Homework Answers
Solution:
In case of scarce resource, order of production is based on contribution margin per unit of scarce resource.
Therefore, the criterion that should be used to determine the order of production is "Contribution margin per unit of scarce resource".
Hence, option "C" is correct.
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1. When a scarce resource, such as direct labor hours, exists in an organization, the criterion...
UNTER COMPONENTS Star 150 150 Costs per unit Direct materials Direct labor Variable overhead Fixed overhead...
UNTER COMPONENTS Star 150 150 Costs per unit Direct materials Direct labor Variable overhead Fixed overhead Total cost per unit Price Units sold Star 100 130 $ 60 30 180 400 $ 580 $ 4,000 40 240 510 780 2,000 40 Additional Information: Variable overhead varies with quantity of direct labor-hours. Average wage rate per hour Plant capacity (in direct labor-hours) 20,000 Current production (in direct labor-hours) 10,000 Requirement a. Information: Star 100 2,500 400 $ Star 150 2,500 500...
Rope Co. makes two products, both of which use a scarce resource: direct labour hours. Both...
Rope Co. makes two products, both of which use a scarce resource: direct labour hours. Both products have a unit contribution margin of $20, and there is sufficient demand for both products that Rope can sell all of the products it can produce. However, the direct labour cost per unit of Product Y is higher than that for Product X. The unit price of Product X is higher than the unit price of Product Y. Rope is interested in maximizing...
26. Dell Corp. produces three products and is currently facing a labor shortage - only 20,000...
26. Dell Corp. produces three products and is currently facing a labor shortage - only 20,000 hours are available this month. The selling price, costs, labor requirements, machine requirements and demand of the three products are as follows: A. In what order should Dell prioritize (rank from 1st choice to 3rd) production of the products? To determine priority you first determine what resource is constrained (in this case it is labor hours). Then calculate Unit Contribution Margin. Using unit contribution...
27. Which of the following statements is truewhen there is only one scarce resource? a. Choose the...
27. Which of the following statements is truewhen there is only one scarce resource? a. Choose the product that gives the largest contribution per unit of the scarce resource used. b. Choose the product that gives the smallest contribution per unit of the scarce resource used. c. Choose the product that gives the largest contribution per unit of all of the resources used. d. Choose the product that gives the smallest contribution per unit of all of the resources used. 28. External...
3. Based on response to Requirement 1 & 2, how much of 103,250 direct labor hours...
3. Based on response to Requirement 1 & 2, how much of 103,250 direct labor hours of capacity will be allocated to Walton Toy Company's various products? Product Hours Debbie Trish Sarah Mike Sewing kit 4. What is the highest total contribution margin that the company can earn if it makes optimal use of its constrained resource? Total contribution margin 5. What is the highest price, in terms of a rate per hour, that Walton Toy Company would be willing...
Dalton Inc. produces and sells three products. Unit data concerning each product is shown below. Selling price Direct l...
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Johnson Corporation produces and sells three products. Unit data concerning each product is shown below. D...
Johnson Corporation produces and sells three products. Unit data concerning each product is shown below. D E F _____________________________________________________________________ Selling Price $196.90 $296.60 $246.40 _____________________________________________________________________ Direct Labor Costs $32.40 $92.40 $37.20 _____________________________________________________________________ Other Variable Costs $97.00 $81.00 $141.00 -The company has 1,900 hours of labor available to build inventory in anticipation of the company's peak season. Management is trying to decide which product should be produced. The direct labor hourly rate is $12 -Determine the number of direct labor hours...
8) 8) Johansen Corporation uses a predetennined overhead rate based on direct labor-hours to apply manufacturing...
8) 8) Johansen Corporation uses a predetennined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. The Corporation has provided the following estimated costs for the next year: Direct materials Direct labor Rent on factory building Sales salaries Depreciation on factory equipment Indirect labor Production supervisor's salary $ $ $ $ $ $ $ 6,000 20,000 15,000 25,000 8,000 12,000 15,000 Jameson estimates that 20,000 direct labor-hours will be worked during the year. The predetermined overhead rate...
Direct materials-1 pound plastic at $6.00per pound Direct labor-2.0 hours at $12.20 per hour Vari...
Direct materials-1 pound plastic at $6.00per pound Direct labor-2.0 hours at $12.20 per hour Variable manufacturing owerhead Fixed manufacturing overhead Total standard cost per unit $6.00 2440 15.00 13.00 $58.40 The predetermined manufacturing overhead rate is $14.00 per direct labor hour ($28.00 2.0 Itwas computed from a master manufacturing overhead budget based on normal production of 10,000 direct labor hours (5,000 units) for the month. The master budget showed total variable costs of $75,000$7.50 per hour) and total foxed overhead...
UNTER COMPONENTS Star 150 150 Costs per unit Direct materials Direct labor Variable overhead Fixed overhead Total cost per unit Price Units sold Star 100 130 $ 60 30 180 400 $ 580 $ 4,000 40 240 510 780 2,000 40 Additional Information: Variable overhead varies with quantity of direct labor-hours. Average wage rate per hour Plant capacity (in direct labor-hours) 20,000 Current production (in direct labor-hours) 10,000 Requirement a. Information: Star 100 2,500 400 $ Star 150 2,500 500...
3. Based on response to Requirement 1 & 2, how much of 103,250 direct labor hours of capacity will be allocated to Walton Toy Company's various products? Product Hours Debbie Trish Sarah Mike Sewing kit 4. What is the highest total contribution margin that the company can earn if it makes optimal use of its constrained resource? Total contribution margin 5. What is the highest price, in terms of a rate per hour, that Walton Toy Company would be willing...
Dalton Inc. produces and sells three products. Unit data concerning each product is shown below. Selling price Direct labor costs Other variable costs Product DE F $207.0 $324.4 $247.4 36.4 107.8 43.4 103 78 142 The company has 2,500 hours of labor available to build inventory in anticipation of the company's peak season. Management is trying to decide which product should be produced. The direct labor hourly rate is $14. Determine the number of direct labor hours per unit. (Round...
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Direct materials-1 pound plastic at $6.00per pound Direct labor-2.0 hours at $12.20 per hour Variable manufacturing owerhead Fixed manufacturing overhead Total standard cost per unit $6.00 2440 15.00 13.00 $58.40 The predetermined manufacturing overhead rate is $14.00 per direct labor hour ($28.00 2.0 Itwas computed from a master manufacturing overhead budget based on normal production of 10,000 direct labor hours (5,000 units) for the month. The master budget showed total variable costs of $75,000$7.50 per hour) and total foxed overhead...
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