{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Chapter 11 Cost HW - Saikat Mitra Chapter 11 HW Cost...

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Saikat Mitra Chapter 11 HW Cost Accounting 11-18 1. (b) Special order price per unit $6.00 Variable manufacturing cost per unit 4.50 Contribution margin per unit $1.50 Effect on operating income = $1.50*20,000 units = $30,000 increase 2. (b) Costs of purchases: 20,000 units *$60 = $1,200,000 Total costs of Production: Variable manufacturing costs= $64 – $16= $48 Fixed costs eliminated 9 Costs saved by not making $57 So, total costs saved = $57 *20,000 = $ 1,140,000 Extra costs of purchasing outside 60,000 Minimum overall savings for Reno 25,000 Relevant costs that would have to be saved $ 85,000 11-23 Only Model 14 should be produced. The key to this problem is the relationship of manufacturing overhead to each product. It takes twice as long to produce Model 9. Management should choose the product mix that maximizes operating income for a given production capacity. Model 9 Model 14 Selling price Variable costs per unit (total cost – FMOH) Contribution margin per unit Relative use of machine hours per unit of product Contribution margin per machine hour $100.00 82.00 $ 18.00 ÷ 2 $ 9.00 $70.00 60.50 $ 9.50 ÷ 1 $ 9.50
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
11-37 Per Unit Manufacturing costs: Total Fixed Variable Direct materials $1.00 Direct manufacturing labor
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern