Big Fork Lumber Company incurs a cost of $450 per hundred board feet (hbf) in processing certain rough cut lumber, which it sells for $606 per hbf An alternative is to produce a finished cut at a total processing cost of $543 per hbf, which can be sold for $737 per hbf Required 1 Prepare a differential analysisdated August 9 on whether to sell rough cut lumber (Alternative 1) or process further into finished cut lumber (Alternative 2) Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries Be sure to complete the statement heading For those boxes in which you must enter subtracted or negative numbers use a minus sign If there is no amount or an amount is zero, enter 0 A colon ( ) will automatically appear if required 2 Determine whether the company should sell rough cut lumber (Alternative 1) or process further into finished cut lumber (Alternative 2) Labelsand Amount Descriptions August 9 Costs, per 100 board ft Income (Loss), per 100 board ft Revenues, per 100 board ft 2 Determine whether to sell rough cut lumber (Alternative 1) or process further into finished cut lumber (Alternative 2) Sell rough cut lumber The company is indifferent since the result is the same regardless of which alternative is chosen Process further and sell finished cut lumber Homestead Jeans Co has an annual plant capacity of 65,000 units, and current production is 45,000 units Monthly fixed costs are $54,000, and variable costs are $29 per unit The present selling price is $42 per unit On November 12 of the current year, the company received an offer from Dawkins Company for 18,000 units of the product at $32 each Dawkins Company will market the units in a foreign country under its own brand name The additional business is not expected to affect the domestic selling price or quantity of sales of Homestead Jeans Co Required A Prepare a differential analysisdated November 12 on whether to reject (Alternative 1) or accept (Alternative 2) the Dawkins order Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries Be sure to complete the statement heading For those boxes in which you must enter subtracted or negative numbers use a minus sign If there is no amount or an amount is zero, enter 0 A colon ( ) will automatically appear if required B Briefly explain why accepting this additional business will increase operating income C What is the minimum price per unit that would produce a positive contribution margin If required, round your answer to two decimal places Product Cost Concept of Product Pricing La Femme Accessories Inc produces women's handbags The cost of producing 1,200 handbags is as follows Direct materials $14,200 Direct labor 8,700 Factory overhead 5,500 Total manufacturing cost $28,400 The selling and administrative expenses are $28,800 The management wants a profit equal to 18 of invested assets of $496,000 If required, round your answers to nearest whole number a Determine the amount of desired profit from the production and sale of 1,200 handbags If required, round your answers to nearest whole number $fill in the blank 1 b Determine the product cost per unit for the production of 1,200 handbags $fill in the blank 2per unit c Determine the product cost markup percentage for handbags fill in the blank 3 d Determine the selling price of handbags Round your answers to nearest whole value Cost per unit Markup per unit Selling price per unit Product Decisions Under Bottlenecked Operations Youngstown Glass Company manufactures three types of safety plate glass large, medium, and small All three products have high demand Thus, Youngstown Glass is able to sell all the safety glass it can make The production process includes an autoclave operation, which is a pressurized heat treatment The autoclave is a production bottleneck Total fixed costs are $85,000 for the company as a whole In addition, the following information is available about the three products Large Medium Small Unit selling price $184 $160 $100 Unit variable cost 130 120 76 Unit contribution margin $ 54 $ 40 $ 24 Autoclave hours per unit 3 2 1 Total process hours per unit 5 4 2 Budgeted units of production 3,000 3,000 3,000 a Determine the contribution margin by glass type and the total company income from operations for the budgeted units of production Round the Unit contribution margin per production bottleneck hour amounts to the nearest cent Large Medium Small Total Units produced Revenues Less Variable costs Contribution margin Less Fixed costs Income from operations b Prepare an analysis showing which product is the most profitable per bottleneck hour Large Medium Small Unit contribution margin Autoclave hours per unit Unit contribution margin per production bottleneck hour

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jun 29, 2024

Big Fork Lumber Company incurs a cost of $450 per hundred board feet (hbf) in processing certain rough-cut lumber, which it sells for $606 per

Big Fork Lumber Company incurs a cost of $450 per hundred board feet (hbf) in processing certain "rough-cut" lumber, which it sells for $606 per hbf. An alternative is to produce a "finished-cut" at a total processing cost of $543 per hbf, which can be sold for $737 per hbf.

	Required:
1.	Prepare a differential analysisdated August 9 on whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2). Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "0". A colon (:) will automatically appear if required.
2.	Determine whether the company should sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2).

Required:

Prepare a differential analysisdated August 9 on whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2). Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "0". A colon (:) will automatically appear if required.

Determine whether the company should sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2).

Labelsand Amount Descriptions
August 9
Costs, per 100 board ft.
Income (Loss), per 100 board ft.
Revenues, per 100 board ft.

2. Determine whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2).

Sell rough-cut lumber

The company is indifferent since the result is the same regardless of which alternative is chosen.

Process further and sell finished-cut lumber

Homestead Jeans Co. has an annual plant capacity of 65,000 units, and current production is 45,000 units. Monthly fixed costs are $54,000, and variable costs are $29 per unit. The present selling price is $42 per unit. On November 12 of the current year, the company received an offer from Dawkins Company for 18,000 units of the product at $32 each. Dawkins Company will market the units in a foreign country under its own brand name. The additional business is not expected to affect the domestic selling price or quantity of sales of Homestead Jeans Co.

	Required:
A.	Prepare a differential analysisdated November 12 on whether to reject (Alternative 1) or accept (Alternative 2) the Dawkins order. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "0". A colon (:) will automatically appear if required.
B.	Briefly explain why accepting this additional business will increase operating income.
C.	What is the minimum price per unit that would produce a positive contribution margin? If required, round your answer to two decimal places.

Product Cost Concept of Product Pricing

La Femme Accessories Inc. produces women's handbags. The cost of producing 1,200 handbags is as follows:

Direct materials	$14,200
Direct labor	8,700
Factory overhead	5,500
Total manufacturing cost	$28,400

The selling and administrative expenses are $28,800. The management wants a profit equal to 18% of invested assets of $496,000.

If required, round your answers to nearest whole number.

a. Determine the amount of desired profit from the production and sale of 1,200 handbags. If required, round your answers to nearest whole number. $fill in the blank 1

b. Determine the product cost per unit for the production of 1,200 handbags. $fill in the blank 2per unit

c. Determine the product cost markup percentage for handbags. fill in the blank 3 %

d. Determine the selling price of handbags. Round your answers to nearest whole value.

Cost		per unit
Markup		per unit
Selling price		per unit

Product Decisions Under Bottlenecked Operations

Youngstown Glass Company manufactures three types of safety plate glass: large, medium, and small. All three products have high demand. Thus, Youngstown Glass is able to sell all the safety glass it can make. The production process includes an autoclave operation, which is a pressurized heat treatment. The autoclave is a production bottleneck. Total fixed costs are $85,000 for the company as a whole. In addition, the following information is available about the three products:

	Large	Medium	Small
Unit selling price	$184		$160	$100
Unit variable cost	130		120	76
Unit contribution margin	$ 54		$ 40	$ 24
Autoclave hours per unit	3		2	1
Total process hours per unit	5		4	2
Budgeted units of production	3,000		3,000	3,000

a. Determine the contribution margin by glass type and the total company income from operations for the budgeted units of production. Round the "Unit contribution margin per production bottleneck hour" amounts to the nearest cent.