Accounting Practice Questions Chapter 12

In: Business and Management

Submitted By spike
Words 347
Pages 2
CHAPTER 12 – EXERCISE 12-4 Solution
Normal
selling price: 389.95
Direct
materials
$143.00
Direct labor $86.00
Manufacturing
overhead
$35.00
unit production cost
$264.00
Most
MO
os fixed and unaffected by variations in j ewelry produ ced
$7
of the MO is variable with respect to bracelets produced Additional
Special
order:
$6.00
per
Special
tools purchase $465.00 tool No affect on sales or capacity What affect? Special price $349.95 per Should the special order be accepted at this price
Company:
Miyamoto
Jewelers
Per
Unit
10
Bracelet
Incremental revenue $349.95
$3,499.50
Incremental costs: Variable costs: Direct materials $143.00
$1,430.00
Direct labor $86.00
$860.00
Variable
Manufacturing
overhead
$7.00
$70.00
Special
filligree
$6.00
$60.00
Total
variable cost $242.00
$2,420.00
Fixed costs: Purchase of special tool $465.00
Total
incremental cost $2,885.00 incremental net operating income
$614.50
CHAPTER 12 – EXERCISE 12-16 Solution
Diehl
Company
Diesel
Tractors unit product cost based on 60000 parts per year Per
Part
60000 units Direct materials $4.00
$240,000.00
Direct labor $2.75
$165,000.00
Variable manufacturing overhead
$0.05
$3,000.00
Fixed
manufacturing overhead, traceable
$3.00
$180,000.00
Fixed
manufacturing overhead, common
$2.25
$135,000.00
(allocated
on the basis of labor hours) unit production cost
$12.05
$723,000.00
Electrical
parts
$10.00
per part Supervisory salary (trace
FMO
/
3)
$60,000.00
Eliminated
and can be eliminated if parts purchases
Depreciation
(special equipment) $120,000.00 no resale
-­‐
nothing salvaged Relevant
Costs
60000 units Item
Make
Buy
Direct
materials
(60000
x
$4)
$240,000.00
Direct
labor
(60000
X
$2.75)…...

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