Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

3 points Nova Company's total overhead costs for January and February are presented below: Month January February Machine-Hours 60,000 90,000 Total Overhead Costs $170,000 $230,000

3 points Nova Company's total overhead costs for January and February are presented below: Month January February Machine-Hours 60,000 90,000 Total Overhead Costs $170,000 $230,000 Assume that the total overhead costs consists of utilities, supervisory salaries and maintenance. The breakdown of these costs at 60,000 machine-hours is: Utilities (variable) Supervisory salaries (fixed) $48,000 $40,000 Maintenance (mixed) $82,000 Total $170,000 What is the amount of maintenance cost for the month of February? 3 points Nova Company's total overhead costs for January and February are presented below. Month January February Machine-Hours 60,000 90,000 Total Overhead Costs $170,000 $230,000 Assume that 70,000 machine hours are used during the month of March. What would you expect total overhead costs to be for March? (Hint: use the high- low method to determine the "Y-a+bX" cost equation for total overhead costs? Troy Engines manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its engines. including all of the carburetors. An outside supplier has offered to sell one type of carburetor to Troy Engines, for a cost of $40 per unit. To evaluate the offer, Troy Engines has gathered the following information relating to it own cost of producing the carburetor internally. Direct materials Per Unit $18 15,000 Units per year $270,000 Direct labor $12 $180,000 Variable manufacturing overhead $4 $60,000 Fixed manufacturing overhead, $9* $135,000 traceable Fixed manufacturing overhead. $7 $105,000 allocated Total cost $50 $750,000 One-third supervisory salaries; two-thirds depreciation of special equipment (no resale value) What is the relevant cost, per unit, for Troy Engines to produce the carburetor? $43. $37. $34. $50. $40. 6:47 PM 12/14/2020 Troy Engines manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its engines, including all of the carburetors. An outside supplier has offered to sell one type of carburetor to Troy Engines, for a cost of $40 per unit. To evaluate the offer. Troy Engines has gathered the following information to its own cost of producing the carburetor internally: Direct materials Per Unit $18 15,000 Units per year $270,000 Direct labor $12 $180,000 Variable manufacturing overhead $4 $60,000 Fixed manufacturing overhead, $9 $135,000 traceable Fixed manufacturing overhead, $7 $105,000 allocated Total cost $50 $750,000 One-third supervisory salaries; two-thirds depreciation of special equipment (no resale value) If the carburetors were purchased, Troy Engines could use the freed capacity to launch a new product. The segment margin of the new product would be $70,000 per year. Should Troy Engines purchase the carburetors? No, as net operating income would decrease by $45,000. Yes, as net operating income would increase by $25,000. No, as net operating income would decrease by $25,000. Yes, as net operating income would increase by $45,000. Yes, as net operating income would increase by $70,000. 6:48 PM 12/14/0020image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Information Systems Controls And Processes

Authors: Leslie Turner, Andrea B. Weickgenannt

1st Edition

0471479519, 9780471479512

More Books

Students also viewed these Accounting questions