Highland Company produces a lightweight backpack that is popular with college students. Standard variable costs relating to a single backpack are given below:

Standard cost of a single backpack                            _________

Deduct difference between standard and actual cost _________

Actual cost per backpack                                            _________

Materials price variance      __________    ___________

Materials quantity variance __________     __________

Spending bariance               _________      __________

A small business firm. produces raincoats and overeoats for commercial sale and for the Government. Most items are manufactured for specific customer orders. At the beginning of the year. the comptroller estimated costs and production hours for operations throughout the year. Note that Department A is more labor intensive and Department B is more automated:

During the year, Job #l23, a firm fixed—price Government contract for production of 3.000 raincoats, will be started and completed. Estimate contract cost using the rates determined in Question 1 and the following information. Use the Job Cost Summary table for your calculations. Note Department A‘s overhead rate was calculated by using direct labor hours as the base and Department B utilized machine hours.

I Materials cost totaled $3,200 for Department A and $3740 for Department B.

I Direct labor hours totaled 240 for Department A and 80 for Department B.

I Machine hours totaled 120 for Department A and 300 for Depamnent B

Find total cost for Department A and B, show all work

2) At the end of the year, the Comptroller accumulated the total actual costs and hours incurred by Department A and Department B during the year for the company. Using the information provided below, calculate the final overhead rates for both departments.

Department A _ direct labor hour?

Department B _ machine per hour ?

3 Why are the rates that you developed in Question 2 different than the rates developed in Question 1?

4. Given the actual costs stated above in 2, what would be the final cost of Job #123 using the overhead rates determined in Question 1'

Suppose you have been given responsibility for developing the six-month aggregate production plan at Soda Galore, a manufacturer of soft drinks. Your company makes three types of soft drinks: regular, diet, and super-caffeinated. Fortunately, all three types are made using the same production process, and the costs related to switching between the three types are so minimal that they can be ignored. Thus, you can treat your problem as an aggregate planning exercise where the planning unit is cases of soft drinks, regardless of what types of drinks they are.

Assume that employees negotiate an increase in the regular production wage rate to $40 per hour and $60 per hour for overtime. Also assume that Soda Galore always plans to hold at least 7,000 cases of safety stock to meet unanticipated customer demand. Assume that hiring and layoff/firing, if necessary, occur at the beginning of the month.

a) Determine the cost of the level production plan.

b)Determine the cost of the chase production plan.

c)After much internal discussion, the company decides to maintain a permanent workforce of 10 production workers. Given the same planning information and this new requirement, develop a six-month production plan based on hybrid production. Determine the cost of the hybrid production plan. Use the overtime cost.

A perfectly competitive firm's marginal cost curve above the average variable cost curve is its:

Select one:

a. total revenue curve.

b. short-run supply curve.

c. input demand curve.

d. marginal revenue curve.

A competitive for maximizes profit and an output level of 500 units market price is $24 average total cost is $24 50 cents at what range of average variable cost values for an output level of 500 would the firm choose not to shut down

I want to talk about the relevant range is the range :Relevant range::Cost behaviorrelevant range:of the volume of activity where total fixed costs remain constant and the variable cost per unit remains constant. Can someone provide an example?

1.Calculate the mean cost of water.

2.Calculate the variance.

3.Calculate the mode

As you know, we have been renting Building X for several years to the Smith Company for $30,000 per year. Their lease expires at the end of the year. Instead of renewing the lease, I have been thinking that we should use that part of our plant to manufacture a new product. The direct materials cost for the new product will total $80 per unit. To have a place to store finished units of the product, we will rent a small warehouse nearby. The rental cost will be $500 per month. In addition, we must rent equipment for use in producing the new product; the rental cost will be $4,000 per month. We will hire workers to manufacture the new product, with the direct labor cost amounting to $60 per unit. The space in Building X will continue to be depreciated on a straight-line basis, as in prior years. This depreciation is $8,000 per year. Advertising costs for the new product will total $50,000 per year. I am going to hire a supervisor to oversee production; her salary will be $3,500 per month. Electricity for operating the machines will be $1 per unit. The cost of shipping the new product to customers will be $9 per unit. To provide funds to purchase materials, meet payroll, and so forth, we will have to liquidate some temporary investments. These investments are presently yielding a return of about $3,000 per year. I would like to sell the new product for $200 per unit. The marketing department thinks that at that price we should be able to sell 4,000 units every year. Please review the costs below and let me know if you think the costs should be classified as a product cost, a period cost, or an opportunity cost (pick one). I also would like to know if the behavior of the product cost or period cost is fixed or variable. Opportunity costs should not be classified as fixed or variable. (Hint: There are two opportunity costs in this problem. They are the two items that are ‘revenue’ in the list of costs.) Name of Cost Variable or Fixed Cost Product Cost Period Cost Opportunity Cost Rental revenue (from Smith Co.) forgone, $30,000 per year Direct materials cost, $80 per unit Rental cost of warehouse, $500 per month Rental cost of equipment, $4,000 per month Direct labor cost, $60 per unit Depreciation of Building X, $8,000 per year Advertising cost, $50,000 per year Supervisor’s salary, $3,500 per month Electricity for machines, $1 per unit Shipping cost, $9 per unit Revenue earned on investments, $3,000 per year Based on the information above, do you think we should manufacture the new product or should we continue to rent to Smith Company? In the space below and on the next pages, please provide me with numbers to support your answer. Are there any costs that are not relevant in this decision? How many units do we need to sell in order to ‘break even?’ Option 1: Continue to rent to Smith Company Rental revenue from Smith _______________ Investment revenue _______________ Total revenue _______________ Expenses: ________________________ _______________ Net operating income _______________ Option 2: Manufacture the new product Henry Hawkins Industries Contribution Format Income Statement: New Product For the Year Total Per Unit Sales (4,000 units) $800,000 $200 Variable expenses: _____________________ _______________ ______ _____________________ _______________ ______ _____________________ _______________ ______ _____________________ _______________ ______ Total variable expenses _______________ ______ Contribution margin _______________ ______ Fixed expenses: _____________________ _______________ _____________________ _______________ _____________________ _______________ _____________________ _______________ _____________________ _______________ Total fixed expenses _______________ Net operating income _______________ Questions: 1. Do you recommend Option 1 or Option 2? 2. Which cost is not relevant to the decision? (Hint: which cost shows up in both options.) 3. How many units of the new product do we need to sell in order to ‘break-even?’ (Break-even is where the net operating income is zero.)

12. Buy on time or pay cash?

You are going to make a substantial purchase. You have enough money to pay cash, but don’t know if that’s the way to make best use of your assets. Maybe you should take out an installment loan to make the purchase and invest the cash you would otherwise have used to pay for it.

Use the information provided to complete the following worksheet and analyze how the numbers work out most favorably for you. For simplicity, compounding is ignored in calculating both the cost of interest and interest earnings. [Note: Enter your dollar answers rounded to the nearest two cents and precede numbers that are less than zero (0) with a minus sign (–).]

Based on the numbers alone, you should      because:

The interest on a loan will cost you more than the interest you would earn if you invested the principal.

If you invest the principal, you’ll earn more interest than you’ll pay on the loan.