Cathy and Tom's Specialty Ice Cream Company operates a small production facility for the local community. The facility has the capacity to make 25,200 gallons of the single flavor, GUI Chewy, annually. The plant has only two customers, Chuck's Gas & Go and Marcee's Drive & Chew DriveThru. Annual orders for Chuck's total 12,600 gallons and annual orders for Marcee's total 6,300 gallons. Variable manufacturing costs are $1.20 per gallon, and annual fixed manufacturing costs are $31,500. The ice cream business has two seasons, summer and winter. Each season lasts exactly six months. Chuck's orders 6,300 gallons in the summer and 6,300 gallons in the winter. Marcee's is closed in the winter and orders all 6,300 gallons in the summer. Required: a. Calculate the product cost for each season with excess capacity costs assigned to season in which it is incurred. (Round your intermediate calculations and final answers to 2 decimal places.) winter per gallon summer per gallon b. Calculate the product cost for each season with excess capacity costs assigned to the season requiring it. (Round your intermediate calculations and final answers to 2 decimal places.) winter per gallon summer per gallon
Explanations are provided for calaculating fixed manufacturing overhead in every case. Answers are at the end of every explanation.
Cathy and Tom's Specialty Ice Cream Company operates a small production facility for the local community....
Cathy and Tom's Specialty Ice Cream Company operates a small production facility for the local community. The facility has the capacity to make 25,200 gallons of the single flavor, GUI Chewy, annually. The plant has only two customers, Chuck's Gas & Go and Marcee's Drive & Chew DriveThru. Annual orders for Chuck's total 12,600 gallons and annual orders for Marcee's total 6,300 gallons. Variable manufacturing costs are $1.20 per gallon, and annual fixed manufacturing costs are $31,500. The ice cream...
Cathy and Tom's Specialty Ice Cream Company operates a small
production facility for the local community. The facility has the
capacity to make 18,000 gallons of the single flavor, GUI Chewy,
annually. The plant has only two customers, Chuck's Gas & Go
and Marcee's Drive & Chew DriveThru. Annual orders for Chuck's
total 9,000 gallons and annual orders for Marcee's total 4,500
gallons. Variable manufacturing costs are $.60 per gallon, and
annual fixed manufacturing costs are $27,000.
07 Cathy and...
Cathy and Tom's Specialty Ice Cream Company operates a small
production facility for the local community. The facility has the
capacity to make 18,000 gallons of the single flavor, GUI Chewy,
annually. The plant has only two customers, Chuck's Gas & Go
and Marcee's Drive & Chew DriveThru. Annual orders for Chuck's
total 9,000 gallons and annual orders for Marcee's total 4,500
gallons. Variable manufacturing costs are $.60 per gallon, and
annual fixed manufacturing costs are $27,000.
07 Cathy and...
Cathy and Tom's Specialty Ice Cream Company operates a small production facility for the local community. The facility has the capacity to make 16,400 gallons of the single flavor, GUI Chewy, annually. The plant has only two customers, Chuck's Gas & Go and Marcee's Drive & Chew DriveThru. Annual orders for Chuck's total 9,500 gallons and annual orders for Marcee's total 3,800 gallons. Variable manufacturing costs are $0.90 per gallon, and annual fixed manufacturing costs are $24,500. Required: What cost...
Mercia Chocolates produces gourmet chocolate products with no preservatives. Any production must be sold within a few days, so producing for inventory is not an option. Mercia's single plant has the capacity to make 93,000 packages of chocolate annually. Currently, Mercia sells to only two customers: Vern's Chocolates (a specialty candy store chain) and Mega Stores (a chain of department stores). Vern's orders 51,600 packages and Mega Stores orders 18,000 packages annually. Variable manufacturing costs are $16 per package, and...
Mercia Chocolates produces gourmet chocolate products with no preservatives. Any production must be sold within a few days, so producing for inventory is not an option. Mercia’s single plant has the capacity to make 97,200 packages of chocolate annually. Currently, Mercia sells to only two customers: Vern’s Chocolates (a specialty candy store chain) and Mega Stores (a chain of department stores). Vern’s orders 48,600 packages and Mega Stores orders 17,000 packages annually. Variable manufacturing costs are $14 per package, and...
Mercia Chocolates produces gourmet chocolate products with no preservatives. Any production must be sold within a few days, so producing for inventory is not an option. Mercia’s single plant has the capacity to make 97,200 packages of chocolate annually. Currently, Mercia sells to only two customers: Vern’s Chocolates (a specialty candy store chain) and Mega Stores (a chain of department stores). Vern’s orders 48,600 packages and Mega Stores orders 17,000 packages annually. Variable manufacturing costs are $14 per package, and...
Mercia Chocolates produces gourmet chocolate products with no preservatives. Any production must be sold within a few days, so producing for inventory is not an option. Mercia’s single plant has the capacity to make 97,200 packages of chocolate annually. Currently, Mercia sells to only two customers: Vern’s Chocolates (a specialty candy store chain) and Mega Stores (a chain of department stores). Vern’s orders 48,600 packages and Mega Stores orders 17,000 packages annually. Variable manufacturing costs are $14 per package, and...
Mercia Chocolates produces gourmet chocolate products with no preservatives. Any production must be sold within a few days, so producing for inventory is not an option. Mercia’s single plant has the capacity to make 95,500 packages of chocolate annually. Currently, Mercia sells to only two customers: Vern’s Chocolates (a specialty candy store chain) and Mega Stores (a chain of department stores). Vern’s orders 57,100 packages and Mega Stores orders 20,500 packages annually. Variable manufacturing costs are $21 per package, and...