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CP has decided to introduce the new product which can be manufactured by either a computer assisted manufacturing system or labor intensive production system. The manufacturing technique will not affect the quality of product. The estimated manufacturing costs by two methods are:
Computer assisted Labor intensive
Direct material......................................$5.00...............................................$5.60Direct labor(DLH denotes directlabor hours).................................0.5DLH@$12...6.00............0.8DLH@$9......7.20Variable overhead.........................0.5DLH@ $6...3.00..............0.8DHL@$6....4.80Fixed overhead.....................................$2,440,000....................$1,320,000
The company's marketing research dept has recommended an introductory unit sales price of $30. Selling expenses are estimated to be $500,000 annually plus $2 for each unit sold.
1. Calculate the estimated break even point in annual unit sales of the new product if the company uses a. computer assisted manufacturing system or b. labor intensive production system.
2. Determine the annual unit sales volume at which the firm would be indifferent between the tow manufacturing methods.
To implement target costing for a new product, companies often set up a cross-functional team with members from engineering, marketing, and costing accounting. Why is a cross-functional team desirable when implementing the target costing approach..
Determine the ending finished goods inventory. What was the cost of indirect labor? What was the amount of factory overhead applied? Determine total manufacturing costs incurred during 2007. What was the cost of good manufactured?
Babbel Company is a manufacturing firm that uses the job-order costing. The company's inventory balances were as follows the the beginning of the year
What would you include in a job description for a new cashier? How about a sales person? What is included on your job description? Are there functions you perform that are not in your job description?
Needham Company uses normal costing in its job-costing system. Partially completed T-accounts and additional information for Needham for 2008 are as follows:
Vintech Company is planning to produce 1,800 units of product in 2011. Each unit requires 4 pounds of materials at $6 per pound and a half hour of labor at $17 per hour. The overhead rate is 70% of direct labor
The president asks you to compare the alternatives on a total-annual-cost basis and on a per-unit basis for annual needs of 60,000 units. Which alternative seems more attractive?
What is generally true regarding overhead allocation to high-volume products versus low-volume products under the traditional costing system?
Recognize three firms from 2009 FSB 100 which need a job-order costing system. Describe why they would most likely employ a job-order costing system.
Determine the company's bid if activity-based costing is used and the bid is based upon full manufacturing cost plus 30 percent.
This individual assignment is based on the TerraCycle Inc.
Prepare general journal entries in general journal form
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