materials Purchases Budget

Langer Company produces plastic items, including plastic housings for humidifiers. Each housing requires about 21 ounces of plastic costing $0.1 per ounce. Langer molds the plastic into the proper shape. Langer has budgeted production of the housings for the next 4 months as follows:

Inventory policy requires that sufficient plastic be in ending monthly inventory to satisfy 30% of the following month's production needs. The inventory of plastic at the beginning of July equals exactly the amount needed to satisfy the inventory policy.

Required:

Prepare a direct materials purchases budget for July, August, and September, showing purchases in units and in dollars for each month and in total. If required, round the total purchase cost to nearest whole value.

(Make-or-Buy) Swan Manufacturing needed to determine if it would be cheaper to make 20,000 units of a component, which is used in production of an equipment, in-house or to purchase them from an outside supplier for $4.00 each. Cost information on internal production includes the following (for 20,000 units per month):

Fixed overhead will continue whether this component is produced internally or purchased from a supplier. No additional costs of purchasing will be incurred beyond the purchase price.
Required:
1. What are the alternatives for Swan Manufacturing?
2. List the relevant cost(s) of internal production and of external purchase.
3. Which alternative is more cost effective and by how much?
4. Now assume that the fixed overhead includes $15,000 of cost that can be avoided if the component is purchased externally. Which alternative is more cost effective and by how much?