Trusted Products Company makes a household appliance with model number L800. The goal for 2020 is to reduce direct materials usage per unit. No defective units are currently produced Manufacturing conversion costs depend on production capacity defined in terms of L800 units that can be produced. The industry market size for appliances increased 3% from 2019 to 2020. The following additional data are available for 2019 and 2020 Units of L800 produced and sold Selling price Direct materials (square feet Direct material costs per square foot Manufacturing capacity for L800 (units) Total conversion costs Conversion costs per unit of capacity 2019 2020 38,000 39,140 $310 $290 97,000 94,000 $34 $37 46,100 47,500 $1,140,000 $1,106,400 $24 $24 OA No, because operating income decreased OB No. because direct material cost per unit decreased OC No, because direct materials usage per unit increased OD. Yes, because total revenues increased
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- Ratliff Appliances Company makes a household appliance with model number RM16. The goal for 2020 is to reduce direct materials usage per unit. No defective units are currently produced. Manufacturing conversion costs depend on production capacity defined in terms of RM16 units that can be produced. The industry market size for appliances increased 10% from 2019 to 2020. The following additional data are available for 2019 and 2020: 2019 2020 Units Produced & Sold 33,000 37,950 Selling Price $ 360 $ 345 Direct Materials (square feet) 82,500 87,000 Direct Material Costs per square foot $ 31 $ 33 Manufacturing capacity (units) 41,250 39,850 Total Conversion Costs $ 866,250 $ 797,000 Conversion Costs per unit of capacity $ 21 $ 20 Ignoring the market growth, but considering your answer to question (a), how much of Ratliff Co’s change in income from 2019 to 2020 is due to a cost leadership strategy?s) Unused Capacity Ratliff Appliances Company makes a household appliance with model number RM16. The goal for 2020 is to reduce direct materials usage per unit. No defective units are currently produced. Manufacturing conversion costs depend on production capacity defined in terms of RM16 units that can be produced. The industry market size for appliances increased 10% from 2019 to 2020. The following additional data are available for 2019 and 2020: 2019 Units Produced & Sold 33,000 Selling Price $360 Direct Materials (square feet) 82,500 Direct Material Costs per square foot $ 31 Manufacturing capacity (units) 41,250 Total Conversion Costs $ 866,250 Conversion Costs per unit of capacity $21 Compute the cost of unused capacity for 2020. 2020 37,950 $ 345 87,000 $ 33 39,850 $797,000 $ 20At the end of 2018, Diatomic Company implemented a new labor process and redesigned its product with the expectation that input usage efficiency would increase. Now, at the end of 2019, the president of the company wants an assessment of the changes on the company's productivity. The data needed for the assessment are as follows: 2018 2019 Output 45,000 54,000 Output prices $10.00 $10.00 Materials (lbs.) 22,500 22,950 Materials unit price $3.00 $4.00 Labor (hrs.) 18,000 16,875 Labor rate per hour $5.00 $5.00 Power (kwh) 11,250 14,625 Price per kwh $2.00 $3.00 By how much did profit change as a result of profitability changes in labor? a.$23,625 increase b.$23,625 decrease c.$5,625 increase d.$45,000 increase
- Peter Company makes a high-end Appliance, Y45. Peter presents the following data for the years 2019 and 2020: Units of Y45 produced and sold Selling price Direct materials (square feet) Direct materials costs per square foot Manufacturing capacity in units of Y45 Total conversion costs 2019 100,000 $1,000 300,000 $100 125,000 2020 105,000 $1,100 307,500 $110 125,000 $12,500,000 $13,750,000 $110 Conversion costs per unit of capacity Selling and customer-service capacity (customers) Total selling and customer-service costs Selling and customer-service capacity cost per customer $100 300 300 $4,500,000 $15,000 $4,687,500 $15,625 Peter produces no defective units but it wants to reduce direct materials usage per unit of Y45. Manufacturing conversion costs in each year depend on production capacity defined in terms of Y45 units that can be produced. Selling and customer-service costs depend on the number of customers that the customer and service functions are designed to support. Peter had…At the end of 2018, Diatomic Company implemented a new labor process and redesigned its product with the expectation that input usage efficiency would increase. Now, at the end of 2019, the president of the company wants an assessment of the changes on the company's productivity. The data needed for the assessment are as follows: 2018 2019 Output 45,000 54,000 Output prices $10.00 $10.00 Materials (Ibs.) 22,500 22,950 Materials unit price $3.00 $4.00 Labor (hrs.) 18,000 16,875 Labor rate per hour $5.00 $5.00 Power (kwh) 11,250 14,625 Price per kwh $2.00 $3.00 How much profit was generated in 2019? Oa. $540,000 Оь. 8270,000 c. $319,950 Od. $220,050 se . Which of the following is true of non-value-added activities? a. These activities are a source of waste in the value stream of a product. b. These activities are identified only after the finished goods reaches final customers. Oc. These activities ensure that no rework is required as the final product has zero-defects. Od. These…Peter Company makes a high-end Appliance, Y45. Peter presents the following data for the years 2019 and 2020: Units of Y45 produced and sold Selling price Direct materials (square feet) Direct materials costs per square foot Manufacturing capacity in units of Y45 Total conversion costs 2019 100,000 $1,000 300,000 $100 2020 105,000 $1,100 307,500 $110 125,000 $12,500,000 $13,750,000 $100 125,000 Conversion costs per unit of capacity Selling and customer-service capacity (customers) Total selling and customer-service costs Selling and customer-service capacity cost per customer $15,000 $110 300 300 $4,500,000 $4,687,500 $15,625 Peter produces no defective units but it wants to reduce direct materials usage per unit of Y45. Manufacturing conversion costs in each year depend on production capacity defined in terms of Y45 units that can be produced. Selling and customer-service costs depend on the number of customers that the customer and service functions are designed to support. Peter had…
- You are required show ALL supportingworkings where necessary and state any assumption(s) made. _C-V-P AnalysisGreek Manufacturing Company produces and sells a line of product that are sold usually all year round. Thecompany has a maximum production capacity of 100,000 units per year. Operating at normal capacity, thebusiness earned Operating Income of $600,000 in 2020. The following cost data has been prepared for theyear ended December 31, 2020.Selling price per unit……………………………………… $50.00Production Costs:Direct Materials …………………………………. $10.00Direct Labour ……………………………………. $8.00Variable Manufacturing Overhead ……………. $7.00Fixed Manufacturing Overhead…………....................... $450,000Fixed Selling & Administrative Expenses……………… $300,000Variable selling expense per unit ………………………. $10.00Required: a. Using the equation method calculate the normal capacity of the business b.Assuming sales equal to the normal capacity calculated in (a) above, prepare a contribution margin income…The garden supply company is introducing various aged trees to their product range in 2021. They have provided the following information relating to its planned activities. I-year-old 2-year-old 3-year-old Selling price $14 $24 $34 Variable cost/unit $10 $15 $20 Expected Sales Volume 40,000 30,000 10,000 Total fixed cost = $180,000 Required Calculate the contribution margin for each product, the sales mix percentages and the weighted average contribution margin. Calculate the break-even point in total units and units per product based on the data.…You are required show ALL supporting workings where necessary and state any assumption(s) made. Greek Manufacturing Company produces and sells a line of product that are sold usually all year round. Thecompany has a maximum production capacity of 100,000 units per year. Operating at normal capacity, thebusiness earned Operating Income of $600,000 in 2020. The following cost data has been prepared for theyear ended December 31, 2020.Selling price per unit……………………………………… $50.00Production Costs:Direct Materials …………………………………. $10.00Direct Labour ……………………………………. $8.00Variable Manufacturing Overhead ……………. $7.00Fixed Manufacturing Overhead…………....................... $450,000Fixed Selling & Administrative Expenses……………… $300,000Variable selling expense per unit ………………………. $10.00Required:g) Greek’s management team is concerned about the selling expenses associated with the product and wants to reduce the variable selling expense per unit by 30%, which will see a simultaneous reduction in…
- 2) Trusted Products Company makes a household appliance with model number L800. The goal for 2018 is to reduce direct materials usage per unit. No defective units are currently produced. Manufacturing conversion costs depend on production capacity defined in terms of L800 units that can be produced. The industry market size for appliances increased 15% from 2017 to 2018. The following additional data are available for 2017 and 2018: 2017 2018 Units of L800 produced and sold 33,000 37,950 Selling price $370 $355 Direct materials (square feet) 98,000 95,000 Direct material costs per square foot $34 $35 Manufacturing capacity for L800 (units) 41,250 39,650 Total conversion costs $948,750 $911,950 Conversion costs per unit of capacity $23 $23 What is the cost effect of the growth component for direct materials? 2) A) S1,831,500F B) $499,800 U C) S499,800 F D) $1,831,500 UThe Bat Division of World Baseball Berhad has just revised its actual cost data for 2020. Bat Division transfers goods to the Sport Division. Sport Division can buy the same goods in the open market for RM122 each. Bat's new cost data are as follows: Direct materials RM 40 Direct labor 30 Variable overhead 10 Fixed overhead 16 Variable selling expenses 6 Fixed selling and administrative expenses 12 Total costs RM114 Desired return 20 Sales price RM134 Current production is 200,000 units, and the Bat Division has a capacity of 300,000 units. Required: What is the lowest price the Bat Division should charge for the internal transfers of its goods? What is the highest price the Sport Division should pay for the units? Give the primary reason why the Bat Division should reduce its price.The owners would like to know what reasons caused the current performance of the company and ask your opinion. Through review of the complete records you were able to obtain this additional information: (1) The selling price for every unit is P7.20 during 2018 and; (2) The marketing department did a tremendous job and was able to increase sales units by 20% during 2019. The percentage increase (decrease) in unit cost is: a. 20% b. (20%) c. 44% d. (44%)