Assume that the price charged for small jobs

Assignment Help Managerial Accounting
Reference no: EM13960147

Diamonds, Etc manufactures jewelry settings and sells them to retail stores. In the past, most settings were made by hand, and the overhead allocation rate in the prior year was $12 per labor hour ($2,400,000 overhead · 200,000 labor hours). In the current year, overhead increased by $800,000 due to acquisition of equipment. Labor, however, decreased by 40,000 hours because the equipment allows rapid creation of the settings. One of the company's many customers is a local jewelry store Jasmine's Fine Jewelry. This store is relatively small, and the time to make an order of jewelry pieces is typically less than 10 labor hours. On such jobs (less than 10 labor hours), the new equipment is not used, and thus the jobs are relatively labor intensive.

Required:

a. Assume that in the current year, the company continues to allocate overhead based on labor hours. What would be the overhead cost of a 10-labor-hour job requested by Jasmine's Fine Jewelry? How does this compare to the overhead cost charged to such a job in the prior year?

b. Assume that the price charged for small jobs does not change in the current year Are small jobs less profitable than they were in the past? 

Reference no: EM13960147

Questions Cloud

Purchased equipment from a mexican : A1 Corp, a U.S. company, purchased equipment from a Mexican firm for Mex$1,000,000 to be paid in 3 months. The spot rate at the time of purchase is $0.06 per Mex$.
Describe the differences between tangible : Describe the differences between tangible and intangible benefits and costs, and between one-time and recurring benefits and costs. Briefly identify and discuss four types of documents that would be helpful in determining future system requirements..
The retained earnings account has a credit balance : The Retained Earnings account has a credit balance of $25,500 before closing entries are made. If total revenues for the period are $80,200, total expenses are $58,800, and dividends are $13,500, what is the ending balance in the Retained Earnings ac..
Number of corporate scandals : As evidenced by the growing number of corporate scandals of which almost all involve the CEO and other top officers, corporate America in many cases is missing one essential leadership ingredient-character.
Assume that the price charged for small jobs : Assume that the price charged for small jobs does not change in the current year Are small jobs less profitable than they were in the past?
Supplemental income and loss : Need help filling out schedule e supplemental income and loss. The Joneses own a small four-unit rental. The rental was purchased and placed in service on july 1, 2002 and was rented for the entire year
Identify potential opportunities or threats created : Next, using Porter's Five Forces analysis, identify external forces that might impact the organization's profitability and why. Identify potential opportunities or threats created by these five forces. Justify your response.
What is the probability that one of the children is a girl : Assuming boy and girl children are equally likely and births are independent, if parents have two children, what is the probability that at least one is a boy? On the condition that at least one is a boy, what is the probability that one of the..
How should these centers be organized : How should these centers be organized: as cost centers, profit centers, or investment centers? Support your answer.

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Determine the ending inventory balance action

Determine the ending inventory balance Action would report on the December 31, 2013, balance sheet.

  Calculate return on equity for 2014

Calculate Return on Equity (ROE) for 2014 and calculate Return on Net Operating Assets (RNOA) for 2014 - Determine the amount that would be added to property, plant and equipment, if General Mills had capitalized these leases.

  Preston concrete is a major supplier of concrete to

preston concrete is a major supplier of concrete to residential and commercial builders in the pacific northwest.nbsp

  Necessary to assign under applied overhead to finished goods

When might it be necessary to assign under applied overhead to Finished Goods, Work in Process, and Cost of Goods Sold?

  What investment is required in the project

What investment is required in the project - Heap Company is considering an investment in a project that will have a two-year life.

  Direct labor used in production

Refer to the information in QS20-2. Blanche's Boxes incurred $ 135,000 in factory payroll costs, of which $ 125,000 was direct labor.

  Gazelle corporation, a merchandiser, recently completed

1.Gazelle Corporation, a merchandiser, recently completed its calendar- year 2013 operations. For the year,

  Recalculate your answer to part b assuming

Recalculate your answer to part b assuming Marie can lower the amount paid to instructors to $3,500 per class. Should Marie seriously pursue this option?

  Calculate price and efficiency variances

Calculate price and efficiency variances for all of the above and briefly explain what they mean and why the variances may have occurred.

  Process inventory and the cost of items completed

Determine the cost of the ending Work in Process inventory and the cost of items completed and transferred to Finished Goods inventory.

  Prepare the necessary entries to record transactions

Prepare the necessary entries to record transactions related to intangibles. All costs incurred were for cash and make the entries as of December 31, 2012, recording any necessary amortization.

  What aspects of the decision does the uncertainty refer

Distinguish between decision making under certainty and decision making under uncertainty. To what aspects of the decision does the uncertainty refer? What other possible sources of uncertainty are there in decision making?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd