P1.1 (LO 2), AP Ohno Company specializes in manufacturing a unique model of bicycle helmet. The model is well accepted by consumers,and the company has enough orders to keep the factory production at 10,000 helmets per month (80% of its full capacity). Ohno's monthlymanufacturing costs and other expense data are as follows.Rent on factory equipmentInsurance on factory buildingRaw materials used (plastics, polystyrene, etc.)Utility costs for factorySupplies used for general officeWages for assembly-line workersDepreciation on office equipmentMiscellaneous materials used (glue, thread, etc.)Factory manager's salaryProperty taxes on factory buildingAdvertising for helmetsSales commissionsDepreciation on factory buildingCheck figures provide a key number to let you know you are on the right track.Instructionsa. Prepare an answer sheet with the following column headings.Product Costs$11,0001,50075,00090030058,0008001,1005,70040014,00010,0001,500 Miscellaneous materials used (grue, unread, etc.)Factory manager's salaryProperty taxes on factory buildingAdvertising for helmetsSales commissionsDepreciation on factory buildingCheck figures provide a key number to let you know you are on the right track.Instructionsa. Prepare an answer sheet with the following column headings.CostItema.DirectMaterialsProduct CostsDirectLaborManufacturingOverheadDM$75,000DL$58,000MO$22,100PC$25,100b. Compute the cost to produce one helmet.Classify manufacturing costs into different categories and compute the unit cost.1,1005,70040014,00010,0001,500Enter each cost item on your answer sheet, placing the dollar amount under the appropriate heading. Total the dollar amounts in eachof the columns.PeriodCosts

a. Prepare an answer sheet with the following column headings. Direct Direct Materials Labor a. DM DL Cost Item $75,000 $58,000 $22,100 $25,100 Product Costs Enter each cost item on your answer sheet, placing the dollar amount under the appropriate heading. Total the dollar amounts in each of the columns. Manufacturing Overhead Period Costs MO PC b. Compute the cost to produce one helmet. Classify manufacturing costs into different categories and compute the unit cost.

a. Prepare an answer sheet with the following column headings. Direct Direct Materials Labor a. DM DL Cost Item $75,000 $58,000 $22,100 $25,100 Product Costs Enter each cost item on your answer sheet, placing the dollar amount under the appropriate heading. Total the dollar amounts in each of the columns. Manufacturing Overhead Period Costs MO PC b. Compute the cost to produce one helmet. Classify manufacturing costs into different categories and compute the unit cost.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 4EB: Roper Furniture manufactures office furniture and tracks cost data across their process. The...

See similar textbooks

Similar questions

Bridgeport Racers makes bicycles. It has always purchased its bicycle tires from the Cullumber Tires at $26 each but is currently considering making the tires in its own factory. The estimated costs per unit of making the tires are as follows: Direct materials $9 Direct labor $5 Variable manufacturing overhead $8 The company’s fixed expenses would increase by $73,000 per year if managers decided to make the tire.(a1) Calculate total relevant cost to make or buy if the company needs 11,300 tires a year. Make Buy Total relevant cost $enter a dollar amount $enter a dollar amount (a2) Ignoring qualitative factors, if the company needs 11,300 tires a year, should it continue to purchase them from Balyo or begin to produce them internally? The company select an option should not continueshould continue to purchase the tires.
2.) A company currently buys a key part for a product it manufactures. The company buys the part for $5 per unit and believes it can make the part for $1.50 per unit for direct materials and $2.50 per unit for direct labor. The company allocates overhead costs at the rate of 50% of direct labor. Incremental overhead costs to make this part are $0.75 per unit. Should the company make or buy the part? Create a Total Cost per unit comparison for make or buy options.
Roadside Inc. manufactures the Megalite, and is reviewing the product's cost structure. Accounting records show these costs:factory space: $250,000 per yearinsurance: $47,000 per yearsupervisor salaries: $125,000 per yearmaterials: $5.00 per lampdirect labor: $2.69 per lamprecycling charge: $0.37 per lampRoadside Inc sells the Megalite to wholesalers for $13.69 each. Calculate Roadside's contribution margin as percent of selling price on the Megalite. (Rounding: tenth of a percent. Report 25.3%, for example, as "25.3".)
Your bike helmet company is expecting demand for an additional 4,000 helmets in the upcoming year. While you have the capacity to handle the additional demand, a potential supplier has offered to make the 4,000 helmets for $9 per helmet. Other information from the financial accounting system is listed below. Should you make or buy the helmets? Commuter bike helmet Direct material Direct labor Manufacturing overhead: variable Non-manufacturing overhead: variable Total variable cost Manufacturing overhead: fixed Non-manufacturing overhead: fixed Total fixed cost Total cost Commuter helmet price Machine hour $6.54 $1.89 $1.07 $0.86 $10.36 $1.78 $0.98 $2.76 $13.12 $16.00 0.57
Pina Colada Racers makes bicycles. It has always purchased its bicycle tires from the Ivanhoe Tires at $25 each but is currently considering making the tires in its own factory. The estimated costs per unit of making the tires are as follows: Direct materials Direct labor Variable manufacturing overhead Total relevant cost $8 $4 The company's fixed expenses would increase by $63,000 per year if managers decided to make the tire. (a1) Calculate total relevant cost to make or buy if the company needs 10,300 tires a year. Make $7 $ Buy
New Firm, Inc. is a manufacturer of various plastic items. The firm applies OH on the basis of machine hours. The rate for the year 2020 was $5.89 per machine hour. What does the rate mean? Why does the firm use a rate instead of simply computing OH per unit in the same way it computes direct materials and direct labour per unit?
8. Mazoon Company motorcycle helmets. the company has enough orders to keep the factory production at 1,000 motorcycle helmets per month. Mazoon's monthly manufacturing cost and other expense data are as follows. specializes in manufacturing Maintenance costs on factory building Factory manager's salary Advertising for helmets Sales commissions 500 3000 7000 2000 Depreciation on factory building Rent on factory equipment Insurance on factory building Raw materials (plastic, polystyrene, etc.) 19000 Utility costs for factory Supplies for general office Wages [or assembly line workers Depreciation on office equipment Miscellaneous materials (glue, thread, 1900 etc.) 600 5000 2000 700 100 43000 400 a) Prepare an answer with the following heading Enter each cost item on your answer sheet totalling the amount in each column. b) Compute the cost to produce 1 helmet Product Costs Cost Item Direct Material Direct Labor Manuf. Overhead Period Cost
Product A is produced with the following costs: 1) Paper material P20 per unit 2) Plastic P15 per unit 3) Rubber P27000 per 12000 units. 4) Labor P4 per unit 5) Indirect material costs P2.5 per unit The company pays P60,000 for rent per month for factory. It depreciates a P300,000 vehicle used for delivery and a P210,000-machine used for manufacturing, both have a life of 5 years. a. How much should be the total overhead costs if in a month, 1000 units were produced? b. How much should be the direct material costs if in a month, 1,500 units were produced? c. How much is the total conversion cost if 3,000 units are produced? d.How much is the total product cost per unit if in a month of production 4,750 units were produced? e. How many units should be sold in a month to break even?
Required information [The following information applies to the questions displayed below.] Morning Dove Company manufactures one model of birdbath, which is very popular. Morning Dove sells all units it produces each month. The relevant range is 0 to 1,500 units, and monthly production costs for the production of 500 units follow. Morning Dove's utilities and maintenance costs are mixed with the fixed components shown in parentheses. Production Costs Direct materials Direct labor Utilities ($100 fixed) Supervisor's salary Maintenance ($280 fixed) Depreciation Total Cost $ 1,500 7,500 650 3,000 480 800 Required: 1. Identify each cost as variable, fixed, or mixed, and express each cost as a rate per month or per unit (or combination thereof). 2. Determine the total fixed cost per month and the variable cost per unit for Morning Dove. 3. State Morning Dove's linear cost equation for a production level of 0 to 1,500 units. Enter answer as an equation in the form of y= a + bx. 4. Calculate…
Please explain the step so I can understand. Gobblecakes is a bakery that specializes in cupcakes. The annual fixed cost to make cupcakes is $18,000. The variable cost including ingredients and labor to make a cupcake is $0.90. The bakery sells cupcakes for $3.20 apiece. (a). If the bakery sells 12,000 cupcakes annually, determine the total cost, total revenue, and profit. (b). How many cupcakes will the bakery need to sell in order to break even?
Reubens Deli currently makes rolls for deli sandwiches it produces. It uses 30,000 rolls annually in the production of deli sandwiches. The costs to make the rolls are: A potential supplier has offered to sell Reuben the rolls for $0.90 each. If the rolls are purchased, 30% of the fixed overhead could be avoided, If Reuben accepts the offer, what will the effect on profit be?
Roper Furniture manufactures office furniture and tracks cost data across their process. The following are some of the costs that they incur. Classify these costs as fixed or variable costs, and as product costs or period costs. Wood used to produce desks ($125,00 per desk) Production labor used to produce desks ($15 per hour) Production supervisor salary ($45,000 per year) Depreciation on factory equipment ($60,000 per year) Selling and administrative expenses ($45,000 per year) Rent on corporate office ($44,000 per year) Nails, glue, and other materials required to produce desks (varies per desk) Utilities expenses for production facility Sales staff commission (5% of gross sales)