Requirement 1. Calculate the total variable costs of producing 2, 3, and 4 units assuming that Northern Defense uses an 85% incremental unit-time learning model as a basis for predictingmanufacturing labor-hours.Begin by calculating the cumulative total time in labor-hours using the incremental unit-time learning model. (Round the individual unit time for Xth unit to the nearest whole number)Individual unit time for Cumulative total time:Cumulativenumber of units12Xth unit: Labor-hoursLabor-hours3Data tableDirect materials costDirect manufacturing labor time for first unitLearning curve for manufacturing labor time per radar systemVariable manufacturing overhead costs$ 83,000 per unit of RS-32Direct manufacturing labor costs"Using the formula for an 85% learning curve, b=In 0.85In 2-0.1625190.6931473,900 direct manufacturing labor-hours85% incremental unit-time"20 per direct manufacturing labor-hour12 per direct manufacturing labor-hour=-0.234465

Variable cost refers to the expenses that change in proportion to the level of production or sales…

Requirement 1. Calculate the total variable costs of producing 2.3, and 4 units assuming that Northern Defense uses an 85% incremental unit-time learning model as a basis for manufacturing labor-hours ming model (Round the individual unit time for Xth unit to the nearest whole numbe

Requirement 1. Calculate the total variable costs of producing 2.3, and 4 units assuming that Northern Defense uses an 85% incremental unit-time learning model as a basis for manufacturing labor-hours ming model (Round the individual unit time for Xth unit to the nearest whole numbe

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter3: Cost Behavior

Section: Chapter Questions

Problem 41P: Harriman Industries manufactures engines for the aerospace industry. It has completed manufacturing...

See similar textbooks

Related questions

Q: Munoz Company operates three segments. Income statements for the segments imply that profitability…

A: Segmented Income Statement:A segmented income statement provides a more thorough analysis of…

Q: d Tempo Company's fixed budget (based on sales of 16,000 units) folllows. Fixed Budget Sales (16,000…

A: FLEXIBLE BUDGETA flexible budget is a budget that is prepared for different levels of activity or…

Q: Sylvestor Systems borrows $110,000 cash on May 15 by signing a 60-day, 12%, $110,000 note. 1. On…

A: Journal entries are the primary reporting of the business transactions in the books of accounts.…

Q: Visit a job board, such as Indeed, to research job postings in Taxation. Share your thoughts on one…

A: I checked out Indeed for tax positions and came across a posting for "Staff Tax Accountant." Here's…

Q: 15. ABC Company Issues $100,000 of 30 year 5% bonds at 102. What entry is used to record this…

A: “Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Using the indirect method, calculate the amount of cash flows from operating activities from the…

A: Cash Flow from Operating Activities -Operating activities, which indicate whether and to what…

Q: Pendulum Enterprises has a defined benefit plan. Employees receive a pension equal to 2% of the…

A: Part 1: Answer: Mary-Lou's annual pension benefit is $33,750.Explanation:Part 2: Explanation:Step 1:…

Q: Assume NOL is allowed to carry back for two years, the amount of net loss reported on the income…

A: Net loss carried forward refers to the practice of applying the current year's losses to offset…

Q: Required: Each of the following workers is a piece-rate worker at Golden Boats in Connecticut. If…

A: After deductions from gross pay, net pay is the amount of remuneration that remains distributable to…

Q: Keesha Company borrows $105,000 cash on November 1 of the current year by signing a 180-day, 7%,…

A: The journal entries are prepared to record the transactions on a regular basis. The adjustment…

Q: Ida Company produce that is similar to a xylo data for the company's Units in beginning Units

A: ABSORPTION COSTINGAbsorption Costing is a Cost Management Accounting method in which all costs…

Q: Variable and Absorption CostingChandler Company sells its product for $108 per unit. Variable…

A: Part 1: Answer:Using variable costing, Chandler Company's net income would be…

Q: Pharoah International Corporation has two divisions, beta and gamma. Beta produces an electronic…

A: Special orders generally come from customers who are not regular customers and the prices that are…

Q: Exercise 8-4 (Algo) Direct Labor Budget (LO8-5] The production manager of Rordan Corporation has…

A: Direct labor budget:- This budget is prepared to estimate the number of direct labor hours and cost…

Q: Exercise 9-11 (Algo) Working Backwards from Labor Variances [LO9-5] The auto repair shop of Quality…

A: DIRECT LABOUR COST VARIANCEDirect Labour Cost Variance is the difference between the actual direct…

Q: homework i Carver Incorporated purchased a building and the land on which the building is situated…

A: A basket purchase involves acquiring multiple assets together as a single package. Such purchases…

Q: Blossom Company sells three different categories of tools (small, medium, and large). The cost and…

A: Inventory refers to the goods, accoutrements , or products held by a business for the purpose of…

Q: Mack Precision Tool and Die has two production departments, Fabricating and Finishing, and two…

A: Cost allocation to support departmentsWhen the company has more departments, there will be a…

Q: Question 1 IFRS 15 defines a performance obligation. Which one of the following statements s…

A: The correct statement regarding performance obligations defined by IFRS 15 is:"Pool Inc. builds a…

Q: A bond has an annual coupon rate of 3.5%, a face value of $1,000, a price of $1,025.33, and matures…

A: Bond's YTM = 3.2%Explanation:YTM = [ C + (F - P) / n ] / ( F + P) / 2 )Where:C = annual coupon…

Q: Chez Fred Bakery estimates the allowance for uncollectible accounts at 3% of the ending balance of…

A: Accounts receivable : Money that the business will be receiving from its clients who have utilized…

Q: In 2023, Elaine paid $2,120 of tuition and $1,300 for books for her dependent son to attend State…

A: The American Opportunity Tax Credit (AOTC) is a credit for qualified education expenses paid by an…

Q: You are evaluating the balance sheet for PattyCake's Corporation. From the balance sheet you find…

A: Current Ratio: Indicates whether a business can use all of its current assets, such as cash and…

Q: Heidebrecht Design acquired 25% of the outstanding common stock of Sunland Company on January 1,…

A: Common Stock -A share of ownership in a firm that is designated as common stock may be associated…

Q: Choose three of the following changes that may be negotiated in a collective agreement and provide…

A: Example: Negotiating a 3% increase in base salaries for all employees.Impact on the payroll…

Q: In this week’s discussion, you will have the opportunity to visit the official employment website…

A: The objective of the question is to explore the official employment website for the Federal…

Q: For each of these two independent situations, prepare journal entries to record the following. (If

A: A journal entry is a basic accounting record that is used to chronologically track financial…

Q: The partnership of Winn, Xie, Yang, and Zed has the following balance sheet Cash other assets $…

A: Pre-distribution plan is the list of items to done during the liquidation. It is the note of a cash…

Q: Use workshee ckson 2018, he at $8,300,000. directed distribu as follows: $22,000 to the local…

A: Income tax:The income tax refers to the amount that is paid by the taxpayer to the tax authority of…

Q: Huron Company produces a commercial cleaning compound known as Zoom. The direct materials standard…

A: Standard costing: Under this costing method, the expected costs are used in the accounting records…

Q: Sunland Company uses a perpetual inventory system and reports the following for the month of June.…

A: Weighted Average Method is one of the methods of inventory valuation in which it is assumed that…

Q: Parker is a salaried, nonexempt administrator for Forise Industries and is paid biweekly. The annual…

A: Payroll register:It is a register maintained by the payroll manager at the company to record data…

Q: Altanta Industries manufactures gadgets. In the month of March, the company incurred the following:…

A: Actual rate of direct labor = Actual direct labor cost / Actual direct labor hoursStandard rate per…

Q: Concordant Inc. wants to raise $20 million by issuing 10-year zero-coupon bonds with a yield to…

A: Total face value$35.82 millionExplanation:Step 1:We have to calculate the total face value of the…

Q: Conduct a critical analysis of the various instruments utilized under regional commercial banking.

A: Regional commercial banking refers to the provision of banking services by fiscal institutions that…

Q: Prepare a pension worksheet for Cullumber Corporation for the year ending December 31, 2023.

A: Pension worksheet is a document maintained by the employer to show annual pension expense, pension…

Q: A company had the following purchases during the current year: January: 10 units at $120 February:…

A: Inventory valuation is based on the method of flow used by the organization. It can be the first in…

Q: Debit Balance Credit Balance Building 50,000 Issued subscribed & Paid up Purchases 250,451 Capital…

A: Balance sheet:A financial statement summarizes the assets and liabilities of an entity and helps in…

Q: Larkspur Mining Company purchased land on February 1, 2025, at a cost of $1,031,100. It estimated…

A: Cost of depletion refers to those costs that are incurred in the process of extracting various…

Q: Total Cost Unit Cost Total Cost Unit Cost Direct materials $8,000 $1.60 $16,000 $1.60 Direct labor…

A: Lets understand the basics.Variable costs: Variable cost is a cost that changes according to the…

Q: New Life is a multinational distribution company that started operating a Branch in Barbados on1…

A: The objective of the question is to provide tax advisory and compliance services to New Life, a…

Q: Adjusting Balance Sheet and Income Statement for LIFO to FIFO In its December 2019 10-K, Phillips 66…

A: Adjustment in accounting is a business transaction that has not yet been included in the accounting…

Q: Materials price variance Materials quantity variance a. Compute a labour rate variance and a labour…

A: Variance:The variance in accounting refers to the deviation which is between the figure of the…

Q: Lease term Annual lease payments beginning January 1, 2024 and at each December 31 thereafter…

A: Lease:A contract in which one party allows another party to use his/her property or asset in return…

Q: Henry and Janice are married and file jointly. They have an AGI (and modified AGI) of $290,000,…

A: Income tax liability refers to the amount of duty that an individual or reality owes to the…

Q: Use this information about Carmelita Inc. to answer the question that follows. Carmelita Inc. has…

A: FIFO METHOD:— Under this method, equivalent units are calculated by adding equivalent units in…

Q: Quality control reports in graphic form: (Check all that apply.): Multiple select question.…

A: The question is asking us to identify the correct statements about quality control reports in…

Q: Augusta Sports manufactures baseball caps. The company uses standards to control costs. The labor…

A: The variance is the difference between the standard and applied overhead costs. The variance is…

Q: Current Attempt in Progress Waterway Industries has two divisions; Sporting Goods and Sports Gear.…

A: Contribution margin is the amount of money earned by the entity after deducting the variable costs…

Q: Computer Wholesalers restores and resells notebook computers. It originally acquires the notebook…

A: Contingent liability refers to a potential obligation or liability that may arise in the future…

Question

Requirement 1. Calculate the total variable costs of producing 2, 3, and 4 units assuming that Northern Defense uses an 85% incremental unit-time learning model as a basis for predicting
manufacturing labor-hours.
Begin by calculating the cumulative total time in labor-hours using the incremental unit-time learning model. (Round the individual unit time for Xth unit to the nearest whole number)
Individual unit time for Cumulative total time:
Cumulative
number of units
1
2
Xth unit: Labor-hours
Labor-hours
3
Data table
Direct materials cost
Direct manufacturing labor time for first unit
Learning curve for manufacturing labor time per radar system
Variable manufacturing overhead costs
$ 83,000 per unit of RS-32
Direct manufacturing labor costs
"Using the formula for an 85% learning curve, b=
In 0.85
In 2
-0.162519
0.693147
3,900 direct manufacturing labor-hours
85% incremental unit-time"
20 per direct manufacturing labor-hour
12 per direct manufacturing labor-hour
=-0.234465

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Define variable cost

VIEW

Step 2: Calculate cumulative labor hours

VIEW

Step 3: Calculate total variable costs

VIEW

Solution

VIEW

Step by step

Solved in 4 steps with 4 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

10-29 Learning curve, incremental unit-time learning model. Assume the same information for Northern Defense as in Exercise 10-28, except that Northern Defense uses an 85% incremental unit-time learning model as a basis for predicting direct manufacturing labor-hours. (An 85% learning curve means b = -0.234465.) Calculate the total variable costs of producing 2, 3, and 4 units. If you solved Exercise 10-28, compare your cost predictions in the two exercises for 2 and 4 units. Why are the predictions different? How should Northern Defense decide which model it should use?
Consider a process with a unit cost of $40 for the first unit; that is, c(1) = 40, anda learning rate of LR = 0.9. What will be the unit costs for the 16th unit?
CLASS ACTIVITY:CASE PROBLEM The Overland Company wants to develop a cost estimating equation for its monthly cost of electricity. It has the following data: Month Electricity Cost Direct Labor January April July October P6,750 7,500 8,500 7,250 Hours 1,500 1,700 2,000 1,600 Required: Determine the following using the high-low method. a. Variable cost per hour b. Fixed Cost Cost equation/function d. How much is the total cost with 2,200 labor hours? C.
Assume the same information for the Pacific Boat Company as in Problem 10-40 with one exception. This exception is that Pacific Boat uses a 90% incremental unit-time learning model as a basis for predicting direct manufacturing labor-hours in its assembling operations. (A 90% learning curve means b = -0.152004.) Q. Prepare a prediction of the total costs for producing the six PT109s for the Navy.
10-36 Cost estimation, incremental unit-time learning model. Assume the same information for the Blue Seas Company as in Problem 10-35 with one exception. This exception is that Blue Seas uses a 90% incremental unit-time learning model as a basis for predicting direct manufacturing labor-hours in its assembling operations. (A 90% learning curve means b = −0.152004.) Prepare a prediction of the total costs for producing the six PT109s for the Navy. If you solved requirement 1 of Problem 10-35, compare your cost prediction there with the one you made here. Why are the predictions different? How should Blue Seas decide which model it should use?
1. Set up a table with columns for cumulative number of units, cumulative average time per unit in hours, and cumulative total in hours using the cumulative average time learning curve. Complete the table for 1,2,4, and 8 units. What is the cumulative total time in hours for 8 units? 2. Set up a table assuming an 80% cummulative avergae time learning curve. What is the cumulative total time in hours for 8 units? 3. What is the difference in variable cost of producing four units? (between the result using the 0.90 model and 0.80 model)
Write a linear cost function equation for each of the following conditions. Use y for estimated costsand X for activity of the cost driver. Machine operating costs include $1,000 of maintenance per month, and $15.00 of coolant usagecosts for each day the machinery is in operation.
Required information Learning Objective 05-P2: Compute the break-even point for a single-product company. A company's break-even point for a period is the sales volume at which total revenues equal total costs. To compute a break-even point in terms of sales units, we divide total fixed costs by the contribution margin per unit. To compute a break-even point in terms of sales dollars, divide total fixed costs by the contribution margin ratio. Cost-Volume-Profit Chart Dollars Maximum productive capacity = 1,800 units Sales = $180,000 $1800,000 $160,000 $140,000 $120,000 $100,000 Largest Income = $30,000 $80,000 Maximum productive capacity = 1,800 units Break-Even Point (sales of 800 units or $80,000) Total Sales Total Costs
Silven Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity Setting up equipment $138,000 Number of setups 120 Ordering materials 21,600 Number of orders 1,200 Machining 107,100 Machine hours 11,900 Receiving 16,740 Receiving hours 930 Silven produces two models of cell phones with the following expected activity demands: Model X 4,600 80 400 Units completed Number of setups Number of orders Machine hours Receiving hours Required: 6,800 310 Model X Model Y Model Y 9,200 40 800 5,100 620 1. Determine the total overhead assigned to each product using the four activity drivers. Total Overhead Assigned
Calculate the per unit cost of an intensive visit using the conventional approach. Calculate the per unit cost of an intensive visit using the ABC approach. Exhibit 12-13Data for cost allocation in Problem 13 Basic data and calculation of unit costs using a conventional approach Total Cost by Visit Type Basic Data A B C D Initial Regular Intensive Total (Given) (Given) (Given) (A + B + C) 1 Number of visits 5,000 10,000 5,000 20,000 2 Direct materials (etc.) $21,000 $14,000 $35,000 $70,000 3 Direct labor $80,000 $80,000 $240,000 $400,000 4 Estimated overhead (total is a given) $150,000 5 Cost / visit: conventional method Additional basic data 1)…
1. Top-down versus bottom-up estimates. pts. a. Describe the methods and uses of each of the approaches. 2. Compare the advantages and disadvantages of each of the approaches. 3. What are the three types of costs discussed in the text? Define them. 4. For a small project requiring 120 hours at $50/hr and having a direct overhead rate of 40%, calculate the direct cost (Exercise 1 in Chapter 5). To that add indirect costs (G&A) at 20% and then profit at 20% for a total project price. What are the estimated costs for: Design Programming In-house testing Which “approach to estimating” is this? What weaknesses are inherent in this approach? 5. Take another look at Exercise #5. Use Exercise Figure 5.1 on page 160. But now you are asked to do a bottom-up estimate based on the following data and compare it with the top-down estimate of $800,000. If confronted with these two estimates, what, if any, actions would you take? Deliverables Estimated Hours Rate:…
Harriman Industries manufactures engines for the aerospace industry. It has completed manufacturing the first unit of the new ZX-9 engine design. Management believes that the 1,000 labor hours required to complete this unit are reasonable and is prepared to go forward with the manufacture of additional units. An 80 percent cumulative average-time learning curve model for direct labor hours is assumed to be valid. Data on costs are as follows: Required: 1. Set up a table with columns for cumulative number of units, cumulative average time per unit in hours, and the cumulative total time in hours. Complete the table for 1, 2, 4, 8, 16, and 32 units. (Round hours to one significant digit.) 2. What are the total variable costs of producing 1, 2, 4, 8, 16, and 32 units? What is the variable cost per unit for 1, 2, 4, 8, 16, and 32 units?