Problem 5 Mighty Muffler, Inc. operates an automobile service facility, which specializes in replacing mufflers on cars. The following table shows the costs incurred during a month when 750 mufflers were replaced. Number of Muffler Replacements 750 500 1.000 Total costs Fixed costs Variable costs Total costs Cost per muffler replacement Fixed cost Variable cost P60,000 37,500 97,500 a b. f k Total cost per replacement Required: Fill in the missing amounts. m

Problem 5 Mighty Muffler, Inc. operates an automobile service facility, which specializes in replacing mufflers on cars. The following table shows the costs incurred during a month when 750 mufflers were replaced. Number of Muffler Replacements 750 500 1.000 Total costs Fixed costs Variable costs Total costs Cost per muffler replacement Fixed cost Variable cost P60,000 37,500 97,500 a b. f k Total cost per replacement Required: Fill in the missing amounts. m

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 4EA: Hicks Contracting collects and analyzes cost data in order to track the cost of installing decks on...

See similar textbooks

Similar questions

Hicks Contracting collects and analyzes cost data in order to track the cost of installing decks on new home construction jobs. The following are some of the costs that they incur. Classify these costs as fixed or variable costs and as product or period costs. Lumber used to construct decks ($12.00 per square foot) Carpenter labor used to construct decks ($10 per hour) Construction supervisor salary ($45,000 per year) Depreciation on tools and equipment ($6,000 per year) Selling and administrative expenses ($35,000 per year) Rent on corporate office space ($34,000 per year) Nails, glue, and other materials required to construct deck (varies per job)
The construction Company lands a project for painting offices with the following information available with regards to cost of paint: Paint 1 (Prepping) R78.00 Paint 2 (Finishing) Direct Material Cost per unit R92.00 Direct labor Cost per unit R48.00 R68.00 Direct overhead cost per unit R17.00 R16.00 Fixed cost per unit R135.00 R187.00 Sales price per unit R325.00 R520.00 The new supplier offers paint 1 at R187 and Paint 2 at R155 2.1 Calculate the lifecycle cost of the painting Job 2.2 Should the company buy 1 or both paints from current supplier or new supplier? I.
1/ Philadelphia Acoustics builds innovative speakers for music and home theater systems. Identify each cost as variable (V), fixed (F), or mixed (M), relative to number of speakers produced and sold. 1. Units of production depreciation on routers used to cut wood enclosures. 2. Wood for speaker enclosures. 3. Patents on crossover relays. 4. Total compensation to salesperson who receives a salary plus a commission based on meeting sales goals. 5. Crossover relays. 6. Straight-line depreciation on manufacturing plant. 7. Grill cloth. 8. Cell phone costs of salesperson. 9. Glue. 10. Quality inspector's salary 2/Gabrick Company sells a product for $30 per unit. Variable costs are $20 per unit, and fixed costs are $2,500 per month. The company expects to sell 560 units in September. Prepare an income statement for September using the contribution margin format.
Classifying costs The following is a list of costs that were incurred in the production and sale of all-terrain vehicles (ATVs). a.Attorney fees for drafting a new lease for headquarters offices. b.Cash paid to outside firm for janitorial services for factory. c. Commissions paid to sales representatives, based on the number of ATVs sold. d.Cost of advertising in a national magazine. e.Cost of boxes used in packaging ATVs. f. Electricity used to run the robotic machinery. g.Engine oil used in engines prior to shipment. h. Factory cafeteria cashier's wages. i. Filler for spray gun used to paint the ATVs. j. Gasoline engines used for ATVs. k.Hourly wages of operators of robotic machinery used in production. I. License fees for use of patent for transmission assembly, based on the number of ATVs produced. m. Maintenance costs for new robotic factory equipment, based on hours of usage. n. Paint used to coat the ATVs. o.Payroll taxes on hourly assembly line employees. p.Plastic for outside housing of ATVs. q.Premiums on insurance policy for factory buildings. r. Properly taxes on the factory building and equipment. s.Salary of factory supervisor. t. Salary of quality control supervisor who inspects each ATV before it is shipped. u.Salary of vice president of marketing. v. Steering wheels for ATVs. w. Straight-line depreciation on the robotic machinery used to manufacture the ATVs. x.Steel used in producing the ATVs. y.Telephone charges for company controller's office. z.Tires for ATVs. Instructions Classify each cost as either a product cost or a period cost. Indicate whether each product cost is a direct materials cost, a direct labor cost, or a factory overhead cost. Indicate whether each period cost is a selling expense or an administrative expense. Use the following tabular headings for your answer, placing an "X" in the appropriate column.
Pia Manufacturing Company has developed the following overhead cost formulas: (refer to image) Based on these cost formulas. The total overhead cost expected if 200 machine hours are worked is: Cost Formula Depreciation P500 Set up P400 plus PO.20 per machine-hour P50 plus PO.25 per machine-hour PO.40 per machine-hour Lubrication Utilities a. P620 b. P900 c. P170 d. P1,120
1. A company is going to buy a new machine for manufacturing its product. Four different machines are available. Cost, operating and other expenses are as follows: D. First Cost P24,000 1,300 11,600 P30,000 P1,360 P49,600 Power per year Labor per year P2,400 4,200 P52,000 P2,020 2,000 9,320 Maintenance per year 2,800 1,900 1,300 700 Taxes and insurance 3% 3% 3% 3% Estimated life 5 years 5 years 5 years 5 years Money is worth 17% before taxes to the company. Which machine should be chosen?
Choose from the dropdown given whether the associated cost or benefit is relevant/irrelevant to the related decision. Relevant/ Decision Cost or Benefit Irrelevant $300 repair bill to fix brakes. 1 Decision: Should you take the bus or drive your car to school for the semester? Unavoidable fixed overhead. Decision: Eliminate an unprofitable segment. 2. 3. Decision: Make or buy a component used in manufacturing a product. Selling price of the final product. Variable overhead 4. Decision: Accept a special order. The cost of prod ucing an unfinished and unassembled table Decision: Sell unassembled and unfinished furniture or sell finished assembled furniture. 5 Decision: XYZ Tire Company is considering dropping one of its 10 models of tires 6 Common fixed costs. Decision: ABC Golf Co. produces custom golf clubs and is considering purchasing the putter from a manufacturer 7. Direct labor of custom putters Decision: A major regional airline has been approached to provide 200 seats at a…
What should be done? Problem 2 (Make or Buy a Component) Diamond Inc., manufactures a variety of heating and air-conditioning units. The company is currently manufacturing all of its own component parts. An outside supplier has offered to sell a thermostat to Diamond for P200 per unit. To evaluate this offer, Diamond lInc., has gathered the following information relating to its own cost of producing the thermostat internally. Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead, traceable Fixed manufacturing overhead, common, but allocated Total cost 40% supervisory salaries; 60% depreciation of special equipment (no resale value) Per unit P 60 80 10 50 15,000 units per year P. 900,000 1,200,000 150,000 750,000 1.500.000 P 4, 500,000 100 P 300 Required: 1. Assuming that the company has no alternative use for the facilities now being used to produce the thermostat, should the outside supplier's offer be accepted? Show all computations. 2. Suppose…
Help Save Recher Corporation uses part Q89 In one of Its products. The company's Accounting Department reports the following costs of producing the 7,100 units of the part that are needed every year. Par Unit $ 7.50 $ 4.10 $ 8.00 $ 3.00 $ 2.50 $ 1.30 Direct materials Direct labor Variable overhead Supervisor's salary Depreciation of special equipment Allocated general overhead An outside supplier has offered to make the part and sell it to the company for $26.00 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 $3,200 of these allocated general overhead costs would be avoided. In addition, the space used to produce part Q89 could be used to make more of one of the…
Required information [The following information applies to the questions displayed below.] Celestial Products, Inc., has decided to introduce a new product, which can be manufactured by either a computer- assisted manufacturing system or a labor-intensive production system. The manufacturing method will not affect the quality of the product. The estimated manufacturing costs by the two methods are as follows: Direct material Direct labor (DLH denotes direct-labor hours) Variable overhead Fixed overhead* Computer-Assisted Manufacturing System $ Volume 0.5DLH @ $25.50 0.5DLH @ $16.50 9.00 12.75 8.25 $4,410,000 units Labor-Intensive Production System $ 0.8DLH @ $21.00 0.8DLH @ $16.50 *These costs are directly traceable to the new product line. They would not be incurred if the new product were not produced. 9.90 16.80 13.20 $2,730,000 The company's marketing research department has recommended an introductory unit sales price of $75.00. Selling expenses are estimated to be $900,000…
Mozaic Inc. has decided to introduce a new product, which can be manufactured by either a computer-assisted manufacturing system (CAM) or a labor-intensive production system (LIP). The manufacturing method will not affect the quality of the product. The estimated manufacturing costs by the two methods are as follows: www CAM System LIP System Direct Material $5.00 $5.60 Direct Labor (DLH) 0.5 DLH x $12 $6.00 0.8 DLH x $9 $7.20 Variable Overhead 0.5 DLH x $6 $3.00 0.8 DLH x $6 $4.80 Fixed Overhead* $2,440,000 $1,320,000 * These costs are directly traceable to the new product line. They would not be incurred if the new product were not produced. The company's marketing research department has recommended an introductory unit sales price of $30. Selling expenses are estimated to be $500,000 annually plus $2 for each unit sold. (Ignore income taxes.) Required: 1. Describe the circumstances under which the firm should employ each of the two manufacturing methods. 2. Identify some business…
Ethan Manufacturing Inc. produces floor mats for automobiles. The owner, Joseph Ethan, has asked you to assist in estimating maintenance costs. Together, you and Joseph determine that the single best cost driver for maintenance costs is machine hours. These data are from the previous fiscal year for maintenance costs and machine hours: Month 1 2345 67 000 8 9 10 11 12 Maintenance Costs $ 2,740 2,900 3,050 3,160 3,240 3,210 3,150 2,990 2,760 2,360 2,370 2,590 Machine Hours 1,830 1,910 1,990 2,010 2,040 2,020 2,000 1,980 1,840 Required 1 Required 2 1,240 1,440 1,730 Required: 1. What is the cost equation for maintenance costs using the high-low method? 2. Calculate the mean absolute percentage error (MAPE) for the cost equation you developed in requirement 1. Complete this question by entering your answers in the tabs below. Calculate the mean absolute percentage error (MAPE) for the cost equation you developed in requirement 1. (Do not round intermediate calculations, with the exception…