A manufacturer produces both widgets and gadgets. Widgets generate a profit of $70 each and gadgets have a profit margin of $50 each. To produce each item, a setup cost is incurred. This setup cost is $600 for widgets and $300 for gadgets. Widgets consume 6 units of raw material A and 4 units of raw material B. Gadgets consume 6 units of raw material A and 2 units of raw material B. Each day, the manufacturer has 600 units of each raw material available. Assume that it is possible to produce fractional quantities of widgets and gadgets.
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- LENILOVESBATO Co. produces various types of floor rugs with many different designs. They typically produce at least 200 rugs with a single machine setup. A cost incurred each time a new rug design is developed is called a(n) a. Unit-level cost b. Batch-level cost c. Product-level cost d. Facility-level costA manufacturer of Blu-ray Discs (BDs) estimates the yearly demand for a BD to be 10,000. It costs $400 to set up the machinery to burn the BDs, plus $3 for each one produced. If it costs the company $2 to store a BD for a year, how many should be burned at a time and how many production runs will be needed to minimize costs? BDs burned at a time production runsJoint Products Choi Company manufactures two skin care lotions, Smooth Skin and Silken Skin,from a joint process. The joint costs incurred are $420,000 for a standard production run that generates 180,000 pints of Smooth Skin and 120,000 pints of Silken Skin. Smooth Skin sells for $2.40 perpint, while Silken Skin sells for $3.90 per pint.Required1. Assuming that both products are sold at the split-off point, how much of the joint cost of each production run is allocated to Smooth Skin using the relative sales value method?2. If no separable costs are incurred after the split-off point, how much of the joint cost of each productionrun is allocated to Silken Skin using the physical measure method method?3. If separable processing costs beyond the split-off point are $1.40 per pint for Smooth Skin and $0.90 perpint for Silken Skin, how much of the joint cost of each production run is allocated to Silken Skin usinga net realizable value method?4. If separable processing costs beyond the…
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