Financial Planning, Performan Plasto Incorporated manufactures and sells arboxal, a chemical used in the manufacture of plastic. To produce arboxal, Plasto uses three direct materials arcol, bonal and oxal Because of evaporation during a chemical reaction in the production of arboxal, Plasto expects a standard yield of 90%. That is, every 10 gallons of arcol, bonal, and oxal yields 9 gallons of arboxal. The standard mix of direct materials is 60% of arcol, 20% of bonal, and 20% of oxal Plasto set the following direct material standards for the production of arboxal 6 gallons of arcol at $1.00/gallon 2 gallons of bonal at $1.00/gallon $6.00 2.00 2 gallons of oxal at $.50/gallon 1.00 gallons of input yielding 9 gallons of 10 $9.00 Farboxal Plasto produced 45,000 gallons of arboxal using the following quantities and costs. 26,000 gallons of arcol at $1.05/gallon 13,000 gallons of bonal at $.85/gallon 13.000 gallons of oxal at $.40/gallon 52.000 gallons at the total cost of $27,300 11,050 5.200 $43.550 Plasto carries direct material inventories at actual prices. What is the total material price variance for arboxal?

Financial Planning, Performan Plasto Incorporated manufactures and sells arboxal, a chemical used in the manufacture of plastic. To produce arboxal, Plasto uses three direct materials arcol, bonal and oxal Because of evaporation during a chemical reaction in the production of arboxal, Plasto expects a standard yield of 90%. That is, every 10 gallons of arcol, bonal, and oxal yields 9 gallons of arboxal. The standard mix of direct materials is 60% of arcol, 20% of bonal, and 20% of oxal Plasto set the following direct material standards for the production of arboxal 6 gallons of arcol at $1.00/gallon 2 gallons of bonal at $1.00/gallon $6.00 2.00 2 gallons of oxal at $.50/gallon 1.00 gallons of input yielding 9 gallons of 10 $9.00 Farboxal Plasto produced 45,000 gallons of arboxal using the following quantities and costs. 26,000 gallons of arcol at $1.05/gallon 13,000 gallons of bonal at $.85/gallon 13.000 gallons of oxal at $.40/gallon 52.000 gallons at the total cost of $27,300 11,050 5.200 $43.550 Plasto carries direct material inventories at actual prices. What is the total material price variance for arboxal?

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 25P: Taylor Company produces two industrial cleansers that use the same liquid chemical input: Pocolimpio...

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COLORADO INC. is a chemical manufacturer that supplies various products to industrial users. The company plans to introduce a new chemical solution, called Nysap, for which it needs to develop a standard product cost. The following information is available on the production of Nysap: Nysap is made by combining a chemical compound (nyclyn) and a solution (salex), and boiling the mixture. A 20% loss in volume occurs for both the salex and the nyclyn during boiling. After boiling, the mixture consists of 9.6 liters of salex and 12 kilograms of nyclyn per 10-liter batch of Nysap. After the boiling process is complete, the solution is cooled slightly before 5 kilograms of protet are added per 10-liter batch of Nysap. The addition of the protet does not affect the total liquid volume. The resulting solution is then bottled in 10-liter containers. The finished product is highly unstable, and one10-liter batch out of six is rejected at final inspection. Rejected batches have no commercial…
Taylor Company produces two industrial cleansers that use the same liquid chemical input: Pocolimpio and Maslimpio. Pocolimpio uses two quarts of the chemical for every unit produced, and Maslimpio uses five quarts. Currently, Taylor has 6,000 quarts of the material in inventory. All of the material is imported. For the coming year, Taylor plans to import 6,000 quarts to produce 1,000 units of Pocolimpio and 2,000 units of Maslimpio. The detail of each products unit contribution margin is as follows: Taylor Company has received word that the source of the material has been shut down by embargo. Consequently, the company will not be able to import the 6,000 quarts it planned to use in the coming years production. There is no other source of the material. Required: 1. Compute the total contribution margin that the company would earn if it could import the 6,000 quarts of the material. 2. Determine the optimal usage of the companys inventory of 6,000 quarts of the material. Compute the total contribution margin for the product mix that you recommend. 3. Assume that Pocolimpio uses three direct labor hours for every unit produced and that Maslimpio uses two hours. A total of 6,000 direct labor hours is available for the coming year. a. Formulate the linear programming problem faced by Taylor Company. To do so, you must derive mathematical expressions for the objective function and for the materials and labor constraints. b. Solve the linear programming problem using the graphical approach. c. Compute the total contribution margin produced by the optimal mix.
Carina Company produces sanitation products after processing specialized chemicals; The following relates to its activities: 1 Kilogram of chemicals purchased for $2000 and with an additional $1000 is processed into 400 grams of Crystals and 80 litres of a Cleaning agent. At split-off, agram of Crystal can be sold for $1 and the Cleaning agent can be sold for $4 per litre. At an additional cost of $400, Carina can process the 400 grams of Crystal into 500 grams of Detergent that can be sold for $2 per gram. The 80 litres of Cleaning agent is packaged at an additional cost of $300 and made into 200 packs of Softener that can be sold for $2 per pack. Required:1. Allocate the joint cost to the Detergent and the Softener using the following: a. Sales value at split-off method b. NRV method 2. Should Carina have processed each of the products further? What effect does the allocation method have on this decision? Answer Quickly
Carina Company produces sanitation products after processing specialized chemicals; The following relates to its activities: 1 Kilogram of chemicals purchased for $2000 and with an additional $1000 is processed into 400 grams of Crystals and 80 litres of a Cleaning agent. At split-off, agram of Crystal can be sold for $1 and the Cleaning agent can be sold for $4 per litre. At an additional cost of $400, Carina can process the 400 grams of Crystal into 500 grams of Detergent that can be sold for $2 per gram. The 80 litres of Cleaning agent is packaged at an additional cost of $300 and made into 200 packs of Softener that can be sold for $2 per pack. Required:1. Allocate the joint cost to the Detergent and the Softener using the following: a. Sales value at split-off method b. NRV method 2. Should Carina have processed each of the products further? What effect does the allocation method have on this decision?
Caribu Company produces sanitation products after processing specialized chemicals; The following relates to its activities: 1 Kilogram of chemicals purchased for $2000 and with an additional $1000 is processed into 400 grams of Crystals and 80 litres of a Cleaning agent. At split-off, a gram of Crystal can be sold for $1 and the Cleaning agent can be sold for $4 per litre. At an additional cost of $400, Caribu can process the 400 grams of Crystal into 500 grams of Detergent that can be sold for $2 per gram. The 80 litres of Cleaning agent is packaged at an additional cost of $300 and made into 200 packs of Softener that can be sold for $2 per pack. Required: Allocate the joint cost to the Detergent and the Softener using the following: a. Sales value at split-off method b. NRV method
Gunston Processing produces two products, ALT-1 and ALT-2, from a batch using a single raw material, ALT-O. Both products require further processing before they be can be sold. A batch of ALT-1 can be sold for $153,000 after processing costs of $42,000. A batch of ALT-2 can be sold for $241,200 after further processing. The cost of ALT-O is $200,000 for a batch. Using the estimated net realizable value method, a joint cost of $120,000 was allocated to ALT-2 for a batch. Required: Compute the separable processing cost for a batch of ALT-2. Note: Do not round intermediate calculations. Processing cost
Energy Products Company produces a gasoline additive, Gas Gain. This product increases engine efficiency and improves gasoline mileage by creating a more complete burn in the combustion process.Careful controls are required during the production process to ensure that the proper mix of input chemicals is achieved and that evaporation is controlled. If the controls are not effective, there can be a loss of output and efficiency.The standard cost of producing a 500-liter batch of Gas Gain is $135. The standard direct materials mix and related standard cost of each chemical used in a 500-liter batch are as follows: The quantities of chemicals purchased and used during the current production period are shown in the following schedule. A total of 140 batches of Gas Gain were manufactured during the current production period. Energy Products determines its cost and chemical usage variations at the end of each production period. Required:Compute the total direct materials usage variance, and…
Caribu Company produces sanitation products after processing specialized chemicals; The following relates to its activities: 1 Kilogram of chemicals purchased for $2000 and with an additional $1000 is processed into 400 grams of Crystals and 80 litres of a Cleaning agent. At split-off, agram of Crystal can be sold for $1 and the Cleaning agent can be sold for $4 per litre. At an additional cost of $400, Caribu can process the 400 grams of Crystal into 500 grams of Detergent that can be sold for $2 per gram. The 80 litres of Cleaning agent is packaged at an additional cost of $300 and made into 200 packs of Softener that can be sold for $2 per pack. 1. Allocate the joint cost to the Detergent and the Softener using the following: a. Sales value at split-off method b. NRV method ] 2. Should Caribu have processed each of the products further? What effect does the allocation method have on this decision?
Gunston Processing produces two products, ALT-1 and ALT-2, from a batch using a single raw material, ALT-O. Both products require further processing before they be can be sold. A batch of ALT-1 can be sold for $150,000 after processing costs of $30,000. A batch of ALT-2 can be sold for $240,000 after further processing. The cost of ALT-0 is $200,000 for a batch. Using the estimated net realizable value method, a joint cost of $120,000 was allocated to ALT-2 for a batch. Required: Compute the separable processing cost for a batch of ALT-2. Processing cost hs
Carina Company produces sanitation products after processing specialized chemicals; Thefollowing relates to its activities: 1 Kilogram of chemicals purchased for $2000 and with an additional $1000 isprocessed into 400 grams of Crystals and 80 litres of a Cleaning agent. At split-off, agram of Crystal can be sold for $1 and the Cleaning agent can be sold for $4 per litre. At an additional cost of $400, Carina can process the 400 grams of Crystal into 500 grams of Detergent that can be sold for $2 per gram. The 80 litres of Cleaning agent is packaged at an additional cost of $300 and made into 200 packs of Softener that can be sold for $2 per pack. Required: 1. Allocate the joint cost to the Detergent and the Softener using the following: a. Sales value at split-off method b. NRV method 2. Should Carina have processed each of the products further? What effect does the allocationmethod have on this decision? Make full references to Question 1 when possible
Caribu Company produces sanitation products after processing specialized chemicals; Thefollowing relates to its activities:  1 Kilogram of chemicals purchased for $2000 and with an additional $1000 isprocessed into 400 grams of Crystals and 80 litres of a Cleaning agent. At split-off, agram of Crystal can be sold for $1 and the Cleaning agent can be sold for $4 per litre.  At an additional cost of $400, Caribu can process the 400 grams of Crystal into 500grams of Detergent that can be sold for $2 per gram. The 80 litres of Cleaning agent ispackaged at an additional cost of $300 and made into 200 packs of Softener that canbe sold for $2 per pack. Required:1. Allocate the joint cost to the Detergent and the Softener using the following:a. Sales value at split-off methodb. NRV method 2. Should Caribu have processed each of the products further? What effect does the allocation method have on this decision?
Noble Chemical has spent $240,000 to refine 71,000 gallons of acetone, which can be sold for $2.30 a gallon. Alternatively, Noble Chemical can process the acetone further. This processing will yield a total of 59,000 gallons of lacquer thinner that can be sold for $3.20 a gallon. The additional processing will cost $0.85 per gallon of lacquer thinner. To sell the lacquer thinner, Noble Chemical must pay shipping of $0.24 a gallon and administrative expenses of $0.12 a gallon on the thinner. Requirements: 1. Identify the sunk cost. Is the sunk cost relevant to Noble's decision? Why or why not? 2. Should Noblesell the acetone as is or process it into lacquer thinner? Show the expected net revenue difference between the two alternatives.