Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN: 9781305970663
Author: Don R. Hansen, Maryanne M. Mowen
Publisher: Cengage Learning
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Textbook Question
Chapter 4, Problem 23E
Silven Company has identified the following
Silven produces two models of cell phones with the following expected activity demands:
Required:
- 1. Calculate the global consumption ratios for the two products.
- 2. Using the activity consumption ratios for number of orders and number of setups, show that the same cost assignment can be achieved using these two drivers as that of the complete, four-driver ABC system.
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ExerLight produces two types of exercise treadmils: Regular and Deluxe. The exercise craze and relatod demand is such that ExerLight could use all of its available machine hours producing either model. The two models are processed through the
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E (Click the icon to view the data.)
What product mix will maximize operating income? (Hint: Use the allocation of fixed manufacturing overhead to determine the proportion of machine hours used by each product.)
Prepare the product mix analysis.
Data table
ExerLight
Product Mix Analysis
A
B
Doluxe
Regular
Per Unit
Sale price per unit
1,050
600
2
Deluxe
Regular
111
57
Variable cosls per unit
3 Sale price
1,050 $
600
Contribution margin per unit
4 Less expenses:
Units produced with equivalent number of machine hours
5
Direct materials
260
150
Contribution margin for equivalent number of machine hours
Direct labor
80
6
178
Variable manufacturing overhead
282
94
Fixed manufacturing overhead*
144
48
Variable operating…
a)
Classify each cost as fixed, variable or mixed, using production volume as the cost driver.
b)
Use the high-low method to separate mixed costs into their fixed and variable components and prepare the cost formula for each of the mixed costs.
C. If Green Corridor Company expects a production volume of 30,000 bicycles in the coming quarter,
prepare the production cost formula for the quarter and predict the total production cost.
Use the following information for the next 2 questions (8 & 9).
Division X produces and sells a product to external and internal customers. Per-unit information about its operations include:
Selling price per unit to external customers $250 Variable manufacturing costs per unit 115 Fixed manufacturing overhead costs per unit 70
8. If X is operating at capacity and has unlimited external customer demand, what should be the minimum transfer price?
9. If X has sufficient excess capacity to meet internal demand, what should be the minimum transfer price?
Chapter 4 Solutions
Cornerstones of Cost Management (Cornerstones Series)
Ch. 4 - What is a predetermined overhead rate? Explain why...Ch. 4 - Describe what is meant by under- and overapplied...Ch. 4 - Explain how a plantwide overhead rate, using a...Ch. 4 - What are non-unit-related overhead activities?...Ch. 4 - What is an overhead consumption ratio?Ch. 4 - Overhead costs are the source of product cost...Ch. 4 - What is activity-based product costing?Ch. 4 - What are the six steps that define the design of...Ch. 4 - Explain how the cost of resources is assigned to...Ch. 4 - Prob. 10DQ
Ch. 4 - Identify and define two types of activity drivers.Ch. 4 - What are unit-level activities? Batch-level...Ch. 4 - Prob. 13DQCh. 4 - Prob. 14DQCh. 4 - Prob. 15DQCh. 4 - Prob. 1CECh. 4 - Warner Company has the following data for the past...Ch. 4 - Lansing. Inc., provided the following data for its...Ch. 4 - Larsen, Inc., produces two types of electronic...Ch. 4 - Roberts Company produces two weed eaters: basic...Ch. 4 - Golding Bank provided the following data about its...Ch. 4 - Golding Bank provided the following data about its...Ch. 4 - Electan Company produces two types of printers....Ch. 4 - Patterson Company produces wafers for integrated...Ch. 4 - Selected activities and other information are...Ch. 4 - Ripley, Inc., costs products using a normal...Ch. 4 - Predetermined Overhead Rate, Application of...Ch. 4 - Craig Company uses a predetermined overhead rate...Ch. 4 - Departmental Overhead Rates Mariposa, Inc.,...Ch. 4 - McCourt Company produces two types of leather...Ch. 4 - Deoro Company has identified the following...Ch. 4 - Prob. 17ECh. 4 - Secondary Activities Refer to the interview in...Ch. 4 - Bob Randall, cost accounting manager for Hemple...Ch. 4 - Prob. 20ECh. 4 - Bob Randall, cost accounting manager for Hemple...Ch. 4 - Silven Company has identified the following...Ch. 4 - Silven Company has identified the following...Ch. 4 - Gee Manufacturing produces two models of camshafts...Ch. 4 - Cushing, Inc., costs products using a normal...Ch. 4 - Nonunit-level drivers are prominent in...Ch. 4 - Plata Company has identified the following...Ch. 4 - Assume that the inspection activity has an...Ch. 4 - Consider the information given on two products and...Ch. 4 - Primera Company produces two products and uses a...Ch. 4 - Fisico Company produces exercise bikes. One of its...Ch. 4 - Prob. 32PCh. 4 - Glencoe First National Bank operated for years...Ch. 4 - Autotech Manufacturing is engaged in the...Ch. 4 - The Bienestar Cardiology Clinic has two major...Ch. 4 - Reducir, Inc., produces two different types of...Ch. 4 - Refer to the data given in Problem 4.36 and...Ch. 4 - Escuha Company produces two type of calculators:...
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