Gallerani Corporation has received a request for a special orderof 5,400 units of product A90 for $28.40 each. Product A90's unitproduct cost is $27.85, determined as follows:
| |
| Direct materials | $ | 3.30 | |
| Direct labor | | 8.60 | |
| Variable manufacturing overhead | | 7.70 | |
| Fixed manufacturing overhead | | 8.25 | |
| Unit product cost | $ | 27.85 | |
|
Assume that direct labor is a variable cost. The special orderwould have no effect on the company's total fixed manufacturingoverhead costs. The customer would like modifications made toproduct A90 that would increase the variable costs by $4.70 perunit and that would require an investment of $14,000 in specialmolds that would have no salvage value. This special order wouldhave no effect on the company's other sales. The company has amplespare capacity for producing the special order. The annualfinancial advantage (disadvantage) for the company as a result ofaccepting this special order should be:
Multiple Choice
$(36,410)
$8,140
$2,970
$(98,550)
Bruce Corporation makes four products in a single facility.These products have the following unit product costs:
| Products |
| A | B | C | D |
| Direct materials | $ | 13.70 | $ | 9.60 | $ | 10.40 | $ | 10.00 |
| Direct labor | | 18.80 | | 26.80 | | 33.00 | | 39.80 |
| Variable manufacturing overhead | | 3.70 | | 2.10 | | 2.00 | | 2.60 |
| Fixed manufacturing overhead | | 25.90 | | 34.20 | | 26.00 | | 36.60 |
| Unit product cost | $ | 62.10 | $ | 72.70 | $ | 71.40 | $ | 89.00 |
|
Additional data concerning these products are listed below.
| Products |
| A | B | C | D |
| Grinding minutes per unit | | 3.20 | | 4.40 | | 3.70 | | 2.80 |
| Selling price per unit | $ | 75.50 | $ | 92.90 | $ | 86.80 | $ | 103.60 |
| Variable selling cost per unit | $ | 1.60 | $ | 0.60 | $ | 2.70 | $ | 1.00 |
| Monthly demand in units | | 3,400 | | 3,400 | | 2,400 | | 2,600 |
|
The grinding machines are potentially the constraint in theproduction facility. A total of 53,100 minutes are available permonth on these machines.
Direct labor is a variable cost in this company.
How many minutes of grinding machine time would be required tosatisfy demand for all four products?
Multiple Choice
Bruce Corporation makes four products in a single facility.These products have the following unit product costs:
| Products |
| A | B | C | D |
| Direct materials | $ | 15.90 | $ | 19.80 | $ | 12.80 | $ | 15.50 |
| Direct labor | | 17.90 | | 21.30 | | 15.70 | | 9.70 |
| Variable manufacturing overhead | | 4.70 | | 5.90 | | 8.40 | | 5.40 |
| Fixed manufacturing overhead | | 27.80 | | 14.70 | | 14.80 | | 16.80 |
| Unit product cost | | 66.30 | | 61.70 | | 51.70 | | 47.40 |
|
Additional data concerning these products are listed below.
| Products |
| A | B | C | D |
| Grinding minutes per unit | | 2.15 | | 1.25 | | 0.85 | | 0.45 |
| Selling price per unit | $ | 80.20 | $ | 72.60 | $ | 69.40 | $ | 64.10 |
| Variable selling cost per unit | $ | 2.90 | $ | 3.40 | $ | 3.10 | $ | 3.80 |
| Monthly demand in units | 3,300 | 2,300 | 2,300 | 4,300 |
|
The grinding machines are potentially the constraint in theproduction facility. A total of 10,500 minutes are available permonth on these machines.
Direct labor is a variable cost in this company.
Which product makes the MOST profitable use of the grindingmachines? (Round your intermediate calculations to 2decimal places.)
Multiple Choice
Product B
Product A
Product C
Product D
Bruce Corporation makes four products in a single facility.These products have the following unit product costs:
| Products |
| A | B | C | D |
| Direct materials | $ | 15.30 | $ | 11.20 | $ | 12.00 | $ | 11.60 |
| Direct labor | | 20.40 | | 28.40 | | 34.60 | | 41.40 |
| Variable manufacturing overhead | | 5.30 | | 3.70 | | 3.60 | | 4.20 |
| Fixed manufacturing overhead | | 27.50 | | 35.80 | | 27.60 | | 38.20 |
| Unit product cost | | 68.50 | | 79.10 | | 77.80 | | 95.40 |
|
Additional data concerning these products are listed below.
| Products |
| A | B | C | D |
| Grinding minutes per unit | | 4.80 | | 6.30 | | 5.30 | | 4.40 |
| Selling price per unit | $ | 77.10 | $ | 94.50 | $ | 88.40 | $ | 105.20 |
| Variable selling cost per unit | $ | 3.20 | $ | 2.20 | $ | 4.30 | $ | 2.60 |
| Monthly demand in units | | 5,000 | | 5,000 | | 4,000 | | 3,000 |
|
The grinding machines are potentially the constraint in theproduction facility. A total of 89,600 minutes are available permonth on these machines.
Direct labor is a variable cost in this company.
Up to how much should the company be willing to pay for oneadditional minute of grinding machine time if the company has madethe best use of the existing grinding machine capacity?(Round your intermediate calculations to 2 decimalplaces.) 1_04_2014_QC_58425, 11_17_2014_QC_58425,Garrison16e Rechecks 2017-09-13
Multiple Choice
