Combination Of Exercises And Problems 5 Total Due Friday Nig

Combination Of Exercises And Problems 5 Total Due Friday Night By 220

Exercise 5: LIFT Elevator Company manufactures small hydroelectric elevators. One of the direct materials used is heavy-duty carpeting for the floor of the elevator. The direct materials quantity standard for May was 6 square yards per elevator. During May, the purchasing agent purchased this carpeting at $20 per square yard; the standard price for the period was $22. Fifty elevators were completed and sold during the month; the Production Department used an average of 6.5 square yards of carpet per elevator. Calculate the company’s direct materials price and quantity variances for carpeting for May.

Exercise 6: Creative Productions manufactured and sold 800 products at $10,000 each during the past year. At the beginning of the year, production had been set at 1,000 products, and direct materials standard had been set at 10 pounds of direct materials at $12 per pound for each product produced. During the year, the company purchased and used 7,900 pounds of direct materials with a cost of $12.02 per pound. Calculate the company’s direct materials price and quantity variances for the year.

Problem 1 - Computing and Using Standard Costs: Modular houses are Homes, Inc.’s specialty. The company’s best-selling model is a three-bedroom, 1,400-square-foot house with an impressive front entrance. Last year, the standard costs for the six basic direct materials used in manufacturing the entrance were as follows: wood framing materials, $2,140; deluxe front door, $480; door hardware, $260; exterior siding, $710; electrical materials, $580; and interior finishing materials, $1,520. Three types of direct labor are used to build the entrance: carpenter, 30 hours at $36 per hour; door specialist, 4 hours at $24 per hour; and electrician, 8 hours at $50 per hour. Last year, the company used an overhead rate of 40 percent of total direct materials cost. This year, the cost of wood framing materials is expected to increase by 20 percent, and a deluxe front door will cost $496. The cost of the door hardware will increase by 10 percent, and the cost of electrical materials will increase by 20 percent. Exterior siding cost should decrease by $15 per unit. The cost of interior material finishing materials is expected to remain the same. The carpenter’s wages will increase by $1 per hour, and the electrician’s wages should increase by $0.50 per hour. The electrician’s wages will increase by $0.50 per hour. Finally, the overhead rate will decrease by 30 percent of total direct materials cost. REQUIRED: Compute the total standard cost of direct materials per entrance for last year. Using your answer to requirement 1, compute the total standard unit cost per entrance for last year. Compute the total standard unit cost per entrance for this year. (Round to the nearest dollar.)

Exercise 9: Web Services, a small company owned by Simon Orozco, provides web page service to small businesses. His services include the preparation of basic pages and custom pages. His company is considering I options for resource allocation and marketing focus based on contribution margins and processing times. The following summary of information will be used to make several short-run decisions for Web Services: Basic Pages, $200 revenue per page, variable costs $77, contribution margin $123, 1 hour design time per page. Custom Pages, $750 revenue per page, variable costs $600, contribution margin $150, 12.5 hours design time per page. Total fixed costs are $78,000 annually. Orozco plans to assign only one designer during July and August, handling 160 basic and 30 custom page orders. Determine which page type Web Services should prioritize based on contribution margin per design hour and resource constraints.

Problem 4: Common Chemical Company’s management is evaluating its product mix to maximize profits. Data for four products are as follows: Product A1, sales $122,000, variable costs $81,200, fixed costs $23,200, units sold 85,000, machine hours 17,000; Product B7, sales $136,000, variable costs $96,400, fixed costs $27,000, units sold 45,000, machine hours 18,000; Product C5, sales $156,400, variable costs $105,400, fixed costs $35,360, units sold 26,000, machine hours 20,800; Product D9, sales $156,400, variable costs $104,400, fixed costs $35,360, units sold 14,000, machine hours 16,800. All products use machine hours fully; compute machine hours needed per unit of each product, contribution margin per machine hour, and identify which product line(s) should be targeted for expansion to maximize profit.

Paper For Above instruction

The assignment requires comprehensive analysis of various managerial accounting scenarios involving standard costing, variances, product mix optimization, and resource allocation decisions. Specifically, it involves calculating variances, standard costs, contribution margins per resource unit, and making strategic recommendations based on quantitative data.

The first exercise involves calculating the direct materials price and quantity variances for LIFT Elevator Company's carpeting purchase in May. This demands assessing the actual purchase price against the standard price and evaluating the usage of materials against the standard quantity. The second exercise extends this to Creative Productions, analyzing materials cost variances based on actual usage and costs over the year, highlighting the significance of variance analysis in controlling costs.

The third problem centers on standard cost calculation for modular houses' entrance components, factoring in anticipated cost changes, wage increases, and overhead rate adjustments. This requires updating historical standard costs with projected changes, to determine current and future standard unit costs accurately, aiding cost control and pricing strategies.

The fourth scenario involves analyzing Web Services' service offerings to determine optimal focus areas considering contribution margins and resource constraints. It underscores the importance of contribution margin per hour or unit when prioritizing products or services to maximize profitability given limited resources.

The final problem involves choosing the optimal product line to expand at Common Chemical Company, based on machine hours per unit and contribution margins per hour. This analysis is crucial for strategic product line prioritization and profit maximization, especially under capacity constraints.

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