Академический Документы
Профессиональный Документы
Культура Документы
SOLUTIONS TO PROBLEMS
PROBLEM 14-46 (25 MINUTES)
1.
Food
Blender Processor
Unit cost if purchased from an outside supplier .............................. $60
$114
Incremental unit cost if manufactured:
Direct material ................................................................................... $18
$ 33
12
27
Direct labor ........................................................................................
Variable overhead
18
$48 $30 per hour fixed ...............................................................
$96 (2)($30 per hour fixed) ........................................................
36
$ 96
Total ................................................................................................ $48
Unit cost savings if manufactured ..................................................... $12
$ 18
1
2
Machine hours required per unit ........................................................
Cost savings per machine hour if manufactured
$12 1 hour ...................................................................................... $12
$18 2 hours ....................................................................................
$ 9
Therefore, each machine hour devoted to the production of blenders saves the
company more than a machine hour devoted to food processor production.
McGraw-Hill/Irwin
Managerial Accounting, 6/e
2.
50,000
20,000
30,000
15,000
If the companys management team is able to reduce the direct material cost per
food processor to $18 ($15 less than previously assumed), then the cost savings
from manufacturing a food processor are $33 per unit ($18 savings computed in
requirement (1) plus $15 reduction in material cost):
Food
Blender Processor
$12.00
$33.00
1 MH
2 MH
$12.00
$16.50
Therefore, devote all 50,000 hours to the production of 25,000 food processors.
Conclusion:
Manufacture: 25,000 food processors
Purchase: 3,000 food processors
Purchase: 20,000 blenders
PROBLEM 14-47 (25 MINUTES)
1.
$ 45,000
9,000
$ 54,000
$ 3,000
600
24,000
12,000
$ 39,600
$ 14,400
McGraw-Hill/Irwin
14-2
2.
3.
$144,000
75,000
$ 69,000
$156,000
144,000
$ 12,000
McGraw-Hill/Irwin
Managerial Accounting, 6/e
Cost of
10,000 Unit
Assembly Run Per Unit
$ 180,000
$ 18
450,000
45
45
450,000
$1,080,000
$108
Enhanced
$375.00
$42.00
22.50
36.00
37.50
$495.00
$67.50
30.00
48.00
138.00
$237.00
49.50
195.00
$300.00
2.
3.
Martinez, Inc. expects to sell 10,000 Standard units (40,000 units x 25%) or 8,000
Enhanced units (40,000 units x 20%). On the basis of this sales forecast, the
company would be advised to select the Standard model.
4.
Standard
Enhanced
$2,400,000
300,000
$2,100,000
McGraw-Hill/Irwin
14-4
Yes, the order should be accepted because it generates a profit of $68,100 for the
firm. Note: The fixed administrative cost is irrelevant to the decision, because this
cost will be incurred regardless of whether Mercury accepts or rejects the order.
Selling price
Less: Direct material ($16.40 - $4.20)...
Direct labor..
Variable manufacturing overhead
(.5 hours x $15.00*)..
Unit contribution margin.
Total contribution margin (11,000 units x $7.30)..
Less: Additional setup costs
Special device.
Net contribution to profit.
$31.50
$12.20
4.50
7.50
24.20
$ 7.30
$80,300
$7,400
4,800
12,200
$68,100
No, Mercury lacks adequate machine capacity to manufacture the entire order.
Planned machine hours (5,000 hours x 3 months) 15,000
Current usage (15,000 hours x 70%).. 10,500
Available hours 4,500
Required machine hours (11,000 units x .5 hours)
3.
5,500
McGraw-Hill/Irwin
Managerial Accounting, 6/e