Minnesota Office Products (MOP) produces three different paper products at its Vaasa lumber plant: Supreme, Deluxe, and Regular. Each product has its own dedicated production line at the plant. It currently uses the following three-part classification for its manufacturing costs: direct materials, direct manufacturing labor, and manufacturing overhead costs. Total manufacturing overhead costs of the plant in July 2017 are $150 million ($15 million of which are fixed). This total amount is allocated to each product line on the basis of the direct manufacturing labor costs of each line. Summary data (in millions) for July 2017 are as follows: Direct material costs Direct manufacturing labor costs Manufacturing overhead costs Units produced Supreme 89 16 48 125 Deluxe 57 26 78 150 Regular 60 8 24 140 What is the manufacturing cost per unit of the Supreme paper product? Total 206 50 150 415

Minnesota Office Products (MOP) produces three different paper products at its Vaasa lumber plant: Supreme, Deluxe, and Regular. Each product has its own dedicated production line at the plant. It currently uses the following three-part classification for its manufacturing costs: direct materials, direct manufacturing labor, and manufacturing overhead costs. Total manufacturing overhead costs of the plant in July 2017 are $150 million ($15 million of which are fixed). This total amount is allocated to each product line on the basis of the direct manufacturing labor costs of each line. Summary data (in millions) for July 2017 are as follows: Direct material costs Direct manufacturing labor costs Manufacturing overhead costs Units produced Supreme 89 16 48 125 Deluxe 57 26 78 150 Regular 60 8 24 140 What is the manufacturing cost per unit of the Supreme paper product? Total 206 50 150 415

Name: Minnesota Office Products (MOP) produces three different paper produc
Uploaded: 2024-03-20T06:32:49.000Z
Channel: Bartleby
Description: Minnesota Office Products (MOP) produces three different paper products at its Vaasalumber plant: Supreme, Deluxe, and Regular. Each product has its own dedicatedproduction line at the plant. It currently uses the following three-part classification

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Minnesota Office Products (MOP) produces three different paper products at its Vaasa lumber plant: Supreme, Deluxe, and Regular. Each product has its own dedicated production line at the plant. It currently uses the following three-part classification for its manufacturing costs: direct materials, direct manufacturing labor, and manufacturing overhead costs. Total manufacturing overhead costs of the plant in July 2017 are $150 million ($15 million of which are fixed). This total amount is allocated to each product line on the basis of the direct manufacturing labor costs of each line. Summary data (in millions) for July 2017 are as follows: Supreme 89 16 48 125 Answer: Deluxe 57 26 78 150 Regular 60 8 24 140 Direct material costs Direct manufacturing labor costs Manufacturing overhead costs Units produced What are the total manufacturing costs of the Regular paper product? Total 206 50 150 415
Computing and interpreting manufacturing unit costs. Minnesota Office Products (MOP) produces three different paper products at its Vaasa lumber plant Supreme, Deluxe, and Regular. Each product has its own dedicated production line at the plant. It currently uses the following three-part classification for its manufacturing costs: direct materials, direct manufacturing labor, and manufacturing overhead costs. Total manufacturing overhead costs of the plant in July 2017 are $150 million ($15 million of which are fixed). This total amount is allocated to each product line on the basis of the direct manufacturing labor costs of each line. Summary data (in millions) for July 2017 are as follows: Regular $ 60 Supreme $ 89 $ 16 $ 48 Deluxe $ 57 $ 26 $ 78 Direct material costs Direct manufacturing labor costs Manufacturing overhead costs Units produced $ 24 140 125 150 1. Compute the manufacturing cost per unit for each product produced in July 2017. 2. Suppose that, in August 2017,…
2) Minnesota Office Products (MOP) produces three different paper products at its Vaasa lumber plant: Supreme, Deluxe, and Regular. Each product has its own dedicated production line at the plant. It currently uses the following three-part classification for its manufacturing costs: direct materials, direct manufacturing labor, and manufacturing overhead costs. Total manufacturing overhead costs of the plant in July 2011 are $150 million ($15 million of which are fixed). This total amount is allocated to each product line on the basis of the direct manufacturing labor costs of each line. Summary data (in millions) for July 2011 are as follows: Supreme Deluxe Regular Direct material costs $ 89 $ 57 $ 60 Direct manufacturing labor costs $ 16 $ 26 $ 8 Manufacturing overhead costs $ 48 $ 78 $ 24 Units produced 125 150 140 a. Compute the manufacturing cost per unit for each product produced in July 2011. b. Suppose that in August 2011, production was 150 million units of Supreme, 190…
Innovating Motors Company makes electric cars and has two products, the iHybrid and the iBrilliant. To produce the iHybrid, Innovating Motors employed assets of $10,500,000 at the beginning of 2017 and $14,450,000 of assets at the end of 2017. Other costs to manufacture the iHybrid include the following:Direct materials $5,000 per unitSetup $1,500 per setup-hour Production $ 415 per machine-hourGeneral administration and selling costs for iHybrid total $7,820,000 in 2017. During the year, Innovating Motors produced 11,000 iHybrid cars using 6,000 setup-hours and 139,000 machine-hours. It sold these cars for $12,000 each.Required:i. Assuming that Innovating Motors defines investment as average assets during the period,what is the return on investment for the iHybrid division? ii. Calculate the residual income for iHybrid if Innovating Motors has a required rate of return of 16% on investments. iii. Based on its values and strategic thrusts, Innovating Motors is committed to sustainable…
Excellent Motor Company makes electric cars and has two products, the Simplegreen and the Excellentgreen. To produce the Simplegreen, Excellent Motor employed assets of $10,500,000 at the beginning of 2017 and $14,450,000 of assets at the end of 2017. Other costs to manufacture the Simplegreen include the following: Direct materials $5,000 per unit Setup $1,500 per setup-hour Production $ 415 per machine-hour General administration and selling costs for Simplegreen total $7,820,000 in 2017. During the year, Excellent Motor produced 11,000 Simplegreen cars using 6,000 setup-hours and 139,000 machine-hours. It sold these cars for $12,000 each. Q. Calculate the residual income for Simplegreen if Excellent Motor has a required rate of return of 16% on investments.
Excellent Motor Company makes electric cars and has two products, the Simplegreen and the Excellentgreen. To produce the Simplegreen, Excellent Motor employed assets of $10,500,000 at the beginning of 2017 and $14,450,000 of assets at the end of 2017. Other costs to manufacture the Simplegreen include the following: Direct materials $5,000 per unit Setup $1,500 per setup-hour Production $ 415 per machine-hour General administration and selling costs for Simplegreen total $7,820,000 in 2017. During the year, Excellent Motor produced 11,000 Simplegreen cars using 6,000 setup-hours and 139,000 machine-hours. It sold these cars for $12,000 each. Q. Assuming that Excellent Motor defines investment as average assets during the period, what is the return on investment for the Simplegreen division?
Madison Enterprises manufactures and sells two types of dump trucks, Standard and Economy. The company's production process is organized into two departments, Fabrication and Assembly. For the upcoming year, Madison estimates total direct labor hours (DLHs) of 15,660, total machine hours (MHs) of 12,500, and total manufacturing overhead of $6,264,000. Historically, Madison applied overhead to jobs using a plantwide rate based on DLHS. Madison's production schedule for the upcoming, in terms of units produced, DLHs per unit, and total DLHS for the plant is as follows: Standard Economy Units produced DLH per unit 180 102 70 30 Madison plans to switch to departmental rates based on MHs for the Fabrication Department and DLHS for the Assembly Department. Here are estimated overhead data for the upcoming year: Fabrication department Assembly department Total overhead costs $2,739,000 $3,525,000 Plantwide DLH 12,600 3,060 O $22,914 higher using departmental rates $4,785 higher using…
The Oliver Company manufactures products in two departments: Mixing and Packaging. The company was allocating manufacturing overhead using a single plantwide rate of $2.40 with direct labor hours as the allocation base. The company has refined its allocation system by separating manufacturing overhead costs into two cost pools—one for each department. The estimated costs for the Mixing Department, $490,000, will be allocated based on direct labor hours, and the estimated direct labor hours for the year are 175,000. The estimated costs for the Packaging Department, $103,500, will be allocated based on machine hours, and the estimated machine hours for the year are 30,000. In October, the company incurred 68,000 direct labor hours in the Mixing Department and 3,000 machine hours in the Packaging Department. Read the requirements LOADING... . Requirement 1. Compute the predetermined overhead allocation rates. Round to two decimal places. Begin by selecting the formula…
D’Ace Corporation (ACE) manufactures two products, Product DAC and Product DIB. Product DIB requires two hours of direct labour time per unit to manufacture compared to one hour of direct labour time for Product DAC.Overhead is currently assigned to the products on the basis of direct-labour-hours. The company estimated it would incur $450,000 in manufacturing overhead costs and produce 30,000 units of Product DAC and 7,500 units of Product DIB during the current year. Unit costs for materials and direct labour are: Product DAC Product DIB Direct material $12 $35 Direct labour $10 $20 If the company allocates all of its overhead based on direct labour-hours, the unit product cost of Product DIB would be closest to:
Penagos Corporation is presently making part Z43 that is used in one of its products. A total of 5,000 units of this part are produced and used every year. The company's Accounting Department reports the following costs of producing the part at this level of activity: Direct materials. Direct labor Variable overhead Supervisor's salary Depreciation of special equipment Allocated general overhead An outside supplier has offered to produce and sell the part to the company for $20.80 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company. If the outside supplier's offer were accepted, only $4,000 of these allocated general overhead costs would be avoided. If management decides to buy part Z43 from the outside supplier rather than to…
The Parts Division of Mally Company makes Part XYZ, which it sells to outside companies for $26 per unit. According to the cost accounting system, the costs of making one unit of Part XYZ consist of $8 for direct materials, $4 for direct labor, $4.50 for variable manufacturing overhead, and $1.4 for fixed manufacturing overhead. The Parts Division has capacity of 5,000 units of part XYZ each month and currently is selling 4,200 units of Part XYZ each month. The Assembly Division of Mally Company can use Part XYZ in one of its products. At present, the Assembly Division is purchasing an equivalent part from an outside supplier for $17.3 per unit. The Assembly Division needs 2,000 units of the part each month. It has been suggested that the Assembly Division buy Part XYZ from the Parts Division instead of buying the equivalent part from the outside supplier. As far as the Parts Division is concerned, what is the lowest acceptable transfer price?
Precision Manufacturing Inc. (PMI) makes two types of industrial component parts—the EX300 and the TX500. It annually produces 55,000 units of EX300 and 12,000 units of TX500. The company’s conventional cost system allocates manufacturing overhead to products using a plantwide overhead rate and direct labor dollars as the allocation base. Additional information relating to the company’s two product lines is shown below: EX300 TX500 Total Direct materials $ 361,325 $ 157,550 $ 518,875 Direct labor $ 115,000 $ 40,000 $ 155,000 The company is considering implementing an activity-based costing system that distributes all of its manufacturing overhead to four activities as shown below: Activity Activity Cost Pool(and Activity Measure) Manufacturing Overhead EX300 TX500 Total Machining (machine-hours) $ 224,750 85,000 60,000 145,000 Setups (setup hours) 105,000 50 250 300 Product-level (number of products)…