User Account

All Pages

Benefits to thunder bolt of theoretical capacity

Assignment Help Accounting Basics
Reference no: EM131664515

Question: Denominator-level problem. Thunder Bolt, Inc., is a manufacturer of the very popular G36 motorcycles. The management at Thunder Bolt has recently adopted absorption costing and is debating which denominatorlevel concept to use. The G36 motorcycles sell for an average price of $8,200. Budgeted fixed manufacturing overhead costs for 2017 are estimated at $6,480,000. Thunder Bolt, Inc., uses subassembly operators that provide component parts. The following are the denominator-level options that management has been considering:

a. Theoretical capacity-based on three shifts, completion of five motorcycles per shift, and a 360-day year-3 * 5 * 360 = 5,400.

b. Practical capacity-theoretical capacity adjusted for unavoidable interruptions, breakdowns, and so forth-3 * 4 * 320 = 3,840.

c. Normal capacity utilization-estimated at 3,240 units.

d. Master-budget capacity utilization-the strengthening stock market and the growing popularity of motorcycles have prompted the marketing department to issue an estimate for 2017 of 3,600 units.

1. Calculate the budgeted fixed manufacturing overhead cost rates under the four denominator-level concepts.

2. What are the benefits to Thunder Bolt, Inc., of using either theoretical capacity or practical capacity?

3. Under a cost-based pricing system, what are the negative aspects of a master-budget denominator level? What are the positive aspects?

Reference no: EM131664515

Questions Cloud

Review case study of the capacity management : Capacity management, denominator-level capacity concepts. Match each of the following numbered descriptions with one or more of the denominator-level capacity.
Write a report on network design with configuration : MN503 - Overview of Internetworking - Network design with configuration - Design a detailed Network in Netsim (You must not use packet tracer)
Not all bacteria are culturable : Not all bacteria are culturable (i.e. able to be grown in the lab using specific nutrient media). How could PCR be used to help us.
How self-esteem is created through self-concept : Perception is almost like a pair of glasses we use to see and understand the world, including when we look in the mirror.
Benefits to thunder bolt of theoretical capacity : Denominator-level problem. Thunder Bolt, Inc., is a manufacturer of the very popular G36 motorcycles. The management at Thunder Bolt has recently adopted.
Identifying the source of infection : Environmental cultures were negative for hospital equipment. Provide a plan for identifying the source of infection and preventing further infection.
Discuss the treatments or interventions : Evaluate three peer reviewed research studies using the University of Phoenix Material: Research Analysis.
Important in the innate defense response : The complement system is extremely important in the innate defense response. It can be said that this system is a cascade. Explain this statement.
Prepare income statements for entertainme : Prepare income statements for EntertainMe in January, February, and March 2017 under (a) variable costing and (b) absorption costing.

Reviews

Write a Review

Accounting Basics Questions & Answers

  Weighted-average process costing to account

Victory Company uses weighted-average process costing to account for its production costs. Direct labor is added evenly throughout the process. Direct materials are added at the beginning of the process.

  Prepare a classified balance sheet in good form as of

the following items were taken from the financial statements of m. wright company. all dollars are in thousands.

  Merits of the four different special journals

What are the advantages of the four different special journals? When would you use each type? What is a subsidiary ledger and what purpose does it serve?

  On the basis of the information above do you agree with the

as auditor for banquo amp associates you have been assigned to check duncan corporations computation of earnings per

  Internal operating schedules

This problem is a continuation of Problem 3. Assume you ramp up production to 1,000 units in both may and June. Repeat the calculations requested in Problem 3 for the second quarter of the year (April, may, and June).

  Contrasting the different types of accounting

Write a 700- to 1,050-word paper in APA format comparing and contrasting the different types of accounting, namely accrual, cash flow, and fund accounting. Be sure to consider the following:

  Describe the overall effect of each transaction on the

nicole has been financing nicoles gateway spa ngs using equity financing. currently ngs has authorized 100000 0.30

  Determine proper cash balance

Francis Equipment Co. closes its books regularly on December 31, but at the end of 2012 it held its cash book open so that a more favorable balance sheet could be prepared for credit purposes.

  Comet company began operations in 2010 and adopted the fifo

comet company began operations in 2010 and adopted the fifo method of inventory pricing. during 2012 comet company

  What is a point of sale system

What is a point of sale system? Does a point of sale system increase or decrease the likelihood that cash will be stolen by employees? Explain.

  Penn company uses a job order cost accounting system in the

penn company uses a job order cost accounting system. in the last month the system accumulated labor time tickets

  The case of internal controls in x company and ms. smith

The Case of Internal Controls in X Company and Ms. Smith

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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