Waiting for answer This question has not been answered yet. You can hire a professional tutor to get the answer.

QUESTION

Molton Motors makes large turbo engines. The company manufactured a prototype engine for Apex Corporation. Cost data on that engine follow:

Molton Motors makes large turbo engines. The company manufactured a prototype engine for Apex Corporation. Cost data on that engine follow:

           Direct Material                                                          $22,000

           Direct labor (2,000 hrs @ $20 per hour)                   40,000

           Variable Mfg Overhead (based on DL cost)             24,000

                       Total cost                                                      $86,000

Based on experience, Molton uses an 80% learning curve (-0.3219) to calculate costs. Apex wants a quote on 15 additional motors (Molton will keep the prototype).

Calculate the variable cost of producing these fifteen motors.

Felton Company's total overhead costs at various levels of activity are given below:

                       Month                       DL Hours                 Total Ohd Costs

                       March                          80,000                        $412,500

                       April                            90,000                          410,000

                       May                            100,000                          585,000

                       June                            120,000                          582,500

Assume that overhead costs consist of rent, indirect materials, utilities, supervisory salaries, and maintenance. The proportion of these costs at the 80,000 direct labor-hour level of activity is:

                                   Rent (F)                                 $ 20,500

                                   Indirect materials (V)             160,000

                                   Supervisory salaries (F)            30,000

                                   Utilities (V)                               80,000

                                   Maintenance (M)                    122,000

                                               Total                          $412,500

(F) = Fixed; (V) = Variable; (M) = Mixed

The company wants to break down the maintenance cost into its variable and fixed cost components.

1. By means of the high-low method, determine the cost formula for maintenance.

2. Express the company's total overhead cost in linear equation form.

3. What total overhead cost would you expect to incur at an operating activity of 75,000 direct labor hours? At 115,000 direct labor hours?

Blue Bell Industries manufactures a single product. This product sells for $105 each. When Blue Bell produces 5,000 units, the following manufacturing costs are incurred:

           Direct materials                     $175,000

           Direct labor                             150,000

           Variable mfg overhead             50,000

           Fixed mfg overhead                402,000

            Total mfg costs                    $777,000

The selling and administrative costs are: Variable, $7 per unit; Fixed, $311,000.

Blue Bell's tax rate is 40%.

1. What is the break-even point in units? In dollars?

2. How many units does Blue Bell have to sell to earn a target net income of $48,300?

3. If sales of this product are 52,000 units, what is the net income?

Juicy Fruits produces four different kinds of fruit chewing gum: grape, strawberry, lime, and cherry. Last year's sales and cost data follow:

                                                Grape         Strawberry         Lime                    Cherry

Total sales ($)                        $40,000          $24,000           $90,000          $45,000

Selling price (per box)              $10               $12                $9                 $15

Variable cost (per box)                 8                   9                    8                    10

Fixed cost       $210,000

How many of each product must be sold to break even?

Winston Manufacturing uses direct labor cost to apply overhead to its production. The budgeted direct labor cost and budgeted manufacturing overhead were $400,000 and $480,000, respectively. The following cost data were experienced last year:

           Material inventory, 1/1/04                 $ 10,000

           Material inventory, 12/31/04                 2,000

           Work-in-process, 1/1/04                      12,000

           Finished goods, 1/1/04                        33,000

           Finished goods, 12/31/04                    23,000

           Purchases of material                           61,000

           Direct labor incurred                           45,000

           Indirect material                                  13,000

           Indirect labor                                       12,000

           Other manufacturing overhead            20,000

           Unadjusted cost of goods sold            170,000

1. Close the over/under applied overhead to cost of goods sold (journal entry).

2. Prorate the over/under applied overhead to the proper accounts using the ending account balances for prorating (journal entry).

3. need a cost of goods manufactured statement.

Show more
LEARN MORE EFFECTIVELY AND GET BETTER GRADES!
Ask a Question