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Managerial 13e Ch 12 HW

# Managerial 13e Ch 12 HW - Cost Accounting 13 edition...

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Cost Accounting 13 edition CHAPTER 12 18, 19, 23, 26, 32, 34, and 37 Not on My Accounting Lab 12-18 Short-run pricing, capacity constraints. 1. Per kilogram of hard cheese: Milk (10 liters \$1.50 per liter) \$15 Direct manufacturing labor 5 Variable manufacturing overhead 3 Fixed manufacturing cost allocated 6 Total manufacturing cost \$29 If Vermont Hills can get all the Holstein milk it needs, and has sufficient production capacity, then, the minimum price per kilo it should charge for the hard cheese is the variable cost per kilo = \$15+5+3 = \$23 per kilo. 2. If milk is in short supply, then each kilo of hard cheese displaces 2.5 kilos of soft cheese (10 liters of milk per kilo of hard cheese versus 4 liters of milk per kilo of soft cheese). Then, for the hard cheese, the minimum price Vermont should charge is the variable cost per kilo of hard cheese plus the contribution margin from 2.5 kilos of soft cheese, or, \$23 + (2.5 \$8 per kilo) = \$43 per kilo That is, if milk is in short supply, Vermont should not agree to produce any hard cheese unless the buyer is willing to pay at least \$43 per kilo.

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(b) Working with suppliers to reduce materials procurement and inspection costs by

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Managerial 13e Ch 12 HW - Cost Accounting 13 edition...

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