Answered step by step
Verified Expert Solution
Question
1 Approved Answer
1) The Smart Company has been in business for 10 years and is located in Toronto, Ontario. The company manufactures two products, blenders and radios.
1) The Smart Company has been in business for 10 years and is located in
Toronto, Ontario.
The company manufactures two products, blenders and radios. The company
has estimated its overhead in their inspection department to be $240,000. The
company produces 60,000 blenders and 80,000 radios each year. Blender
production requires 20,000 machine hours, radio production requires 30,000
machine hours. The company completes 120 inspections per year, 40
inspections for blenders and the remainder for radios.
Calculate how much of the inspection overhead should be allocated to blenders
and radios? If there is a difference in the allocated overhead, explain why.
2) The Smart Company has been in business for 10 years and is located in
Toronto, Ontario.
The Smart Company has the following financial data:
Total sales are $500,000
5.000 units were sold
The unit variable cost is $60
The fixed costs are $400,000 for manufacturing and $100,000 for selling
Calculate the Contribution Margin per unit, the break even in units and the break
even in sales, the net income or loss if only 10,000 units are sold. Explain, will
the unit cost for variable and fixed change with the change in the total number of
units manufactured.
3) The Light Company is a company located in Toronto, Ontario. The company
manufactures Light Fixtures.
The unit cost is $6 for direct material, $10 for direct labour, and $4 for other
variable costs. The total fixed costs are $200,000 for the 8,000 units that are
produced. A one time special order from the ABC company to purchase 2,000
light fixtures at $24 each is received. The company has sufficient unused
capacity to fulfill this special order.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started