Kirby Fasteners supplies the electronics industry with accessories for cases, disc enclosures, and so on. Below are the costs and volumes for the past six months at its Plant number 6: Kirby Fasteners Plant Number 6 January to June Results Volume (Units) 11,700 10,640 13,970 14,500 12,500 12,280 Total Cost $ 202,900 193,795 228,400 241,080 220,555 217,212 Required: a. Use the high-low method to estimate the monthly fixed cost of production and the variable cost of production per unit.

Kirby Fasteners supplies the electronics industry with accessories for cases, disc enclosures, and so on. Below are the costs and volumes for the past six months at its Plant number 6: Kirby Fasteners Plant Number 6 January to June Results Volume (Units) 11,700 10,640 13,970 14,500 12,500 12,280 Total Cost $ 202,900 193,795 228,400 241,080 220,555 217,212 Required: a. Use the high-low method to estimate the monthly fixed cost of production and the variable cost of production per unit.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints

Section: Chapter Questions

Problem 13E: Eyring Manufacturing produces a component used in its production of washing machines. The time to...

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Kirby Fasteners supplies the electronics industry with accessories for cases, disc enclosures, and so on. Below are the costs and volumes for the past six months at its Plant number 6: Kirby Fasteners Plant Number 6 January to June Results Volume (Units) Total Cost 10,400 $ 189,990 9,340 180,795 12,670 215,400 13,200 228,080 11,200 207,555 10,980 204,212 Required: Use the high-low method to estimate the monthly fixed cost of production and the variable cost of production per unit. Kirby analysts forecast a production level of 11,400 units in July. Based on the results from requirement (a), what would be the estimated production costs in July?
Kirby Fasteners supplies the electronics Industry with accessories for cases, disc enclosures, and so on. Below are the costs and volumes for the past six months at its Plant number 6: Kirby Fasteners Plant Number 6 January to June Results Total Cost $ 198,900 189,795 224,400 237,880 216,555 213,212 Volume (Units) 11,300 10,240 13,570 14,100 12,180 11,880 Required: a. Use the high-low method to estimate the monthly fixed cost of production and the variable cost of production per unit. b. Kirby analysts forecast a production level of 12,300 units in July. Based on the results from requirement (a), what would be the estimated production costs in July? Complete this question by entering your answers in the tabs below. Required A Required B Use the high-low method to estimate the monthly fixed cost of production and the variable cost of production per unit. Note: Round "Variable cost" answer to 2 decimal places. Variable cost Fixed cost
Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below: Standard Quantity or Hours Standard Cost Direct materials Standard Price or Rate $ 3.00 per pound $14.00 per hour 7.00 pounds 0.40 hours Direct labor $ 21.00 $5.60 During the most recent month, the following activity was recorded: Book a. Thirteen thousand six hundred pounds of material were purchased at a cost of $2.90 per pound. F b. The company produced only 1,360 units, using 12,240 pounds of material. (The rest of the material purchased remained in raw materials inventory.) Print c. 644 hours of direct labor time were recorded at a total labor cost of $7,728. 0 Required: References Compute the materials price and quantity variances for the month. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not…
Zippy Inc. manufactures a fuel additive, Surge, which has a stable selling price of 44 per drum. The company has been producing and selling 80,000 drums per month. In connection with your examination of Zippys financial statements for the year ended September 30, management has asked you to review some computations made by Zippys cost accountant. Your working papers disclose the following about the companys operations: Standard costs per drum of product manufactured: Materials: Costs and expenses during September: Chemicals: 645,000 gallons purchased at a cost of 1,140,000; 600,000 gallons used. Empty drums: 94,000 purchased at a cost of 94,000; 80,000 drums used. Direct labor: 81,000 hours worked at a cost of 816,480. Factory overhead: 768,000. Required: Calculate the following for September, using the formulas on pages 421422 and 424 (Round unit costs to the nearest whole cent and compute the materials variances for both Surge and for the drums.): 1. Materials quantity variance. 2. Materials purchase price variance. 3. Labor efficiency variance. 4. Labor rate variance.
Dura-Conduit Corporation manufactures plastic conduit that is used in the cable industry. A conduit is a tube that encircles and protects the underground cable. In the process for making the plastic conduit, called extrusion, the melted plastic (resin) is pressed through a die to form a tube. Scrap is produced in this process. Information from the cost of production reports for three months is as follows, assuming that inventory remains constant: Assume that there is one-half pound of resin per foot of the finished product. a. Determine the resin materials cost per foot of finished product for each month. Round to the nearest whole cent. b. Determine the ratio of the number of resin pounds output in conduit by the number of pounds input into the process for each month. Round percentages to one decimal place. c. Interpret the resin materials cost per foot for the three months. Use the information in (a) and (b) to explain what is happening. d. Determine the conversion cost per foot of finished product for each month and interpret the result.
RDI Products Co. manufactures a variety of products made of plastic and aluminum components. During the winter months, substantially all of the production capacity is devoted to the production of lawn sprinklers for the following spring and summer seasons. Other products are manufactured during the remainder of the year. The company has developed standard costs for its several products. Standard costs for each year are set in the preceding October. The standard cost of a sprinkler for the current year is $3.70, computed as follows: During February, RDI Products manufactured 8,500 good sprinklers. The company incurred the following costs, which it charged to production: Materials price variations are not determined by usage but are charged to a materials price variation account at the time of purchase. All materials are carried in inventory at standard prices. Materials purchases for February were as follows: *Due to plastic shortages, the company was forced to purchase lower-grade plastic than called for in the standards. This increased the number of sprinklers rejected on inspection. Required: Calculate price and usage variances for each type of material and for labor, using the formulas on pages 421–422 and 424.
Eyring Manufacturing produces a component used in its production of washing machines. The time to set up and produce a batch of the components is two days. The average daily usage is 800 components, and the maximum daily usage is 875 components. Required: Compute the reorder point assuming that safety stock is carried by Eyring Manufacturing. How much safety stock is carried by Eyring?
Brody Company makes industrial cleaning solvents. Various chemicals, detergent, and water are mixed together and then bottled in 10-gallon drums. Brody provided the following information for last year: Last year, Brody completed 100,000 units. Sales revenue equaled 1,200,000, and Brody paid a sales commission of 5 percent of sales. Required: 1. Calculate the direct materials used in production for last year. 2. Calculate total prime cost. 3. Calculate total conversion cost. 4. Prepare a cost of goods manufactured statement for last year. Calculate the unit product cost. 5. Prepare a cost of goods sold statement for last year. 6. Prepare an income statement for last year. Show the percentage of sales that each line item represents.
Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below: Standard Quantity or Hours Standard Price or Rate Standard Cost $ 3.00 per pound $ 11.00 per hour $ 20.40 $ 5.50 Direct materials 6.80 pounds Direct labor 0.50 hours During the most recent month, the following activity was recorded: a. Twenty two thousand nine hundred pounds of material were purchased at a cost of $2.70 per pound. b. All of the material purchased was used to produce 3,000 units of Zoom. c. 1,400 hours of direct labor time were recorded at a total labor cost of $18,200. Required: 1. Compute the materials price and quantity variances for the month. 2. Compute the labor rate and efficiency variances for the month. (For all requirements, Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Round your…
Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below: Direct materials Direct labor Standard Quantity or Hours Standard Price or Rate 6.90 pounds $ 2.60 per pound 0.30 hours $ 7.00 per hour Standard Cost $ 17.94 $ 2.10 During the most recent month, the following activity was recorded: a. Nineteen thousand two hundred and fifity pounds of material were purchased at a cost of $2.40 per pound. b. All of the material purchased was used to produce 2,500 units of Zoom. c. 450 hours of direct labor time were recorded at a total labor cost of $4,500. Required: 1. Compute the materials price and quantity variances for the month. 2. Compute the labor rate and efficiency variances for the month. (For all requirements, Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Round…
Practice: Laughton Corporation makes two styles of cases for compact disks, the standard case and the deluxe case. The company has assigned $210,000 in monthly manufacturing overhead to three cost pools as follows: $90,000 to machining costs, $60,000 to production set-up costs, and $60,000 to inspection costs. Additional monthly data are provided below: Standard Deluxe Case Case Sales revenue $480,000 $189,000 Direct materials $135,000 $45,000 Direct labor $105,000 $30,000 Machine hours 24,000 6,000 Production runs 7 12 Units produced and sold 33,000 3,000 The first and last unit in each production run is inspected for quality control purposes. Inspection costs are allocated to the products based on the number of inspections required. Machining costs are allocated to products using machine hours as an activity base. Set-up costs are allocated to products based on the number of production runs…
Coverall Inc. produces and sells a unique type of case for a standard-size tablet computer that is guaranteed waterproof but still allows for regular functionality of the tablet. The company has just opened a new plant to manufacture these cases, and the following cost and revenue data have been provided for the first month of the plant’s operation in the form of a worksheet: Beginning inventory $ 0 Units produced 38,000 Units sold 24,000 Selling price per unit $ 95 Selling and administrative expenses: Variable per unit $ 11 Fixed (total) $ 672,000 Manufacturing costs: Direct materials cost per unit $ 16 Direct labour cost per unit $ 12 Variable manufacturing overhead cost per unit $ 6 Fixed manufacturing overhead cost (total) $ 1,064,000 Since the new case is unique in design, management is anxious to see how profitable it will be and has asked that an income statement be prepared for the…