Do not give image format Heat Fast Inc. (HFI) is a manufacturer of heating elements for toaster ovens. To improve control over operations, the president wants toInstall a flexible budgeting system, rather than the single master budget being used at present. The following data are available forexpected costs for production. The relevant range of production levels for fixed overhead costs is 80,000 to 180,000 units:Variable costs:ManufacturingAdministrativeSellingFixed costs:ManufacturingAdministrativeVariable costs:ManufacturingAdministrativeSellingRequired:Prepare a flexible budget for each of the three sales levels: 116,000, 126,000 and 136,000 units. Each toaster oven is expected to sellfor $22.40.Total variable costsFixed costsManufacturingAdministrative$9.60/unit$5.25/unit$4.25/unitTotal fixed costsTotal costsIncome from operations$ 194,900$ 112,500Heat Fast Inc.Flexible BudgetCost Formula(per toaster)$0.00 $$$116,000Activity (toasters)126,0000 $0 $0 $0 $0 $0$136,0000.00چار4 Heat Fast Inc. (HFI) is a manuinstall a flexible budgeting syexpected costs for productioVariable costs:ManufacturingAdministrativeSellingFixed costs:ManufacturingAdministrativeVariable costs:ManufacturingAdministrativeSellingTotal variable costsRequired:Prepare a flexible budget for each of the three sales levels: 116,000, 126,000 and 136,000 units. Each toaster oven is expected to sellfor $22.40Fixed costsManufacturingAdministrativeof heating elements for toaster ovens. To improve control over operations, the president wants toather than the single master budget being used at present. The following data are available forrelevant range of production levels for fixed overhead costs is 80,000 to 180.000 unitsTotal fixed costsTotal costsIncome from operationsinitunitunit$194,900$ 112,500Heat Fast Inc.Flexible BudgetCost Formula(per toaster)$0.00 $$$116,000Activity (toasters)0 $0 $0 $126,0000 $0 $0$136,000000

The flexible budget is prepared by the company to determine the change in the variable costs and…

Heat Fast Inc. (HFI) is a manufacturer of heating elements for toaster ovens. To improve control over operations, the president wants to Install a flexible budgeting system, rather than the single master budget being used at present. The following data are available for expected costs for production. The relevant range of production levels for fixed overhead costs is 80,000 to 180,000 units: Variable costs: Manufacturing Administrative Selling Fixed costs: Manufacturing Administrative Variable costs Manufacturing Administrative Selling Required: Prepare a flexible budget for each of the three sales levels: 116,000, 126,000 and 136,000 units. Each toaster oven is expected to sell for $22.40. Total variable costs Fixed costs Manufacturing Administrative $9.60/unit $5.25/unit $4.25/unit Total fixed costs Total costs Income from operations $ 194,900 $ 112,500 Heat Fast Inc. Flexible Budget Cost Formula (per toaster) $ 0.00 $ $ $ 110,000 Activity (toasters) 120,000 0 $ 0 $ 0$ 0 $ 0 $ 0 $ 136,000 0 0 4 21

Heat Fast Inc. (HFI) is a manufacturer of heating elements for toaster ovens. To improve control over operations, the president wants to Install a flexible budgeting system, rather than the single master budget being used at present. The following data are available for expected costs for production. The relevant range of production levels for fixed overhead costs is 80,000 to 180,000 units: Variable costs: Manufacturing Administrative Selling Fixed costs: Manufacturing Administrative Variable costs Manufacturing Administrative Selling Required: Prepare a flexible budget for each of the three sales levels: 116,000, 126,000 and 136,000 units. Each toaster oven is expected to sell for $22.40. Total variable costs Fixed costs Manufacturing Administrative $9.60/unit $5.25/unit $4.25/unit Total fixed costs Total costs Income from operations $ 194,900 $ 112,500 Heat Fast Inc. Flexible Budget Cost Formula (per toaster) $ 0.00 $ $ $ 110,000 Activity (toasters) 120,000 0 $ 0 $ 0$ 0 $ 0 $ 0 $ 136,000 0 0 4 21

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter8: Budgeting For Planning And Control

Section: Chapter Questions

Problem 40P: The controller for Muir Companys Salem plant is analyzing overhead in order to determine appropriate...

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The management of Hartman Company is trying to determine the amount of each of two products to produce over the coming planning period. The following information concerns labor availability, labor utilization, and product profitability: a. Develop a linear programming model of the Hartman Company problem. Solve the model to determine the optimal production quantities of products 1 and 2. b. In computing the profit contribution per unit, management does not deduct labor costs because they are considered fixed for the upcoming planning period. However, suppose that overtime can be scheduled in some of the departments. Which departments would you recommend scheduling for overtime? How much would you be willing to pay per hour of overtime in each department? c. Suppose that 10, 6, and 8 hours of overtime may be scheduled in departments A, B, and C, respectively. The cost per hour of overtime is 18 in department A, 22.50 in department B, and 12 in department C. Formulate a linear programming model that can be used to determine the optimal production quantities if overtime is made available. What are the optimal production quantities, and what is the revised total contribution to profit? How much overtime do you recommend using in each department? What is the increase in the total contribution to profit if overtime is used?
Young Company is beginning operations and is considering three alternatives to allocate manufacturing overhead to individual units produced. Young can use a plantwide rate, departmental rates, or activity-based costing. Young will produce many types of products in its single plant, and not all products will be processed through all departments. In which one of the following independent situations would reported net income for the first year be the same regardless of which overhead allocation method had been selected? a. All production costs approach those costs that were budgeted. b. The sales mix does not vary from the mix that was budgeted. c. All manufacturing overhead is a fixed cost. d. All ending inventory balances are zero.
Adam Corporation manufactures computer tables and has the following budgeted indirect manufacturing cost information for the next year: If Adam uses the step-down (sequential) method, beginning with the Maintenance Department, to allocate support department costs to production departments, the total overhead (rounded to the nearest dollar) for the Machining Department to allocate to its products would be: a. 407,500. b. 422,750. c. 442,053. d. 445,000.
Firenza Company manufactures specialty tools to customer order. Budgeted overhead for the coming year is: Previously, Sanjay Bhatt, Firenza Companys controller, had applied overhead on the basis of machine hours. Expected machine hours for the coming year are 50,000. Sanjay has been reading about activity-based costing, and he wonders whether or not it might offer some advantages to his company. He decided that appropriate drivers for overhead activities are purchase orders for purchasing, number of setups for setup cost, engineering hours for engineering cost, and machine hours for other. Budgeted amounts for these drivers are 5,000 purchase orders, 500 setups, and 2,500 engineering hours. Sanjay has been asked to prepare bids for two jobs with the following information: The typical bid price includes a 40 percent markup over full manufacturing cost. Required: 1. Calculate a plantwide rate for Firenza Company based on machine hours. What is the bid price of each job using this rate? 2. Calculate activity rates for the four overhead activities. What is the bid price of each job using these rates? 3. Which bids are more accurate? Why?
The controller for Muir Companys Salem plant is analyzing overhead in order to determine appropriate drivers for use in flexible budgeting. She decided to concentrate on the past 12 months since that time period was one in which there was little important change in technology, product lines, and so on. Data on overhead costs, number of machine hours, number of setups, and number of purchase orders are in the following table. Required: 1. Calculate an overhead rate based on machine hours using the total overhead cost and total machine hours. (Round the overhead rate to the nearest cent and predicted overhead to the nearest dollar.) Use this rate to predict overhead for each of the 12 months. 2. Run a regression equation using only machine hours as the independent variable. Prepare a flexible budget for overhead for the 12 months using the results of this regression equation. (Round the intercept and x-coefficient to the nearest cent and predicted overhead to the nearest dollar.) Is this flexible budget better than the budget in Requirement 1? Why or why not?
Flexible Production Cost Budget %24 $ 9:23 PM e here to search 12/13/2021
The firm manufactures a product with the following costs: Direct materials→₱14.00; Direct labor→₱12.00; Variable manufacturing overhead→₱3.00; Fixed manufacturing overhead→₱1,500,000; Variable selling, general and administrative expenses→₱2.00; Fixed selling, general and administrative expenses→₱1,000,000. The company uses the absorption costing approach to cost-plus pricing. The pricing calculations are based on budgeted production and sales of 80,000 units per year. The company has invested ₱500,000 in this product and expects a return on investment of 25%. Tax rate is 25%. The selling price based on the absorption costing approach would be closest to: a. ₱50.46 b. ₱47.75 c. ₱83.08 d. ₱73.10 e. ₱64.33 f. ₱73.90
Flounder Possible Inc. (FP) is a manufacturer of toaster ovens. To improve control over operations, the president of FP wants to begin using a flexible budgeting system, rather than using only the current master budget. The following data are available for FP's expected costs at production levels of 81,000, 90,000, and 99,000 units. Variable costs Manufacturing $5 per unit Administrative $3 per unit Selling $3 per unit Fixed costs Manufacturing $144,000 Administrative $72,000
Landon is working on putting together the financials for his company's quarterly report. His company uses standard costs within its absorption costing system, and Landon needs to find the budgeted. cost per unit in order to estimate COGS. Landon has provided the following cost information. 2 3 41 15 16 17 18 Budgeted variable manufacturing cost per unit Budgeted variable operating cost per unit Budgeted fixed overhead costs Budgeted fixed operating costs Budgeted production in units $ D 5.00 3.00 30,000 20,000 5,000 E F G H functions with cell references to the Problem area or work area as indicated. How much cost should be capitalized to inventory for each unit produced? Cost per unit
The firm manufactures a product with the following costs: Direct materials→₱14.00; Direct labor→₱12.00; Variable manufacturing overhead→₱3.00; Fixed manufacturing overhead→₱1,500,000; Variable selling, general and administrative expenses→₱2.00; Fixed selling, general and administrative expenses→₱1,000,000. The company uses the absorption costing approach to cost-plus pricing. The pricing calculations are based on budgeted production and sales of 80,000 units per year. The company has invested ₱500,000 in this product and expects a return on investment of 25%. Tax rate is 25%.
The management of ?Nova Industries Inc. manufacturing gasoline and diesel engines through two production departments, Fabrication and Assembly. Management needs accurate product cost information in order to guide product strategy. Presently, the company uses a single plantwide factory overhead rate for allocating factory overhead to the two products. However, management is considering the multiple production department factory overhead rate method. The following factory overhead was budgeted for Nova: In addition, the direct labor hours (dlh) used to produce a unit of each product in each epartment were determined from engineering records, as follows: a. Determine the per unit factory overhead allocated to the gasoline and diesel enignes under the single plantwide factory overhead rate method, using direct labor hours as the activity base. b. Determine the per-unit factory overhead allocated to the gasoline and diesel engines under the multiple production department factory overhead…
The firm manufactures a product with the following costs: Direct materials→₱18.00; Direct labor→₱11.90; Variable manufacturing overhead→₱2.10; Fixed manufacturing overhead→₱1,422,000; Variable selling, general and administrative expenses→₱3.60; Fixed selling, general and administrative expenses→₱1,540,500. The company uses the absorption costing approach to cost-plus pricing. The pricing calculations are based on budgeted production and sales of 79,000 units per year. The company has invested ₱420,000 in this product and expects a return on investment of 15%. The selling price based on the absorption costing approach would be closest to: a. ₱108.04 b. ₱73.90 c. ₱47.29 d. ₱73.10