Mighty Muffler, Inc., operates an automobile service facility that specializes in replacing mufflers on compact cars. The following tableshows the costs incurred during a month when 600 mufflers were replaced.Required:Fill in the missing amounts.Muffler Replacements500600700Total costs:Fixed costs2$42,000Variable costs30,000Total costs$72,000Cost per muffler replacement:Fixed costVariable costTotal cost per muffler replacement

Flexible budgeting is an assessment tool used by the company to know the expected cost to be…

Answered: Mighty Muffler, Ic., operates an…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Saved Mighty Muffler, Inc., operates an automobile service facility that specializes in replacing mufflers on compact cars. The following table shows the costs incurred during a month when 500 mufflers were replaced. (Round "cost per muffler" to 2 decimal places.) Required: Fill in the missing amounts. Muffler Replacements 400 500 600 Total costs: Fixed costs 2$ 44,000 Variable costs 24,000 Total costs 2$ 68,000 Cost per muffler replacement: Fixed cost Variable cost Total cost per muffler replacement Next > 8 of 9 < Prev 出

Mo Furniture manufactures a frame for use in its production of sofas. When 10,000 frames are produced, the costs per unit are: Direct materials $ 12 Direct manufacturing labor 60 Variable manufacturing overhead 24 Fixed manufacturing overhead 32 Total $128 A company has offered to sell Mo Furniture 10,000 sofa frames for $120 per unit. Fixed manufacturing overhead of $20 per unit used to make the frame could be eliminated if the frames were purchased instead of made. What is the relevant cost per unit to make the frame in this make or buy decision?
Mighty Muffler, Inc. operates an automobile service facility that specializes in replacing mufflers on compact cars. The following table shows the costs incurred during a month when 600 mufflers were replaced. Required: Fill in the missing amounts, labeled (a) through (o), in the table.
Pelicans Ice is a snow cone stand near the local park. To plan for the future, it wants to determine its cost behavior patterns. It has the following information available about its operating costs and the number of snow cones served. Month Number of snow cones Total operating costs January 6,400 $5,980 February 7,000 $6,400 March 4000 $5000 April 6,900 $6,330 May 8000 $9000 June 7,250 $6,575 Using the high-low method, the monthly operating costs if Pelicans sells 12,000 snow cones in a month are $1000 $13,000 $12,000 $20,000
Mobility Partners makes wheelchairs and other assistive devices. For years it has made the rear wheel assembly for its wheelchairs. A local bicycle manufacturing firm, Trailblazers, Inc., offered to sell these rear wheel assemblies to Mobility. If Mobility makes the assembly, its cost per rear wheel assembly is as follows (based on annual production of 1,800 units): Direct materials Direct labor Variable overhead Fixed overhead Total Trailblazers' offer Materials $28 110 Total costs 19 Trailblazers has offered to sell the assembly to Mobility for $164 each. The total order would amount to 1,800 rear wheel assemblies per year, which Mobility's management will buy instead of make if Mobility can save at least $20,000 per year. Accepting Trailblazers's offer would eliminate annual fixed overhead of $35,550. Required: a. Prepare a schedule that shows the total differential costs. (Select option "higher" or "lower", keeping Status Quo as the base. Select "none" if there is no effect.) 38…
A company is considering buying a part that they currently make for one of their products. The costs of producing the 8,900 units of the part that are needed every year are as follows. Direct materials Direct labor Variable overhead Supervisor's salary Depreciation of special equipment Allocated general overhead Per Unit $8.20 $ 4.60 $9.10 $ 3.40 $ 2.98 $ 1.60 An outside supplier has offered to make the part and sell it to the company for $28.00 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company. If the outside supplier's offer were accepted, only $4,100 of these allocated general overhead costs would be avoided. In addition, the space used to produce the part could be used to make more of one of the company's other products,…
PROBLEM. Please show your computations to receive full credit. Mariposa Manufacturing builds custom wooden cabinets. Mariposa Manufacturing has reported the following costs for the previous year. Assume no production inventories. Advertising $70,500 $34,000 $117,800 $63,000 $17,500 $76,000 $3,800 $40,700 $41,600 $22,900 $31,800 Cost of hardware (sides, handles, etc.) Cost of Wood Depreciation on Production Equipment Factory Property Taxes Factory Rent Glue Production Supervisor Salary Sales Manager Salary Utilities for Factory Wages for Maintenance Workers Wages of Assembly Workers Wages of Finishing Workers $91,400 $77,800 Compute the following: i. Direct material costs ii. Direct labor cost iii. Manufacturing overhead iv. Total manufacturing cost v. Prime cost vi. Conversion cost vii. Total period cost Edit Format Table 12pt v Paragraph B IU A
Reinhart Corporation makes bicycles. For many years, Reinhart has made the rear wheel assembly for its bicycles. Recently, Bennett Company offered to sell these rear wheel assemblies to Reinhart. If Reinhart makes the assembly, its cost per rear wheel assembly is as follows: Direct materials $10.00 Direct labor 18.00 Variable manufacturing overhead 10.00 Fixed manufacturing overhead, avoidable 8.00 Fixed manufacturing overhead, unavoidable (allocated on the basis of labor-hours) 10.00 Unit product cost $56.00 These…
Scootz could sell its scooters to retailers either assembled or unassembled. The cost of an unassembled scooters is as follows. Direct materials $150 Direct labor 70 Variable overhead (0.70 of direct labor) 49 Fixed overhead (0.30 of direct labor) 21 Manufacturing cost per unit $290 The unassembled scooters are sold to retailers at $450 each. Scootz currently has unused productive capacity that is expected to continue indefinitely; management has concluded that some of this capacity can be used to assemble the scooters and sell them at $495 each. Assembling the scooters will increase direct materials by $5 per scooter, and direct labor by $10 per scooter. Additional variable overhead will be incurred at the normal rates, but there will be no additional fixed overhead as a result of assembling the scooters. You are required to: (a) Prepare an incremental analysis for the sell-or-process-further decision. (b) Should Speedy sell unassembled or process further?
Willis Company is trying to decide which of two bicycle wheels to manufacture next quarter. Cost data pertaining to the two choices follow. Multiple Choice Cost of materials per unit Cost of direct labor per unit Advertising cost per year 4,000 Depreciation on equipment 6,000 Which costs are relevant to the decision of which wheel to produce? Cost of materials and direct labor Wheel A $25 30 Cost of direct labor, advertising, and depreciation Cost of materials, direct labor and advertising Cost of advertising and depreciation Wheel XZ $45 35 7,000 9,000
Zion Manufacturing had always made its components in-house. However, Bryce Component Works had recently offered to supply one component, K2, at a price of $25 each. Zion uses 10 000 units of Component K2 each year. The cost per unit of this component is as follows: 1 Direct materials Direct labour Variable overhead Fixed overhead Total Refer to the information for Zion Manufacturing. The fixed overhead is an allocated expense; none of it would be eliminated if production of Component K2 stopped. Required: 2 3 $12.00 8.25 4.50 2.00 $26.75 What are the alternatives facing Zion Manufacturing with respect to production of Component K2? List the relevant costs for each alternative. If Zion decides to purchase the component from Bryce, by how much will operating income increase or decrease? Which alternative is better?
Witt Recreation Company (WRC) makes e-bikes. The company currently manufactures two models, the Coaster and the Traveler, in one of the WRC factories. Both models require the same assembling operations. The difference between the models is the cost of materials. The following data are available for the second quarter. Coaster Traveler Total Number of bikes assembled 750 450 1,200 Materials cost per bike $ 625 $ 1,201 Other costs: Direct labor $ 298,200 Depreciation and lease 381,200 Supervision and control 246,200 Factory administration 339,200 Required: Witt Recreation Company uses operations costing and assigns conversion costs based on the number of units assembled. Compute the cost of each model assembled in the second quarter.

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