Chapter #13 - Homework i Saved Help Save - Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's most recent monthly contribution format income statement follows: Department points Total Hardware Linens Sales $ 4, 150 , 000 $ 3,020, 000 $ 1, 130 , 000 828 ,000 402, 000 Skipped Variable expenses 1, 230, 000 Contribution margin 2, 920, 000 2 , 192, 000 728 , 000 Fixed expenses 2, 230, 000 1, 380, 000 850, 000 Net operating income (loss) $ 690 , 000 $ 812, 000 $ (122,000) eBook A study indicates that $377,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue Print even if the Linens Department is dropped. In addition, the elimination of the Linens Department will result in a 19% decrease in the References sales of the Hardware Department. Required: What is the financial advantage (disadvantage) of discontinuing the Linens Department? Mc Graw 1 of 5 Next > Hill PrevChapter #13 - Homework i Saved Help Save 2 Futura Company purchases the 75,000 starters that it installs in its standard line of farm tractors from a supplier for the price of $10.60 per unit. Due to a reduction in output, the company now has idle capacity that could be used to produce the starters rather than buying them from an outside supplier. However, the company's chief engineer is opposed to making the starters because the production cost per unit is $11.30 as shown below: points Per Unit Total Skipped Direct materials $ 5.00 Direct labor 2.20 Supervision 1 . 80 $ 135 , 000 Depreciation 1 . 40 $ 105 , 000 eBook Variable manufacturing overhead 0 . 40 Rent 0 . 50 $ 37, 500 Print Total product cost $ 11.30 References If Futura decides to make the starters, a supervisor would have to be hired (at a salary of $135,000) to oversee production. However, the company has sufficient idle tools and machinery such that no new equipment would have to be purchased. The rent charge above is based on space utilized in the plant. The total rent on the plant is $88,000 per period. Depreciation is due to obsolescence rather than wear and tear. Required: What is the financial advantage (disadvantage) of making the 75,000 starters instead of buying them from an outside supplier? Mc Graw HillHubSpot Academy a Prime Video - Am... Chapter #13 - Homework i Saved Help Save & Exit Check my 3 Delta Company produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 94,800 units per year is: Direct materials $ 1. 70 points Direct labor $ 2.00 Variable manufacturing overhead $ 0. 90 Skipped Fixed manufacturing overhead $ 4.75 Variable selling and administrative expenses $ 1.90 Fixed selling and administrative expenses $ 1.00 eBook The normal selling price is $25.00 per unit. The company's capacity is 115,200 units per year. An order has been received from a mail- order house for 1,700 units at a special price of $22.00 per unit. This order would not affect regular sales or the company's total fixed Hint costs. Print Required: References 1. What is the financial advantage (disadvantage) of accepting the special order? 2. As a separate matter from the special order, assume the company's inventory includes 1,000 units of this product that were produced last year and that are inferior to the current model. The units must be sold through regular channels at reduced prices. The company does not expect the selling of these inferior units to have any effect on the sales of its current model. What unit cost is relevant for establishing a minimum selling price for the inferior units? Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the financial advantage (disadvantage) of accepting the special order? Required 1 Required 2 > Mc Graw Hill3 Direct labor Ched $ 2.00 Variable manufacturing overhead $ 0. 90 Fixed manufacturing overhead $ 4.75 Variable selling and administrative expenses $ 1.90 Fixed selling and administrative expenses $ 1.00 points The normal selling price is $25.00 per unit. The company's capacity is 115,200 units per year. An order has been received from a mail- order house for 1,700 units at a special price of $22.00 per unit. This order would not affect regular sales or the company's total fixed costs. Skipped Required: 1. What is the financial advantage (disadvantage) of accepting the special order? eBook 2. As a separate matter from the special order, assume the company's inventory includes 1,000 units of this product that were Hint produced last year and that are inferior to the current model. The units must be sold through regular channels at reduced prices. The company does not expect the selling of these inferior units to have any effect on the sales of its current model. What unit cost is Print relevant for establishing a minimum selling price for the inferior units? References Complete this question by entering your answers in the tabs below. Required 1 Required 2 As a separate matter from the special order, assume the company's inventory includes 1,000 units of this product that were produced last year and that are inferior to the current model. The units must be sold through regular channels at reduced prices. The company does not expect the selling of these inferior units to have any effect on the sales of its current model. What unit cost is relevant for establishing a minimum selling price for the inferior units? (Round your answer to 2 decimal places.) Show less A Relevant cost per unit Required 1 Required 2 > Mc Graw HillChapter #13 - Homework i Saved Help Save & Exit Check 4 Benoit Company produces three products-A, B, and C. Data concerning the three products follow (per unit): Product A B C Selling price $ 90 . 00 $ 60. 00 $ 80 .00 Variable expenses: points Direct materials 27.00 18.00 9.00 Other variable expenses 27 . 00 27.00 47 .00 Skipped Total variable expenses 54 . 00 45.00 56.00 Contribution margin $ 36.00 $ 15. 00 24 .00 Contribution margin ratio 408 25% 30% eBook The company estimates that it can sell 750 units of each product per month. The same raw material is used in each product. The Print material costs $3 per pound with a maximum of 5,400 pounds available each month. References Required: 1. Calculate the contribution margin per pound of the constraining resource for each product. 2. Which orders would you advise the company to accept first, those for A, B, or C? Which orders second? Third? 3. What is the maximum contribution margin that the company can earn per month if it makes optimal use of its 5,400 pounds of materials? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Calculate the contribution margin per pound of the constraining resource for each product. (Round your answers to 2 decimal places. ) Product A Product B Product C Contribution margin per pound of the constraining resource Required 1 Required 2 > Mc Graw HillChapter #13 - Homework i Saved Help Sav 4 Selling price $ 90.00 $ 60.00 $ 80.00 Variable expenses: Direct materials 27.00 18 . 00 9.00 Other variable expenses 27.00 27.00 47.00 Total variable expenses 54.00 45 . 00 56 .00 Contribution margin $ 36.00 $ 15. 00 $ 24.00 points Contribution margin ratio 40% 25% 30% Skipped The company estimates that it can sell 750 units of each product per month. The same raw material is used in each product. The material costs $3 per pound with a maximum of 5,400 pounds available each month. eBook Required: 1. Calculate the contribution margin per pound of the constraining resource for each product. Print 2. Which orders would you advise the company to accept first, those for A, B, or C? Which orders second? Third? 3. What is the maximum contribution margin that the company can earn per month if it makes optimal use of its 5,400 pounds of References materials? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Which orders would you advise the company to accept first, those for A, B, or C? Which orders second? Third? Product A Product B Product C Mc Graw HillChapter #13 - Homework i Saved Help Save & Ex Che 4 Selling price $ 90. 00 $ 60.00 $ 80.00 Variable expenses: Direct materials 27.00 18 . 00 9 . 00 Other variable expenses 27 . 00 27.00 17 . 00 Total variable expenses 54 . 00 45 . 00 56.00 Contribution margin $ 36.00 $ 15 . 00 $ 24.00 points Contribution margin ratio 40% 25% 30% Skipped The company estimates that it can sell 750 units of each product per month. The same raw material is used in each product. The material costs $3 per pound with a maximum of 5,400 pounds available each month. eBook Required: 1. Calculate the contribution margin per pound of the constraining resource for each product. Print 2. Which orders would you advise the company to accept first, those for A, B, or C? Which orders second? Third? 3. What is the maximum contribution margin that the company can earn per month if it makes optimal use of its 5,400 pounds of References materials? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the maximum contribution margin that the company can earn per month if it makes optimal use of its 5,400 pounds of materials? (Round your intermediate calculations to 2 decimal places.) Maximum contribution margin Graw HillNews Translate YouTube h Hulu | Watch myMU Account 6 HubSpot Academy a Prime Video - Am.. Chapter #13 - Homework i Saved Help 5 Wexpro, Incorporated, produces several products from processing 1 ton of clypton, a rare mineral. Material and processing costs total $50,000 per ton, one-fourth of which is allocated to product X15. Seven thousand seven hundred units of product X15 are produced from each ton of clypton. The units can either be sold at the split-off point for $17 each, or processed further at a total cost of $6,200 and then sold for $23 each. points Required: Skipped 1. What is the financial advantage (disadvantage) of further processing product X15? 2. Should product X15 be processed further or sold at the split-off point? eBook 1 . Print 2. Product X15 should be References Mc Graw Hill