(Appendix 12A) Qualls Company makes a product that has the following costs:Direct materialsDirect labourVariable manufacturingoverheadFixed manufacturingoverheadVariable SG&AexpensesFixed SG&A expensesPer unit$17.3013.004.202.00Per year$900,000890,800The company uses the absorption costing approach to cost-plus pricing. The pricingcalculations are based on budgeted production and sales of 48,000 units per year.The company has invested $360,000 in this product and expects a return oninvestment of 15%Rain tomorrowLENG

To determine the cost-plus pricing for Qualls Company's product, we first calculated the total…

Answered: (Appendix 12A) Qualls Company makes a…

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter10: Cost Analysis For Management Decision Making

Section: Chapter Questions

Problem 9P: Grand Canyon Manufacturing Inc. produces and sells a product with a price of 100 per unit. The...

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Grand Canyon Manufacturing Inc. produces and sells a product with a price of 100 per unit. The following cost data have been prepared for its estimated upper and lower limits of activity: Overhead: Selling and administrative expenses: Required: 1. Classify each cost element as either variable, fixed, or semi-variable. (Hint: Recall that variable expenses must go up in direct proportion to changes in the volume of activity.) 2. Calculate the break-even point in units and dollars. (Hint: First use the high-low method illustrated in Chapter 4 to separate costs into their fixed and variable components.) 3. Prepare a break-even chart. 4. Prepare a contribution income statement, similar in format to the statement appearing on page 540, assuming sales of 5,000 units. 5. Recompute the break-even point in units, assuming that variable costs increase by 20% and fixed costs are reduced by 50,000.
The company makes a product with the following costs: Direct materials→₱17.00; Direct labor→₱22.00; Variable manufacturing overhead→₱4.00; Fixed manufacturing overhead→₱504,000.00; Variable selling, general and administrative expenses→₱4.90; Fixed selling, general and administrative expenses→₱319,200. The company uses the absorption costing approach to cost-plus pricing. The pricing calculations are based on budgeted production and sales of 30,000 units per year. The company has invested ₱360,000 in this product and expects a return on investment of 15%. Tax rate is 25%. The markup on absorption cost would be closest to: a. 41.72% b. 15.00% c. 30% d. 43% e. 37.45% f. 45.30%
The company makes a product with the following costs: Direct materials→₱15.70; Direct labor→₱19.70; Variable manufacturing overhead→₱3.50; Fixed manufacturing overhead→₱1,146,600.00; Variable selling, general and administrative expenses→₱2.00; Fixed selling, general and administrative expenses→₱984,900. The company uses the absorption costing approach to cost-plus pricing described in the text. The pricing calculations are based on budgeted production and sales of 49,000 units per year. The company has invested ₱340,000 in this product and expects a return on investment of 9%. Direct labor is a variable cost in this company. The markup on absorption cost is closest to: a. 118.6% b. 36.5% c. 35.5% d. 9.0%
The company makes a product with the following costs: Direct materials→₱15.70; Direct labor→₱19.70; Variable manufacturing overhead→₱3.50; Fixed manufacturing overhead→₱1,146,600.00; Variable selling, general and administrative expenses→₱2.00; Fixed selling, general and administrative expenses→₱984,900. The company uses the absorption costing approach to cost-plus pricing described in the text. The pricing calculations are based on budgeted production and sales of 49,000 units per year. The company has invested ₱340,000 in this product and expects a return on investment of 9%. Absorption cost is 36.5%. Direct labor is a variable cost in this company. The selling price based on the absorption costing approach is closest to: a. ₱84.40 b. ₱85.02 c. ₱53.09 d. ₱115.19
The firm manufactures a product with the following costs: Direct materials→₱18.00; Direct labor→₱11.90; Variable manufacturing overhead→₱2.10; Fixed manufacturing overhead→₱1,422,000; Variable selling, general and administrative expenses→₱3.60; Fixed selling, general and administrative expenses→₱1,540,500. The company uses the absorption costing approach to cost-plus pricing. The pricing calculations are based on budgeted production and sales of 79,000 units per year. The company has invested ₱420,000 in this product and expects a return on investment of 15%. The selling price based on the absorption costing approach would be closest to: a. ₱108.04 b. ₱73.90 c. ₱47.29 d. ₱73.10
The firm manufactures a product with the following costs: Direct materials→₱14.00; Direct labor→₱12.00; Variable manufacturing overhead→₱3.00; Fixed manufacturing overhead→₱1,500,000; Variable selling, general and administrative expenses→₱2.00; Fixed selling, general and administrative expenses→₱1,000,000. The company uses the absorption costing approach to cost-plus pricing. The pricing calculations are based on budgeted production and sales of 80,000 units per year. The company has invested ₱500,000 in this product and expects a return on investment of 25%. Tax rate is 25%.
The firm manufactures a product with the following costs: Direct materials→₱14.00; Direct labor→₱12.00; Variable manufacturing overhead→₱3.00; Fixed manufacturing overhead→₱1,500,000; Variable selling, general and administrative expenses→₱2.00; Fixed selling, general and administrative expenses→₱1,000,000. The company uses the absorption costing approach to cost-plus pricing. The pricing calculations are based on budgeted production and sales of 80,000 units per year. The company has invested ₱500,000 in this product and expects a return on investment of 25%. Tax rate is 25%. The selling price based on the absorption costing approach would be closest to: a. ₱50.46 b. ₱47.75 c. ₱83.08 d. ₱73.10 e. ₱64.33 f. ₱73.90
Relevant costs; special order pricingKantrovitz Company is a manufacturer of industrial components. One of its products, AP110, is used as a subcomponent in appliance manufacturing. This product has the following information per unit: Selling price $150.00 Costs: Direct material $20.00 Direct labor 15.00 Variable manufacturing overhead 12.00 Fixed manufacturing overhead 30.00 Shipping and handling 3.00 Fixed selling and administrative 10.00 Total per-unit cost $90.00 a. Kantrovitz has received a special, one-time order for 1,600 AP110 parts. Assuming Kantrovitz has excess capacity, what is the minimum price that is acceptable for beginning negotiations on this order? Answer: $50 d. Referring to (a), Kantrovitz has received a special, one-time order for 1,600 AP110 parts. Assume that Kantrovitz is operating at full capacity, and that the contribution of the output would be displaced by the one-time special order. Using the original data, compute the minimum…
Relevant costs; special order pricingKantrovitz Company is a manufacturer of industrial components. One of its products, AP110, is used as a subcomponent in appliance manufacturing. This product has the following information per unit: Selling price $150.00 Costs: Direct material $20.00 Direct labor 15.00 Variable manufacturing overhead 12.00 Fixed manufacturing overhead 30.00 Shipping and handling 3.00 Fixed selling and administrative 10.00 Total per-unit cost $90.00 a. Kantrovitz has received a special, one-time order for 1,000 AP110 parts. Assuming Kantrovitz has excess capacity, what is the minimum price that is acceptable for beginning negotiations on this order? $Answer b. Kantrovitz has 5,000 units of AP110 in inventory that have some defects. The units cannot be sold through regular channels without a significant price reduction. What per-unit cost figure is relevant for setting a minimum selling price on these units? $Answer c. During the next…
Relevant costs; special order pricingKantrovitz Company is a manufacturer of industrial components. One of its products, AP110, is used as a subcomponent in appliance manufacturing. This product has the following information per unit: Selling price $150.00 Costs: Direct material $20.00 Direct labor 15.00 Variable manufacturing overhead 12.00 Fixed manufacturing overhead 30.00 Shipping and handling 3.00 Fixed selling and administrative 10.00 Total per-unit cost $90.00 a. Kantrovitz has received a special, one-time order for 1,600 AP110 parts. Assuming Kantrovitz has excess capacity, what is the minimum price that is acceptable for beginning negotiations on this order? $Answerb. Kantrovitz has 8,000 units of AP110 in inventory that have some defects. The units cannot be sold through regular channels without a significant price reduction. What per-unit cost figure is relevant for setting a minimum selling price on these units? $Answerc. During the next year,…
Coronado Inc. has conducted the following analysis related to its product lines, using a traditional costing system (volume-based) and an activity-based costing system. The traditional and the activity-based costing systems assign the same amount of direct materials and direct labor costs. Products Product 540X Product 137Y Product 249S (a) Sales Revenue $210,000 Product 137Y * Your answer is incorrect. Product 540X $ LA LA 166,000 LA 94,000 Product 249S $ Total Costs Traditional $59,000 For each product line, compute operating income using the traditional costing system. 49,000 17,000 160060 131040 ABC 53900 $49,940 34,960 40,100
V&S Mechanical sells and services plumbing, heating, and air conditioning systems. V&S's cost accounting system tracks two cost categories: direct labor and direct materials V&S uses a time-and-materials pricing system, with direct labor marked up 100% and direct materials marked up 50% to recover indirect costs of support staff, support materials, and shared equipment and tools and to earn a profit (Click the icon to view the cost information) Read the requirements Requirement 1. If Dryden presents Lowry with the replace or repair options, what price would he quote for each? Complete the table below to determine the price Dryden would quote for each option Labor Materials Total Price Repair option Replace option Requirements 1. if Dryden presents Lowry with the replace or repair options, what price would he quote for each? 2. If the two options were equally effective for the 3 years that Lowry intends to live in the home, which option would she choose? 3. if Dryden's objective is to…

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