QS 23-9 (Algo) Scrap or rework LO P2 Garcia Company has 10,600 units of its product that were produced at a cost of $159,000. The units were damaged in a rainstorm Garcia can sell the units as scrap for $31,800, or it can rework the units at a cost of $50,400 and then sell them for $66,300 (a) Prepare a scrap or rework analysis of income effects (b) Should Garcia sell the units as scrap or rework them and then sell them? (a) Scrap or Rework Analysis Revenue from scrapped/reworked units Cost of reworked units Income Incremental income (b) The company should $ Scrap 0$ Rework 0

QS 23-9 (Algo) Scrap or rework LO P2 Garcia Company has 10,600 units of its product that were produced at a cost of $159,000. The units were damaged in a rainstorm Garcia can sell the units as scrap for $31,800, or it can rework the units at a cost of $50,400 and then sell them for $66,300 (a) Prepare a scrap or rework analysis of income effects (b) Should Garcia sell the units as scrap or rework them and then sell them? (a) Scrap or Rework Analysis Revenue from scrapped/reworked units Cost of reworked units Income Incremental income (b) The company should $ Scrap 0$ Rework 0

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter17: Activity Resource Usage Model And Tactical Decision Making

Section: Chapter Questions

Problem 19E: Walloon Company produced 150 defective units last month at a unit manufacturing cost of 30. The...

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Excercise 3.19 Walloon Company produced 150 defective units last month at a unit manufacturing cost of $30. Thedefective units were discovered before leaving the plant. Walloon can sell them "as is" for $20 or canrework them at a cost of $15 and sell them at the regular price of $50. What is the total relevant cost ofreworking the defective units? a. $2,250 b. $3,000 c. $4,500 d. $6,750
V. P V MI * 00 44 Euclid Corporation processes a patented chemical, P-1, and produces two outputs, P-11 and P-12. In August, the costs to process P-1 are $190,000 for materials and $340,000 for conversion costs. P 11 has a sales value of $664,000 and P-12 has a sales value of $166,000. Required: Using the net realizable value method, assign costs to P-11 and P-12 for August. (Do not round intermediate calculations.) Cost Assigned SƏ P-11, P-12 < Prev 3 of 4 pe here to search 五 PrtSc F11 F12 +D -3 F10 sus 因 F7 F8 F5 反 & %23 8. 6. 5. 9. H. B. Alt Alt
d. P34.00 ABC Company produces a part that has the following costs per unit: Direct material Direct labo Variable overhead P 8 3 1 Fixed overhead Zest Corporation can provide the part to ABC for P19 per unit. ABC Company has determined that 60 percent of its fixed overhead would continue if it purchased the part. However, if ABC no longer produces the part, it can rent that portion of the plant facilities for P60,000 per year. ABC Company currently produces 10,000 parts per year. 17) Which alternative is preferable and by what margin? а. a. Make-P20,000 c. Buy-P10,000 b. Make-P50,000 d. Buy-P40,000 000 units in inventory that had a production
Clark Kent Inc. buys crypton for $.80 a gallon. At the end of processing in Dept. 1, crypton splits off into products plutonium, tantalum, and xenon. Plutonium is sold at the split-off point with no further processing. Tantalum and xenon require further processing before they can be sold. Tantalum is processed in Dept. 2, and xenon is processed in Dept. 3. Following is a summary of costs and other related data for the year ended December 31: No inventories were on hand at the beginning of the year, and no crypton was on hand at the end of the year. All gallons on hand at the end of the year were complete as to processing. Kent uses the net realizable value method of allocating joint costs. Required: Calculate the allocation of joint costs. Calculate the total cost per unit for each product. In examining the product cost reports, Lois Lane, Vice President—Marketing, notes that the per-unit cost of tantalum is greater than the selling price of $2.75 that can be received in the competitive marketplace. Lane wonders whether they should stop selling tantalum. How did Lane determine that the product was being sold at a loss? What per unit cost should be used in determining whether tantalum should be sold?
Walloon Company produced 150 defective units last month at a unit manufacturing cost of 30. The defective units were discovered before leaving the plant. Walloon can sell them as is for 20 or can rework them at a cost of 15 and sell them at the regular price of 50. What is the total relevant cost of reworking the defective units? a. 2,250 b. 3,000 c. 4,500 d. 6,750
Pasha Company produced 50 defective units last month at a unit manufacturing cost of 30. The defective units were discovered before leaving the plant. Pasha can sell them as is for 20 or can rework them at a cost of 15 and sell them at the regular price of 50. Which of the following is not relevant to the sell-or-rework decision? a. 30 b. 20 c. 15 d. 50
PROBLEM NO. 3: A mixing plant having a capacity of 50 cu. m. every hour costs P2,500,000. It is estimated to process 800,000 cu. m. during its life. During a certain year it processed 60,000 cu. m. If its scrap value is P100,000, determine the total depreciation cost chargeable to each batch of 50 cu. m. using Service-Output-Method.
Coronado Industries incurs the following costs to produce 8600 units of a subcomponent: $7224 Direct materials 9718 Direct labor Variable overhead 10836 Fixed overhead 16200 An outside supplier has offered to sell Coronado the subcomponent for $2.85 a unit. If Coronado accepts the offer, by how much will net income increase (decrease)? o $(2494) O $3268 $(7568) O $19468 4)
Problem 11-75 (Algo) Joint Cost Allocation and Product Profitability (LO 11-7, 8, 9) Prescott Lumber processes logs into grade A and grade B lumber. Logs cost $17,200 per load. The milling process produces 5,000 units of grade A with a market value of $100,800, and 20,000 units of grade B with a market value of 514,400. The cost of the milling process is $22,000 per load. Required: a. If the costs of the logs and the milling process are allocated on the basis of units of output what cost will be assigned to each product? b. If the costs of the logs and the milling process are allocated on the basis of the net realizable value, what cost will be assigned to each product? c-1. How much profit or loss does the grade B lumber provide using the data in this problem and your analysis in requirement (a)? c-2. Is it really possible to determine which product is more profitable? Complete this question by entering your answers in the tabs below. ReqA If the costs of the logs and the milling…
Sell or Process Further Decision Wexpro, Inc., produces several products from processing 1 ton of clypton, a rare mineral. Material and processing costs total $60,000 per ton, one-fourth of which is allocated to product X15. Seven thousand units of product X15 are produced from each ton of clypton. The units can either be sold at the split-off point for $9 each, or processed further at a total cost of $9,500 and then sold for $12 each. Required: 1. What is the financial advantage (disadvantage) of further processing product X15? 2. Should product X15 be processed further or sold at the split-off point?
EXERCISE 6-13 Sell or Process Further Decision L06-7 Wexpro, Inc., produces several products from processing 1 ton of clypton, a rare mineral. Mate- rial and processing costs total $60,000 per ton, one-fourth of which is allocated to product X15. Seven thousand units of product X15 are produced from each ton of clypton. The units can either be sold at the split-off point for $9 each, or processed further at a total cost of $9,500 and then sold for $12 each. Required: What is the financial advantage (disadvantage) of further processing product X15? Should product X15 be processed further or sold at the split-off point? 1. 2.
Q4 The Portland Company manufactures Part No. 498 for use in its production line. The manufacturing cost per unit for 20,000 units of Part No. 498 is as follows: Direct materials $4 Variable direct manufacturing labor 22 Variable manufacturing overhead 17 Fixed manufacturing overhead allocated 20 Total manufacturing cost per unit $63 The Counter Company has offered to sell 20,000 units of Part No. 498 to Portland for $58 per unit. Portland will make the decision to buy the part from Counter if there is an overall savings of at least $20,000 for Portland. If Portland accepts Counter’s offer, $5 per unit of the fixed manufacturing overhead allocated would be eliminated. Furthermore, Portland has determined that the released facilities could be used to save relevant costs in the manufacture of Part No. 575. For Portland to…