Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
Student Name:
Class:
Labor cost Wage rate Labor hours
Model per unit per hour per unit
Incremental profit (loss) on special order:
Star 100 Star 150 Total
2,500 2,500
400$ 500$
Differential Revenues
Special order units
Selling price
Problem 04-52
McGraw-Hill/Irwin
Instructor
Enter data in the shaded areas
Requirement a:
Labor hours required for special order:
UNTER COMPONENTS
Labor hours
special order
Total
per unit quantity Hours
1.50 3,500 5,250.00
Star 100 Star 150
580$ 780$
Correct! Correct!
137.50
343,750$
Star 100 Star 150
180$ 230$
Star 100 Star 150
$360 $510
Lowest contribution margin per hour
CM per unit
Regular production
Special Order
CM per unit
If labor hours for 3,500 units exceed capacity, production will need to
be reduced on the product with the lowest contribution margin.
Labor hours required for special order:
Requirement b.
Total contribution margin with the special order:
Compute contribution margin per hour for regular orders:
Compute contribution margin lost from regular sales:
Star 100
Revenue per unit
Star 100 Star 150
180$ 230$
3,500 3,500
Special Order:
Compute the total contribution margin with the special order:
Requirement c.
Number of units
CM per unit
Star Star
100 150
130$ 150$
60 80
40$
Star Star
Star Star
100 150
Star Star
100 150
3,500 3,500
Direct materials
Direct labor
Given Data P04-52:
Units purchased
Requirement c. Information:
Requirement b. Information:
Requirement a. Information:
Additional Information: Variable overhead varies with quantity of direct labor-hours.
Costs per unit
UNTER COMPONENTS
Average wage rate per hour
Student Name:
Class:
Before Price After Price
Reduction Reduction Impact
370$ 325$
6,000 7,000
Without
Government
Contract Regular Government Total Impact
2,960,000$ 2,590,000$ 245,000$ 2,835,000$ 125,000$ Decrease
Correct! Correct! Correct!
150$
Quantity
Requirement a.
Instructor
McGraw-Hill/Irwin
DAVIS KITCHEN SUPPLY
Problem 04-56
Sales price
Requirement b.
With Government Contract
Revenue
Compute minimum price:
Requirement c.
The minimum price is that price
Variable manufacturing costs
Correct!
6,000 regular
Stoves
Produced
In-house Regular (In)
Regular (Out)
Modified Total
2,220,000$ 1,480,000$ 740,000$ 720,000$ 2,940,000$
150$
Requirement d.
Contract 2,000 Regular Stoves
Computation of maximum price for outside contractor:
Requirement f.
Avoidable costs:
Variable manufacturing cost saved per unit
Revenue
All costs are sunk costs except for the variable cost of marketing.
Requirement e.
Computation of price that is equivalent to in-house cost of production:
6,000
370$
7,000
325.00$
?
1,000
2,000
40$
460
?
2,000
1,600
Units manufactured per month
Unit manufacturing costs
New price after reduction
Regular selling price per unit
Requirement f. information:
Minimum acceptable selling price per unit
Requirement b. information:
Requirement c. information:
Requirement d. information:
Change in monthly income
Government contract (in units)
Foreign market order (in units)
Given Data P04-56:
Requirement a. information:
Increase in volume (in units)
DAVIS KITCHEN SUPPLY
Foreign market shipping costs per unit
Number of obsolete units in inventory
Requirement e. information:
Proposal from outside contractor (in units)
Use information from requirement e. plus:
Units produced with idle capacity
Student Name:
Class:
Basic Classic Formal
600,000$ 640,000$ 5,700,000$
Correct!
Basic Classic Formal
60,000$ 116,000$ 570,000$
Correct! Correct! Correct!
Classic «- Correct!
10,000
2
20,000
AUSTIN ENTERPRISES
Problem 04-62
McGraw-Hill/Irwin
Instructor
Requirement c:
Requirement b:
Requirement a:
Total revenue
Less variable manufacturing costs:
Total contribution margin
Most profitable product per labor hour: (enter name):
Units produced to meet demand
Labor hours per unit
Total labor hours for most profitable product
Basic Classic Total
428,550$ 640,000$ 1,068,550$
142,850$ 60,000$ 202,850$
Basic Classic Formal
3.00$ 11.60$ 19.00$
Correct! Correct! Correct!
0.90$ 5.60$ (2.00)$
Decision to add shift to product more Basic and/or Formal
Requirement e:
Requirement d:
Total revenue
Less variable manufacturing costs:
Direct materials
Contribution margin per unit
Additional labor cost at higher rate
Basic Classic Formal
30$ 64$ 190$
20,000 10,000 30,000
0.5 0.3 0.6
0.7 2.0 7.0
Input requirement per unit
Maximum annual demand (units)
Sales price
Given Data P04-62:
AUSTIN ENTERPRISES
Direct labor (hours)
Direct material (yards)
Product information:
