| a-1 . | A large discount store has approached the owner of Lang about buying 7,000 calculators. It would replace The Math Machines label with its own logo to avoid affecting Langs existing customers. Because the offer was made directly to the owner, no sales commissions on the transaction would be involved, but the discount store is willing to pay only $5.80 per calculator. Calculate the contribution margin from the special order. (Negative amount should be indicated by a minus sign.) CONTRIBUTION MARGIN(OR LOSS) ( ) | Lang has an opportunity to buy the 47,000 calculators it currently makes from a reliable competing manufacturer for $6.50 each. The product meets Langs quality standards. Lang could continue to use its own logo, advertising program, and sales force to distribute the products. Should Lang buy the calculators or continue to make them? | Calculate the total cost for Lang to make and buy the 47,000 calculators. MAKE BUY TOTAL COST ( ) ( ) | Should Lang buy the calculators or continue to make them, if the volume of sales were increased to 74,000 units? Calculate the contribution to profit from operating the calculator division. (Negative amount should be indicated by a minus sign.) CONTRIBUTION TO PROFIT (LOSS) ( ) Allocating costs among products 12 LO 12-3 | Longman Construction Company expects to build three new homes during a specific accounting period. The estimated direct materials and labor costs are as follows. | | Expected Costs | Home 1 | Home 2 | Home 3 | | Direct labor | $ | 70,000 | | $ | 94,000 | | $ | 187,000 | | | Direct materials | | 91,000 | | | 136,000 | | | 199,000 | | | | | Assume Longman needs to allocate two major overhead costs ($38,610 of employee fringe benefits and $29,820 of indirect materials costs) among the three jobs. | | Required | | Choose an appropriate cost driver for each of the overhead costs and determine the total cost of each house. (Round "Allocation rate" to 3 decimal places.) | FRINGE BENEFITS: HOUSE ALLOCATION RATE x WEIGHT OF BASE = ALLOCATED COST 1 ______________ x _______________ = ________________ 2 ______________ x _______________ = _______________ 3 ______________ x _______________ = ________________ INDIRECT MATERIALS: | A large discount store has approached the owner of Lang about buying 7,000 calculators. It would replace The Math Machines label with its own logo to avoid affecting Langs existing customers. Because the offer was made directly to the owner, no sales commissions on the transaction would be involved, but the discount store is willing to pay only $5.80 per calculator. Calculate the contribution margin from the special order. (Negative amount should be indicated by a minus sign.) CONTRIBUTION MARGIN(OR LOSS) ( ) | Lang has an opportunity to buy the 47,000 calculators it currently makes from a reliable competing manufacturer for $6.50 each. The product meets Langs quality standards. Lang could continue to use its own logo, advertising program, and sales force to distribute the products. Should Lang buy the calculators or continue to make them? | Calculate the total cost for Lang to make and buy the 47,000 calculators. MAKE BUY TOTAL COST ( ) ( ) | Should Lang buy the calculators or continue to make them, if the volume of sales were increased to 74,000 units? Calculate the contribution to profit from operating the calculator division. (Negative amount should be indicated by a minus sign.) CONTRIBUTION TO PROFIT (LOSS) ( ) Allocating costs among products 12 LO 12-3 | Longman Construction Company expects to build three new homes during a specific accounting period. The estimated direct materials and labor costs are as follows. | | Expected Costs | Home 1 | Home 2 | Home 3 | | Direct labor | $ | 70,000 | | $ | 94,000 | | $ | 187,000 | | | Direct materials | | 91,000 | | | 136,000 | | | 199,000 | | | | | Assume Longman needs to allocate two major overhead costs ($38,610 of employee fringe benefits and $29,820 of indirect materials costs) among the three jobs. | | Required | | Choose an appropriate cost driver for each of the overhead costs and determine the total cost of each house. (Round "Allocation rate" to 3 decimal places.) | FRINGE BENEFITS: HOUSE ALLOCATION RATE x WEIGHT OF BASE = ALLOCATED COST 1 ______________ x _______________ = ________________ 2 ______________ x _______________ = _______________ 3 ______________ x _______________ = ________________ | | | | A large discount store has approached the owner of Lang about buying 7,000 calculators. It would replace The Math Machines label with its own logo to avoid affecting Langs existing customers. Because the offer was made directly to the owner, no sales commissions on the transaction would be involved, but the discount store is willing to pay only $5.80 per calculator. Calculate the contribution margin from the special order. (Negative amount should be indicated by a minus sign.) CONTRIBUTION MARGIN(OR LOSS) ( ) | Lang has an opportunity to buy the 47,000 calculators it currently makes from a reliable competing manufacturer for $6.50 each. The product meets Langs quality standards. Lang could continue to use its own logo, advertising program, and sales force to distribute the products. Should Lang buy the calculators or continue to make them? | Calculate the total cost for Lang to make and buy the 47,000 calculators. MAKE BUY TOTAL COST ( ) ( ) | Should Lang buy the calculators or continue to make them, if the volume of sales were increased to 74,000 units? Calculate the contribution to profit from operating the calculator division. (Negative amount should be indicated by a minus sign.) CONTRIBUTION TO PROFIT (LOSS) ( ) Allocating costs among products 12 LO 12-3 | Longman Construction Company expects to build three new homes during a specific accounting period. The estimated direct materials and labor costs are as follows. | | Expected Costs | Home 1 | Home 2 | Home 3 | | Direct labor | $ | 70,000 | | $ | 94,000 | | $ | 187,000 | | | Direct materials | | 91,000 | | | 136,000 | | | 199,000 | | | | | Assume Longman needs to allocate two major overhead costs ($38,610 of employee fringe benefits and $29,820 of indirect materials costs) among the three jobs. | | Required | | Choose an appropriate cost driver for each of the overhead costs and determine the total cost of each house. (Round "Allocation rate" to 3 decimal places.) | FRINGE BENEFITS: HOUSE ALLOCATION RATE x WEIGHT OF BASE = ALLOCATED COST 1 ______________ x _______________ = ________________ 2 ______________ x _______________ = _______________ 3 ______________ x _______________ = ________________ | | INDIRECT MATERIALS: | A large discount store has approached the owner of Lang about buying 7,000 calculators. It would replace The Math Machines label with its own logo to avoid affecting Langs existing customers. Because the offer was made directly to the owner, no sales commissions on the transaction would be involved, but the discount store is willing to pay only $5.80 per calculator. Calculate the contribution margin from the special order. (Negative amount should be indicated by a minus sign.) CONTRIBUTION MARGIN(OR LOSS) ( ) | Lang has an opportunity to buy the 47,000 calculators it currently makes from a reliable competing manufacturer for $6.50 each. The product meets Langs quality standards. Lang could continue to use its own logo, advertising program, and sales force to distribute the products. Should Lang buy the calculators or continue to make them? | Calculate the total cost for Lang to make and buy the 47,000 calculators. MAKE BUY TOTAL COST ( ) ( ) | Should Lang buy the calculators or continue to make them, if the volume of sales were increased to 74,000 units? Calculate the contribution to profit from operating the calculator division. (Negative amount should be indicated by a minus sign.) CONTRIBUTION TO PROFIT (LOSS) ( ) Allocating costs among products 12 LO 12-3 | Longman Construction Company expects to build three new homes during a specific accounting period. The estimated direct materials and labor costs are as follows. | | Expected Costs | Home 1 | Home 2 | Home 3 | | Direct labor | $ | 70,000 | | $ | 94,000 | | $ | 187,000 | | | Direct materials | | 91,000 | | | 136,000 | | | 199,000 | | | | | Assume Longman needs to allocate two major overhead costs ($38,610 of employee fringe benefits and $29,820 of indirect materials costs) among the three jobs. | | Required | | Choose an appropriate cost driver for each of the overhead costs and determine the total cost of each house. (Round "Allocation rate" to 3 decimal places.) | FRINGE BENEFITS: HOUSE ALLOCATION RATE x WEIGHT OF BASE = ALLOCATED COST 1 ______________ x _______________ = ________________ 2 ______________ x _______________ = _______________ 3 ______________ x _______________ = ________________ INDIRECT MATERIALS: | A large discount store has approached the owner of Lang about buying 7,000 calculators. It would replace The Math Machines label with its own logo to avoid affecting Langs existing customers. Because the offer was made directly to the owner, no sales commissions on the transaction would be involved, but the discount store is willing to pay only $5.80 per calculator. Calculate the contribution margin from the special order. (Negative amount should be indicated by a minus sign.) CONTRIBUTION MARGIN(OR LOSS) ( ) | Lang has an opportunity to buy the 47,000 calculators it currently makes from a reliable competing manufacturer for $6.50 each. The product meets Langs quality standards. Lang could continue to use its own logo, advertising program, and sales force to distribute the products. Should Lang buy the calculators or continue to make them? | Calculate the total cost for Lang to make and buy the 47,000 calculators. MAKE BUY TOTAL COST ( ) ( ) | Should Lang buy the calculators or continue to make them, if the volume of sales were increased to 74,000 units? Calculate the contribution to profit from operating the calculator division. (Negative amount should be indicated by a minus sign.) CONTRIBUTION TO PROFIT (LOSS) ( ) Allocating costs among products 12 LO 12-3 | Longman Construction Company expects to build three new homes during a specific accounting period. The estimated direct materials and labor costs are as follows. | | Expected Costs | Home 1 | Home 2 | Home 3 | | Direct labor | $ | 70,000 | | $ | 94,000 | | $ | 187,000 | | | Direct materials | | 91,000 | | | 136,000 | | | 199,000 | | | | | Assume Longman needs to allocate two major overhead costs ($38,610 of employee fringe benefits and $29,820 of indirect materials costs) among the three jobs. | | Required | | Choose an appropriate cost driver for each of the overhead costs and determine the total cost of each house. (Round "Allocation rate" to 3 decimal places.) | FRINGE BENEFITS: HOUSE ALLOCATION RATE x WEIGHT OF BASE = ALLOCATED COST 1 ______________ x _______________ = ________________ 2 ______________ x _______________ = _______________ 3 ______________ x _______________ = ________________ | | | | A large discount store has approached the owner of Lang about buying 7,000 calculators. It would replace The Math Machines label with its own logo to avoid affecting Langs existing customers. Because the offer was made directly to the owner, no sales commissions on the transaction would be involved, but the discount store is willing to pay only $5.80 per calculator. Calculate the contribution margin from the special order. (Negative amount should be indicated by a minus sign.) CONTRIBUTION MARGIN(OR LOSS) ( ) | Lang has an opportunity to buy the 47,000 calculators it currently makes from a reliable competing manufacturer for $6.50 each. The product meets Langs quality standards. Lang could continue to use its own logo, advertising program, and sales force to distribute the products. Should Lang buy the calculators or continue to make them? | Calculate the total cost for Lang to make and buy the 47,000 calculators. MAKE BUY TOTAL COST ( ) ( ) | Should Lang buy the calculators or continue to make them, if the volume of sales were increased to 74,000 units? Calculate the contribution to profit from operating the calculator division. (Negative amount should be indicated by a minus sign.) CONTRIBUTION TO PROFIT (LOSS) ( ) Allocating costs among products 12 LO 12-3 | Longman Construction Company expects to build three new homes during a specific accounting period. The estimated direct materials and labor costs are as follows. | | Expected Costs | Home 1 | Home 2 | Home 3 | | Direct labor | $ | 70,000 | | $ | 94,000 | | $ | 187,000 | | | Direct materials | | 91,000 | | | 136,000 | | | 199,000 | | | | | Assume Longman needs to allocate two major overhead costs ($38,610 of employee fringe benefits and $29,820 of indirect materials costs) among the three jobs. | | Required | | Choose an appropriate cost driver for each of the overhead costs and determine the total cost of each house. (Round "Allocation rate" to 3 decimal places.) | FRINGE BENEFITS: HOUSE ALLOCATION RATE x WEIGHT OF BASE = ALLOCATED COST 1 ______________ x _______________ = ________________ 2 ______________ x _______________ = _______________ 3 ______________ x _______________ = ________________ INDIRECT MATERIALS: HOUSE ALLOCATION RATE x WEIGHT OF BASE = ALLOCATED COST 1 ________________ x _______________ = ______________ 2 ________________ x _______________ = ______________ 3 ________________ x _______________ = ______________ THE COST OF THE COMPONENTS TO DETERMINE THE TOTAL COST OF EACH HOUSE: EXPECTED COSTS HOME 1 HOME 2 HOME 3 TOTAL DIRECT LABOR ________ __________ _________ ____________ DIRECT MATERIALS _______ ___________ __________ ____________ FRINGE BENEFITS ________ ___________ ___________ ____________ INDIRECT MATERIALS ________ ___________ ___________ ____________ TOTAL COST _________ ___________ ___________ _____________ | | | |
