- TRUE.
- A company usually produces in large quantities in order to reduce it's total batch level costs
- Batch level costs is related to the group of units. Like fixed cost, it can be reduced if the production is highly efficient.
To reduce its total batch-level costs, a company should produce its products in large batches. True...
z Cont. Batch costs Number of batches Engineering changes Number of engineering hours Total estimated manufacturing overhead for the year $196,000 $188,950 $3,600,200 Total estimated direct labor hours for the company for the year are 100,250 hours. The company is evaluating whether it should use an activity-based costing system in place of its traditional costing system. Additional information about production needed for the activity-based costing system follows: Zips Dees Total Direct labor hours 61,250 39,000 100,250 Batches 2,350 400 2,750...
It costs a pharmaceutical company $75,000 to produce a 1,000-pound batch of a drug. The average yield from a batch is unknown but the best case is 90% yield (that is, 900 pounds of good drug will be produced), the most likely case is 85% yield, and the worst case is 70% yield. The annual demand for the drug is unknown, with the best case being 20,000 pounds, the most likely case 17,500 pounds, and the worst case 10,000 pounds....
It costs a pharmaceutical company $75,000 to produce a 1,000-pound batch of a drug. The average yield from a batch is unknown but the best case is 90% yield (that is, 900 pounds of good drug will be produced), the most likely case is 85% yield, and the worst case is 70% yield. The annual demand for the drug is unknown, with the best case being 20,000 pounds, the most likely case 17,500 pounds, and the worst case 10,000 pounds....
Output unit-level costs are the costs of the activities performed on each individual unit whereas batch-level costs are the costs of activities related to a group of units. Question 14 options: FALSE TRUE Cannot be determined with existing information
TUU PIS Suppose a large company makes 25,000 gadgets per year in batches of x items at a time. After analyzing setup costs to produce each batch and taking into account storage costs, it has been determined that the total cost C(x) of producing 25,000 gadgets in batches of x items at a time is 160,000,000 given by C(x) = 1,600,000 + - - +3.5x. Complete parts (a)-(c) below. a. Determine the marginal cost and average cost functions. Graph and...
The Medal Plus Company manufactures windows. Its manufacturing plant has the capacity to produce 11,000 windows each month. Current production and sales are 10,000 windows per month. The company normally charges $250 per window. Cost information for the current activity level is as follows: Variable costs that vary with the number of units produced Direct materials $400,000 Direct manufacturing labor 350,000 Variable costs (for setups, materials handling, quality control, and so on) that vary with the number of batches, 50...
Bristol Fabricators, Inc., produces air purifiers in batches. To manufacture a batch of the purifiers, Bristol Fabricators, Inc., must set up the machines and assembly line tooling. Setup costs are batch-level costs because they are associated with batches rather than individual units of products. A separate Setup Department is responsible for setting up machines and tooling for different models of the air purifiers. Setup overhead costs consist of some costs that are variable and some costs that are fixed with...
The Award Plus Company manufactures windows. Its manufacturing plant has the capacity to produce 12,000 windows each month. Current production and sales are 10,000 windows per month. The company normally charges $300 per window. Cost information for the current activity level is as follows: Variable costs that vary with number of units produced Direct materials $600,000 Direct manufacturing labour 450,000 Variable costs (for setups, materials handling, quality control, and so on) that vary with number of batches, 200 batches x...
A company that ships a large quantity of its products from its manufacturing plant to a warehouse that it leases until the customer is ready for the product should record the delivery as revenue. True False
1. True or False: Managerial decisions based on activity-based costing (ABC) information affect only volume-level, batch-level, and product-level costs. 2. True or False: A cost of quality system is based on the trade-off between incurring costs to meet product (or service) specifications and the costs of failing to meet those expectations.