Crane Company manufactures widgets. Bowden Company has approached Crane with a proposal to sell the company widgets at a price of $65600 for 100000 units. Crane is currently making these components in its own factory. The following costs are associated with this part of the process when 100000 units are produced: $ 24800 23200 Direct material Direct labor Manufacturing overhead Total 32000 $80000 The manufacturing overhead consists of $12800 of costs that will be eliminated if the components are no longer produced by Crane. From Crane's point of view, how much is the incremental cost or savings if the widgets are bought instead of made? $14400 incremental savings $1600 incremental savings $14400 incremental cost $4800 incremental cost Concord Corporation manufactures widgets. Bowden Company has approached Concord with a proposal to sell the company widgets at a price of $90200 for 100000 units. Concord is currently making these components in its own factory. The following costs are associated with this part of the process when 100000 units are produced: $34100 31900 Direct material Direct labor Manufacturing overhead Total 44000 $110000 The manufacturing overhead consists of $17600 of costs that will be eliminated if the components are no longer produced by Concord. From Concord's point of view, how much is the incremental cost or savings if the widgets are bought instead of made? $2200 incremental savings $19800 incremental cost $19800 incremental savings O $6600 incremental cost Sheridan Company gathered the following data about the three products that it produces: Product Present Sales Value $13600 15600 12600 Estimated Additional Estimated Sales Processing Costs if Processed Further $8800 $23400 5800 20400 3800 18400 Which of the products should not be processed further? O Product A O Product C O Product B O Products A and C Bonita Industries has four product lines: sour cream, ice cream, yogurt, and butter. The total cost of producing the milk base for the products is $37000, which has been allocated based on the gallons of milk base used by each product. Results for July follow: Units sold Revenue Variable departmental costs Fixed costs Net income (loss) Sour Cream 2000 $8500 4200 Ice Cream 500 $17000 9200 2000 $5800 Yogurt Butter Total 400 2000 4900 $8500 $17000 $51000 3000 3400 19800 3000 7000 17000 $ 2500 $ 6600 $14200 5000 $ (700) How much are total joint costs of the products? $36800 $14200 $17000 $19800 Tidwell Industries has the following overhead costs and cost drivers. Direct labor hours are estimated at 100000 for the year. Activity Cost Pool Cost Driver Cost Driver Activity_ Est. Overhead $ 165000 Orders 500 orders Ordering and Receiving Machine Setup Machining Assembly Inspection Setups Machine hours Parts Inspections 337500 1625000 1290000 345000 450 setups 125000 MH 1000000 parts 500 inspections If overhead is applied using traditional costing based on direct labor hours, the overhead application rate is $38. $13. $11. $16
