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- The Molis Company has the capacity to produce 15,000 haks each month. Current regular production and sales are 10,000 haks per month at a selling price of P15 each. Based on this level of activity, the following unit costs are incurred: Direct materials P5.00 Direct labor 3.00 Variable manufacturing overhead 0.75 Fixed manufacturing overhead 1.50 Variable selling expense 0.25 Fixed administrative expense 1.00 The fixed costs, both manufacturing and administrative, are constant in total within the relevant range of 10,000 to 15,000 haks per month. The Molis Company has received a special order from a customer who wants to pay a reduced price of P10 per hak. There would be no selling expense in connection with this special order. And, this order would have no effect on the company's other sales. 1. Suppose the special order is for 4,000 haks this month. If this offer is…Wesley Utility Company uses 2,500 units per year which it stores at $0.50 per unit per annum. The cost to place an order is $100. a) Calculate: i. The economic order quantity (EOQ) b) If the company decides to make the items on its own machine with a potential capacity of 5,000 units per year, calculate: i. The economic order quantity (EOQ) ii. The annual ordering cost iii. The annual carrying costCane Company manufactures two products called Alpha and Beta that sell for $225 and $175, respectively. Each product uses only one type of raw materlal that costs $6 per pound. The company has the capacity to annually produce 130,000 units of each product. Its average cost per unit for each product at this level of activity are given below:
- Norton Ltd manufactures a single product, which is sold for N$136 per unit.The standard variable costs per unit of the product are: Direct Material 4 kilos at N$7.50 per kilo Direct labour 5 hours at N$11 per hour Production overhead N$2.4 per direct labour hour Sales overhead N$ 5 per unit The company expects to manufacture and sell 8,000 units in total during the forthcoming year (Year 1).The fixed overhead costs for the forthcoming year are: N$ Production 60 000 Administration 35 000 Sales 11 000 REQUIRED:a) Calculate for the forthcoming year (Year 1):i. The break-even point in dollars and unitsii. The margin of safety in dollars and units iii. The amount of sales in units that would earn the company a profit of $180,000Arntson, Inc., manufactures and sells two products: Product R3 and Product N0. The annual production and sales of Product of R3 is 1,100 units and of Product N0 is 400 units. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Expected Production Direct Labor-Hours Per Unit Total Direct Labor-Hours Product R3 1,100 10.0 11,000 Product N0 400 5.0 2,000 Total direct labor-hours 13,000 The direct labor rate is $20.60 per DLH. The direct materials cost per unit is $211.00 for Product R3 and $287.00 for Product N0. The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Estimated Expected Activity Activity Cost Pools Activity Measures Overhead Cost Product R3 Product N0 Total Labor-related DLHs $ 40,636 11,000 2,000 13,000 Production orders orders 65,880…Cane Company manufactures two products called Alpha and Beta that sell for $140 and $100, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 106,000 units of each product. Its average cost per unit for each product at this level of activity is given below:
- A small shop in Bulacan fabricates portable threshers for palay producers in the locality. The shop can produce each thresher at a labor cost of P1,800. The cost of materials for each unit is P2,500. The variable costs amount to P650 per unit, while fixed charges incurred per annum totals P69,000. If the portable threshers are sold at P7,800 per unit, how many units must beproduced and sold per annum to break-even? Support your answer with computations and also by graphical solution. (Kindly provide a COMPLETE and CLEAR solution. Also, write legibly)Andretti Company has a single product called a Dak. The company normally produces and sells 85,000 Daks each year at a selling price of $58 per unit. The company's unit costs at this level of activity are given below: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Total cost per unit A number of questions relating to the production and sale of Daks follow. Each question is independent. Required: 1-a. Assume that Andretti Company has sufficient capacity to produce 106,250 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 25% above the present 85,000 units each year if it were willing to increase the fixed selling expenses by $130,000. What is the financial advantage (disadvantage) of investing an additional $130,000 in fixed selling expenses? 1-b. Would the additional investment be justified? 2. Assume again that Andretti…Calculate the expected costs when production is 5100 units. Sheridan Corporation manufactures a single product. Monthly production costs incurred in the manufacturing process are shown below for the production of 3,200 units. The utilities and maintenance costs are mixed costs. The fixed portions of these costs are $390 and $290, respectively. Production in Units Production Costs Direct materials. Direct labour Utilities Property taxes Indirect labour Supervisory salaries Maintenance Depreciation 3,200 $7,936 15,264 1,798 1,000 4,512 1,900 1,602 2,550
- A small shop in Bulacan fabricates portable threshers for palay producers in the locality. The shop can produce each thresher at a labor cost of P1,800. The cost of materials for each unit is P2,500. The variable costs amount to P650 per unit, while fixed charges incurred per annum totals P69,000. If the portable threshers are sold at P7,800 per unit, how many units must be produced and sold per annum to break-even? Support your answer with computations and also by graphical solution.Beat Company manufactures 8,000 units of a certain component per year. This component is used in the production of the main product. The following are the costs to make the component per unit: Direct materials $4 Direct labor $4 Variable overhead $3 Fixed overhead $5 If Beat Company buys the component from an outside supplier, the company can rent out the released facilities for P12,360 a year. The cost of the component per unit as quoted by the supplier is P15. 25% of fixed overhead applied in the manufacture of the component will continue regardless of what decision is made. For all purchase made by the company, freight and handling costs are applied at 2% of the purchase price. The direct materials cost presented above is exclusive of such freight and handling cost. What is the advantage or disadvantage of buying the component?A. P12,240 advantage B. 24,600 advantage C. 5,400 disadvantage D. 8,600 advantageBossy Company sells a single product. The company normally produces and sells 200,000 units each year at a selling price of $130 per unit. The company's unit cost at this level of activity is given below: Direct materials Direct labour Var.mfg. overhead Var. selling expense Fixed mfg. overhead Fixed selling expense $85.0 0 25.00 5.00 2.00 10.00 ($2,000,000 total) 2.50 ($500,000 total) Required: The president estimates that the company could increase net income if it reduced unit sales by 10%, increased selling price per unit to $131, decreased direct materials by $1 per unit, increased variable selling expense per unit by $.50 and decreased fixed selling expenses by $60,000. The company's income tax rate is 25%. Would the changes result in higher net income?