Waterways has a sales mix of sprinklers, valves, and controllers as follows. Annual expected sales Sale of sprinklers Sale of valves Sale of controllers 493,920 units at $26.00 1.522.920 units at $11.00 41,160 units at $42.00 Unit variable manufacturing costs Sprinklers Valves Controllers Fixed manufacturing overhead cost (total) Valves $14.00 18.00 $30.00 Unit variable selling and administrative expense for Sprinklers Controllers Fixed selling and administrative expenses (total) $713,000 $1.00 $1.00 $3.00 $1.584,920

Waterways has a sales mix of sprinklers, valves, and controllers as follows. Annual expected sales Sale of sprinklers Sale of valves Sale of controllers 493,920 units at $26.00 1.522.920 units at $11.00 41,160 units at $42.00 Unit variable manufacturing costs Sprinklers Valves Controllers Fixed manufacturing overhead cost (total) Valves $14.00 18.00 $30.00 Unit variable selling and administrative expense for Sprinklers Controllers Fixed selling and administrative expenses (total) $713,000 $1.00 $1.00 $3.00 $1.584,920

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter3: Cost Behavior And Cost Forecasting

Section: Chapter Questions

Problem 54E: Income Statements under Absorption and Variable Costing In the coming year, Kalling Company expects...

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Income Statements under Absorption and Variable Costing In the coming year, Kalling Company expects to sell 28,700 units at 32 each. Kallings controller provided the following information for the coming year: Required: 1. Calculate the cost of one unit of product under absorption costing. 2. Calculate the cost of one unit of product under variable costing. 3. Calculate operating income under absorption costing for next year. 4. Calculate operating income under variable costing for next year.
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Hart Manufacturing makes three products. Each product requires manufacturing operations in three departments: A, B, and C. The labor-hour requirements, by department, are as follows: During the next production period the labor-hours available are 450 in department A, 350 in department B, and 50 in department C. The profit contributions per unit are 25 for product 1, 28 for product 2, and 30 for product 3. a. Formulate a linear programming model for maximizing total profit contribution. b. Solve the linear program formulated in part (a). How much of each product should be produced, and what is the projected total profit contribution? c. After evaluating the solution obtained in part (b), one of the production supervisors noted that production setup costs had not been taken into account. She noted that setup costs are 400 for product 1, 550 for product 2, and 600 for product 3. If the solution developed in part (b) is to be used, what is the total profit contribution after taking into account the setup costs? d. Management realized that the optimal product mix, taking setup costs into account, might be different from the one recommended in part (b). Formulate a mixed-integer linear program that takes setup costs provided in part (c) into account. Management also stated that we should not consider making more than 175 units of product 1, 150 units of product 2, or 140 units of product 3. e. Solve the mixed-integer linear program formulated in part (d). How much of each product should be produced and what is the projected total profit contribution? Compare this profit contribution to that obtained in part (c).
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