Ocean View Motors specializes in producing one specialty vehicle. It is called Surfer and is styled...
Ocean View Motors specializes in producing one specialty vehicle. It is called Surfer and is styled to easily fit multiple surfboards in its back area and top-mounted storage racks.
Ocean View has the following manufacturing costs:
| Plant management costs,
$1,464,000 per year |
| Cost of leasing equipment,
$2,856,000 per year |
| Workers' wages,
$800 per Surfer vehicle produced |
| Direct materials costs: Steel,
$1,500 per Surfer; Tires,$130 per tire, each Surfer takes 5 tires (one spare) |
|
City license, which is charged monthly based on the number of tires used in production: |
|
0-500 tires |
$30,000 |
|---|---|
|
501-1,000 tires |
$75,000 |
|
more than 1,000 tires |
$230,000 |
|
1. What is the fixed manufacturing cost per month? |
|
|
2. |
Plot a graph for the variable manufacturing costs and a second for the fixed manufacturing costs per month. How does the concept of relevant range relate to your graphs? Explain. |
|
3. |
What is the total manufacturing cost of each vehicle if
100 vehicles are produced each month? 225 vehicles? How do you explain the difference in the manufacturing cost per unit? |
Homework Answers
| All Fig in $ | ||||||||
| Part 1 | Fixed Manufacturing Cost | Per Year | Per Month | |||||
| Plant Management Cost | 14,64,000 | 122000 | ||||||
| Cost of leasing equipment | 28,56,000 | 238000 | ||||||
| Fixed manufacturing cost per month | 360000 | |||||||
| Part 2 | Variable Costs | Per Units | ||||||
| Wages per vehicle | 800 | |||||||
| Steel | 1000 | |||||||
| Cost of 5 tires (130*5) | 650 | |||||||
| City Lisence 0- 500 units | 30000 | |||||||
| Cost per units | 32450 | |||||||
| Note | ||||||||
| Cost of Lisence is 0-500 is 30000. So if 1 unit produced than 30000 to be paid | ||||||||
|
|
||||||||
| Fixed manufacturing cost per month | ||||||||
| Plant Management Cost | 122000 | |||||||
| Cost of leasing equipment | 238000 | |||||||
| Total Cost | 360000 | |||||||
|
|
||||||||
| Fixed Costs per year is divided by 12 to get per month fixed cost | ||||||||
| Variable cost per like wages, steel and tyres are defined but lisence cost varies from units of productions | ||||||||
| Part 3 | Total manufacturing cost of each vehicle | Cost | Unit | Unit | ||||
| 100 | 225 | |||||||
| Plant Management Cost | 122000 | 122000 | 122000 | |||||
| Cost of leasing equipment | 238000 | 238000 | 238000 | |||||
| Wages per vehicle | 800 | 80000 | 180000 | |||||
| Steel | 1000 | 100000 | 225000 | |||||
| Cost of 5 tires (130*5) | 650 | 65000 | 146250 | |||||
| City Lisence | 30000 | 230000 | ||||||
| Total | 635000 | 1141250 | ||||||
| Additional Information | ||||||||
| Per Unit Cost |
Know the answer?
Add Answer to:
|
E2-22 (similar to) Question Help Ocean View Motors specializes in producing one specialty vehicle. It is called Surfer and is styled to easily fit multiple surfboards in its back area and top-mounted storage racks. Ocean View has the following manufacturing costs EEB (Click the icon to view the manufacturing costs.) Requirements 1. What is the variable manufacturing cost per vehicle? What is the fixed manufacturing cost per month? 2. Plot a graph for the variable manufacturing costs and a second...
Specializes in producing one specialty vehicle. It is urtboards in its back area and top-mounted storage racks. 2-27 Variable and Fixed Costs. Consolidated Motors specializes in producing on called Surfer and is styled to easily fit multiple surfboards in its back area and top-mo Consolidated has the following manufacturing costs: Plant management costs, $1,992,000 per year Cost of leasing equipment, $1,932,000 per year Workers' wages, $800 per Surfer vehicle produced Direct materials costs: Steel, $1,400 per Surfer; Tires, $150 per...
An auto manufacturer produces two different versions of a vehicle, Regular and Hybrid, in its plant in Kentucky. Both vehicles use the same kind of tires, and each vehicle requires 5 identical tires (one of which is a spare tire). The purchasing department of the plant uses a (Q, R)-policy to manage the inventory level of the tires. The tires are ordered from an external supplier with a lead time of 3 days. The purchasing departments goal is to limit...
Accelerate Motors assembles and sells motor vehicles and uses standard costing. Actual data relating to April and May 2017 are as follows: E: (Click the icon to view the data.) The selling price per vehicle is $28,000. The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is 600 units. There are no price, efficiency, or spending variances. Any production-volume variance is written off to cost of goods sold in the month in which it...
Accelerate Motors assembles and sells motor vehicles and uses standard costing. Actual data relating to April and May 2017 are as follows: (Click the icon to view the data.) The selling price per vehicle is $27,000. The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is 500 units. There are no price, efficiency, or spending variances. Any production-volume variance is written off to cost of goods sold in the month in which it occurs....
Galvin Motors assembles the fully electric Model S-85 automobile at its Hayward, California, plant. The standard variable manufacturing cost per vehicle in 2017 is $56,600, which consists of: (Click the icon to view the variable cost per vehicle information.) (Click the icon to view additional information.) Galvin started production of the Model S-85 in 2017. The actual production and sales figures for the first three months of the year are: (Click the icon to view the production and sales figures.)...
Race Track Motors assembles and sells motor vehicles and uses standard costing Actual data relating to April and May 2017 are as follows (Click the icon to view the data) The selling price per vehicle is $30,000. The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is 500 units. There are no price, efficiency, or spending variances. Any production volume variance is written off to cost of goods sold in the month in which...
i Requirements 1. Prepare April and May 2017 income statements for FastTrack Motors under (a) variable costing and (b) absorption costing. 2. Prepare a numerical reconciliation and explanation of the difference between operating income for each month under variable costing and absorption costing Print Done FastTrack Motors assembles and sells motor vehicles and uses standard costing. Actual data relating to April and May 2017 are as follows: (Click the icon to view the data.) The selling price per vehicle is...