The Charlotte Corporation manufactures filing cabinets in two operations: machining and finishing. It provides the following...
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The Charlotte Corporation manufactures filing cabinets in two operations: machining and finishing. It provides the following information: (Click the icon to view the department information.) Each cabinet sells for $80 and has direct material costs of $35 incurred at the start of the machining operation. Charlotte has no other variable costs. Charlotte can sell whatever output it produces. The following requirements refer only to the preceding data. There is no connection between the requirements. Read the requirements. - X Requirement 1. Charlotte is considering using some modern jigs and tools in the finishing operation t Producing 1,200 more units will generate contribution (throughput) margin and operating incor Select the formula, then enter the amounts to calculate the change in throughput contribution. Should Charlotte acquire these tools? The Therefore, Charlotte in throughput contribution margin is implement the new design. Data table = Change in throughpu contribution Annual capacity Annual production Fixed operating costs (excluding direct materials) Fixed operating costs per unit produced ($2,240,000 160,000; $1,920,000 160,000) Machining 180,000 units 160,000 units $2,240,000 Finishing 160,000 units 160,000 units $1,920,000 $14 per unit $12 per unit the incremental costs by Requirement 2. The production manager of the Machining Department has submitted a proposal to d Increasing its capacity further increas Print Done Requirement 3. An outside contractor offers to do the finishing operation for 18,000 units at $24 per unit, double the $12 per unit that it costs Charlotte to do the finishing in-house. Should Charlotte accept the subcont Select the formula you will use to calculate the change in throughput contribution. Then, enter the amounts in the formula and calculate the change in throughput contribution. = Change in throughput contribution Charlotte contract with an outside contractor to do 18 000 units of finishing at $24 ner unit because the Requirements 1. Charlotte is considering using some modern jigs and tools in the finishing operation that would increase annual finishing output by 1,200 units. The annual cost of these jigs and tools is $20,000. Should Charlotte acquire these tools? Show your calculations. 2. The production manager of the Machining Department has submitted a proposal to do faster setups that would increase the annual capacity of the Machining Department by 12,500 units and would cost $28,000 per year. Should Charlotte implement the change? Show your calculations. 3. An outside contractor offers o do the finishing operation for 18,000 units at $24 per unit, double the $12 per unit that it costs Charlotte to do the finishing in-house. Should Charlotte accept the subcontractor's offer? Show your calculations. 4. The Harley Corporation offers to machine 5,600 units at $7 per unit, half the $14 per unit that it costs Charlotte to do the machining in-house. Should Charlotte accept Harley's offer? Show your calculations. 5. Charlotte produces 2,400 defective units at the machining operation. What is the cost to Charlotte of the defective items produced? Explain your answer briefly. 6. Charlotte produces 2,400 defective units at the finishing operation. What is the cost to Charlotte of the defective items produced? Explain your answer briefly. Print Done The Charlotte Corporation manufactures filing cabinets in two operations: machining and finishing. It provides the following information: (Click the icon to view the department information.) Each cabinet sells for $80 and has direct material costs of $35 incurred at the start of the machining operation. Charlotte has no other variable costs. Charlotte can sell whatever output it produces. The following requirements refer only to the preceding data. There is no connection between the requirements. Read the requirements. - X Requirement 1. Charlotte is considering using some modern jigs and tools in the finishing operation t Producing 1,200 more units will generate contribution (throughput) margin and operating incor Select the formula, then enter the amounts to calculate the change in throughput contribution. Should Charlotte acquire these tools? The Therefore, Charlotte in throughput contribution margin is implement the new design. Data table = Change in throughpu contribution Annual capacity Annual production Fixed operating costs (excluding direct materials) Fixed operating costs per unit produced ($2,240,000 160,000; $1,920,000 160,000) Machining 180,000 units 160,000 units $2,240,000 Finishing 160,000 units 160,000 units $1,920,000 $14 per unit $12 per unit the incremental costs by Requirement 2. The production manager of the Machining Department has submitted a proposal to d Increasing its capacity further increas Print Done Requirement 3. An outside contractor offers to do the finishing operation for 18,000 units at $24 per unit, double the $12 per unit that it costs Charlotte to do the finishing in-house. Should Charlotte accept the subcont Select the formula you will use to calculate the change in throughput contribution. Then, enter the amounts in the formula and calculate the change in throughput contribution. = Change in throughput contribution Charlotte contract with an outside contractor to do 18 000 units of finishing at $24 ner unit because the Requirements 1. Charlotte is considering using some modern jigs and tools in the finishing operation that would increase annual finishing output by 1,200 units. The annual cost of these jigs and tools is $20,000. Should Charlotte acquire these tools? Show your calculations. 2. The production manager of the Machining Department has submitted a proposal to do faster setups that would increase the annual capacity of the Machining Department by 12,500 units and would cost $28,000 per year. Should Charlotte implement the change? Show your calculations. 3. An outside contractor offers o do the finishing operation for 18,000 units at $24 per unit, double the $12 per unit that it costs Charlotte to do the finishing in-house. Should Charlotte accept the subcontractor's offer? Show your calculations. 4. The Harley Corporation offers to machine 5,600 units at $7 per unit, half the $14 per unit that it costs Charlotte to do the machining in-house. Should Charlotte accept Harley's offer? Show your calculations. 5. Charlotte produces 2,400 defective units at the machining operation. What is the cost to Charlotte of the defective items produced? Explain your answer briefly. 6. Charlotte produces 2,400 defective units at the finishing operation. What is the cost to Charlotte of the defective items produced? Explain your answer briefly. Print Done
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Cost Accounting A Managerial Emphasis
ISBN: 978-0133392883
6th Canadian edition
Authors: Horngren, Srikant Datar, George Foster, Madhav Rajan, Christ
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