Backwoods Incorporated manufactures rustic furniture. The cost accounting system estimates manufacturing costs to be $80 per...
Backwoods Incorporated manufactures rustic furniture. The cost accounting system estimates manufacturing costs to be $80 per table, consisting of 70% variable costs and 30% fixed costs. The company has surplus capacity available. It is Backwoods’ policy to add a 50% markup to full costs.
- Backwoods Incorporated is invited to bid on an order to supply 100 rustic tables. What is the lowest price Backwoods should bid on this one-time-only special order?
- A large hotel chain is currently expanding and has decided to decorate all new hotels using the rustic style. Backwoods Incorporated is invited to submit a bid to the hotel chain. What is the lowest price per unit Backwoods should bid on this long-term order?
Homework Answers
For one-time special order
The company has surplus capacity available. So, the company need not allocate fixed costs to this one-time special order for computing the lowest bid.
The lowest price for bid in this case would be the variable costs, i.e., 80*70% = $ 56
For long term order
For long-term order, the company can anticipate the sales volume. So, the overhead allocation can be done considering the planned sales volume.
The lowest price for bid in this case would be the full manufacturing costs, i.e., $ 80
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Backwoods Incorporated manufactures rustic furniture. The cost
accounting system estimates manufacturing costs to be $80 per...
UJ MUI Pulaleu manuractures rustic furniture. The cost accounting system estimates manufacturing costs to be $80...
UJ MUI Pulaleu manuractures rustic furniture. The cost accounting system estimates manufacturing costs to be $80 per table, consisting of 70% variable costs and 30% fixed costs. The company has surplus capacity available. It is Backwoods' policy to add a 50% markup to full costs. a. Backwoods Incorporated is invited to bid on an order to supply 100 rustic tables. What is the lowest price Backwoods should bid on this one-time-only special order? b. A large hotel chain is currently...
Total cost data follow for Glendale Manufacturing Company, which has a normal capacity per period of...
Total cost data follow for
Glendale Manufacturing Company, which has a normal capacity per
period of 8,000 units of product that sell for $60 each. For the
foreseeable future, regular sales volume should continue to equal
normal capacity.
Dirert matanal 64 000 Variable manufscturing overhead 48,400 Fixed manufacturing overhead (Note 38,400 Selling expense (Note 2) 35,200 Administrative expense eec) $202 400 Notes . Beyond normal capacity, fixed overhead costs Increase $1,800 for each 500 units or fraction thereof untl a...
Special Order Total cost data follow for Glendale Manufacturing Company, which has a normal capacity per...
Special Order Total cost data follow for Glendale Manufacturing Company, which has a normal capacity per period of 8,000 units of product that sell for $60 each. For the foreseeable future, regular sales volume should continue to equal normal capacity. Direct material $100,800 Direct labor 62,400 Variable manufacturing overhead 46,800 Fixed manufacturing overhead (Note 1) 38,400 Selling expense (Note 2) 35,200 Administrative expense (fixed) 15,000 $298,600 Notes: 1. Beyond normal capacity, fixed overhead costs increase $1,800 for each 500 units...
Special Urder Total cost data follow for Glendale Manufacturing Company, which has a normal capacity per...
Special Urder Total cost data follow for Glendale Manufacturing Company, which has a normal capacity per period of 8,000 units of product that sell for $60 each. For the foreseeable future, regular sales volume should continue to equal normal capacity. Direct material $100,800 Direct labor 62,400 Variable manufacturing overhead 46,800 Fixed manufacturing overhead (Note 1) 38,400 Selling expense (Note 2) 35,200 Administrative expense (fixed) 15,000 $298,600 Notes: 1. Beyond normal capacity, fixed overhead costs increase $1,800 for each 500 units...
Special Order Total cost data follow for Glendale Manufacturing Company, which has a normal capacity per...
Special Order Total cost data follow for Glendale Manufacturing Company, which has a normal capacity per period of 8,000 units of product that sell for $60 each. For the foreseeable future, regular sales volume should continue to equal normal capacity. Direct material $102,400 Direct labor 64,000 Variable manufacturing overhead 48,400 Fixed manufacturing overhead (Note 1) 38,400 Selling expense (Note 2) 35,200 Administrative expense (fixed) 15,000 $303,400 Notes: 1. Beyond normal capacity, fixed overhead costs increase $1,800 for each 500 units...
Special Order Total cost data follow for Glendale Manufacturing Company, which has a normal capacity per...
Special Order Total cost data follow for Glendale Manufacturing Company, which has a normal capacity per period of 8,000 units of product that sell for $60 each. For the foreseeable future, regular sales volume should continue to equal normal capacity. Direct material $99,200 Direct labor 60,800 Variable manufacturing overhead 45,200 Fixed manufacturing overhead (Note 1) ad (Note 1) 38,400 Selling expense (Note 2) 35,200 Administrative expense (fixed) 15.000 $293.800 Notes: 1. Beyond normal capacity, fixed overhead costs increase $1,800 for...
Special Order Total cost data follow for Glendale Manufacturing Company, which has a normal capacity per...
Special Order Total cost data follow for Glendale Manufacturing Company, which has a normal capacity per period of 8,000 units of product that sell for $60 each. For the foreseeable future, regular sales volume should continue to equal normal capacity. Direct material $102,400 Direct labor 64,000 Variable manufacturing overhead 48,400 Fixed manufacturing overhead (Note 1) 38,400 Selling expense (Note 2) 35,200 Administrative expense (fixed) 15,000 $303,400 Notes: 1. Beyond normal capacity, fixed overhead costs increase $1,800 for each 500 units...
Special Order Total cost data follow for Glendale Manufacturing Company, which has a normal capacity per...
Special Order Total cost data follow for Glendale Manufacturing Company, which has a normal capacity per period of 8,000 units of product that sell for $60 each. regular sales volume should continue to equal normal capacity. Direct material $102,400 Direct labor 64,000 Rectangular Snip Variable manufacturing overhead 48,400 Fixed manufacturing overhead (Note 1) 38,400 Selling expense (Note 2) 35,200 Administrative expense (fixed) 15,000 $303,400 Notes: 1. Beyond normal capacity, fixed overhead costs increase $1,800 for each 500 units or fraction...
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UJ MUI Pulaleu manuractures rustic furniture. The cost accounting system estimates manufacturing costs to be $80 per table, consisting of 70% variable costs and 30% fixed costs. The company has surplus capacity available. It is Backwoods' policy to add a 50% markup to full costs. a. Backwoods Incorporated is invited to bid on an order to supply 100 rustic tables. What is the lowest price Backwoods should bid on this one-time-only special order? b. A large hotel chain is currently...
Total cost data follow for
Glendale Manufacturing Company, which has a normal capacity per
period of 8,000 units of product that sell for $60 each. For the
foreseeable future, regular sales volume should continue to equal
normal capacity.
Dirert matanal 64 000 Variable manufscturing overhead 48,400 Fixed manufacturing overhead (Note 38,400 Selling expense (Note 2) 35,200 Administrative expense eec) $202 400 Notes . Beyond normal capacity, fixed overhead costs Increase $1,800 for each 500 units or fraction thereof untl a...
Special Order Total cost data follow for Glendale Manufacturing Company, which has a normal capacity per period of 8,000 units of product that sell for $60 each. For the foreseeable future, regular sales volume should continue to equal normal capacity. Direct material $100,800 Direct labor 62,400 Variable manufacturing overhead 46,800 Fixed manufacturing overhead (Note 1) 38,400 Selling expense (Note 2) 35,200 Administrative expense (fixed) 15,000 $298,600 Notes: 1. Beyond normal capacity, fixed overhead costs increase $1,800 for each 500 units...
Special Urder Total cost data follow for Glendale Manufacturing Company, which has a normal capacity per period of 8,000 units of product that sell for $60 each. For the foreseeable future, regular sales volume should continue to equal normal capacity. Direct material $100,800 Direct labor 62,400 Variable manufacturing overhead 46,800 Fixed manufacturing overhead (Note 1) 38,400 Selling expense (Note 2) 35,200 Administrative expense (fixed) 15,000 $298,600 Notes: 1. Beyond normal capacity, fixed overhead costs increase $1,800 for each 500 units...
Special Order Total cost data follow for Glendale Manufacturing Company, which has a normal capacity per period of 8,000 units of product that sell for $60 each. For the foreseeable future, regular sales volume should continue to equal normal capacity. Direct material $99,200 Direct labor 60,800 Variable manufacturing overhead 45,200 Fixed manufacturing overhead (Note 1) ad (Note 1) 38,400 Selling expense (Note 2) 35,200 Administrative expense (fixed) 15.000 $293.800 Notes: 1. Beyond normal capacity, fixed overhead costs increase $1,800 for...
Special Order Total cost data follow for Glendale Manufacturing Company, which has a normal capacity per period of 8,000 units of product that sell for $60 each. regular sales volume should continue to equal normal capacity. Direct material $102,400 Direct labor 64,000 Rectangular Snip Variable manufacturing overhead 48,400 Fixed manufacturing overhead (Note 1) 38,400 Selling expense (Note 2) 35,200 Administrative expense (fixed) 15,000 $303,400 Notes: 1. Beyond normal capacity, fixed overhead costs increase $1,800 for each 500 units or fraction...
eBook Calculator Print Item Overhead Rates, Unit Costs Folsom Company manufactures specialty tools to customer order. There are three producing departments. Departmental information on budgeted overhead and various activity measures for the coming year is as follows: Welding Assembly Finishing Estimated overhead $220,000 $62,000 $150,000 Direct labor hours 4,500 10,000 6,000 Direct labor cost $90,000 $150,000 $120,000 Machine hours 5,000 1,000 2,000 Currently, overhead is applied on the basis of machine hours using a plantwide rate. However, Janine, the controller,...
Accounting 305 CASE 1 Sarif Industries Activity-Based Costing (ABC) Quantum TM manufactures electronic testing and measurement instruments. Many products are custom-designed with recent orders for function generators, harmonic analyzers, logic analyzers, temperature measurement instruments, and data-logging instruments. The company prices its instruments at 30 percent over estimated cost (excluding administrative and selling costs). Recently, senior management has noted that its product mix has changed. Specifically, the company is receiving fewer large orders for instruments that are relatively simple to produce,...
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