Cobe Company has already manufactured 18,000 units of Product A at a cost of $20 per unit. The 18,000 units can be sold at this stage for $480,000. Alternatively, the units can be further processed at a $260,000 total additional cost and be converted into 5,600 units of Product B and 11,000 units of Product C. Per unit selling price for Product B is $105 and for Product C is $53. 1. Prepare an analysis that shows whether the 18,000 units of Product A should be processed further or not? Sales Relevant costs: Total relevant costs Income (loss) Sell as is Incremental net income (or loss) if processed further The company should Process Further

Cobe Company has already manufactured 18,000 units of Product A at a cost of $20 per unit. The 18,000 units can be sold at this stage for $480,000. Alternatively, the units can be further processed at a $260,000 total additional cost and be converted into 5,600 units of Product B and 11,000 units of Product C. Per unit selling price for Product B is $105 and for Product C is $53. 1. Prepare an analysis that shows whether the 18,000 units of Product A should be processed further or not? Sales Relevant costs: Total relevant costs Income (loss) Sell as is Incremental net income (or loss) if processed further The company should Process Further

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter19: Support Department And Joint Cost Allocation

Section: Chapter Questions

Problem 4CMA: Tucariz Company processes Duo into two joint products, Big and Mini. Duo is purchased in...

See similar textbooks

Similar questions

Cobe Company has already manufactured 18,000 units of Product A at a cost of $15 per unit. The 18,000 units can be sold at this stage for $410,000. Alternatively, the units can be further processed at a $250,000 total additional cost and be converted into 5,800 units of Product B and 11,100 units of Product C. Per unit selling price for Product B is $104 and for Product C is $60. 1. Prepare an analysis that shows whether the 18,000 units of Product A should be processed further or not? Sales Relevant costs: Total relevant costs Income (loss) Sell as is Incremental net income (or loss) if processed further The company should Process Further O
Bryant Company has already manufactured 21,000 units of Product A at a cost of $15 per unit. The 21,000 units can be sold at this stage for $410,000. Alternatively, the units can be further processed at a $200,000 total additional cost and be converted into 5,800 units of Product B and 11,200 units of Product C. Per unit selling price for Product B is $104 and for Product C is $59. 1. Prepare an analysis that shows whether the 21,000 units of Product A should be processed further or not? Sell as is Process Further Sales Relevant costs: Total relevant costs Income (loss) Incremental net income (or loss) if processed further The company should
Cobe Company has already manufactured 22,000 units of Product A at a cost of $15 per unit. The 22,000 units can be sold at this stage for $460,000. Alternatively, the units can be further processed at a $220,000 total additional cost and be converted into 5,100 units of Product B and 11,600 units of Product C. Per unit selling price for Product B is $103 and for Product C is $52. 1. Prepare an analysis that shows whether the 22,000 units of Product A should be processed further or not? Sales Relevant costs: Total relevant costs Income (loss) Sell as is $ 460,000 Incremental net income (or loss) if processed further The company should Process Further
Cobe Company has already manufactured 20,000 units of Product A at a cost of $30 per unit. The 20,000 units can be sold at this stage for $490,000. Alternatively, the units can be further processed at a $300,000 total additional cost and be converted into 5,900 units of Product B and 11,400 units of Product C. Per unit selling price for Product B is $102 and for Product C is $59. 1. Prepare an analysis that shows whether the 20,000 units of Product A should be processed further or not?
Products A and B are produced from a single raw material input. The raw material costs $90,000, from which 5,000 units of A and10,000 units of B can be produced each period. Product A can be sold at the split-off point for $2 per unit, or it can be processed further at a cost of $12,500 and then sold for $5 per unit. Product B can be sold at the split-off point for $8 per unit, or it can be processed further at a cost of $40,000 and then sold for $12 per unit. What is the total change in net income if both products are processed further?
Test Company produces two products from a common input: Product A and Product B. One batch of the common input yields 600 units of Product A and 200 units of Product B. The joint costs for one batch are $25,000. Product A can be sold at the split-off point for $80 per unit. Product B can be sold at the split-off point for $150 per unit. Alternatively, Product B can be processed into 120 units of Product C that will sell for $400 per unit. Additional process costs for one batch of Product C will be $5,500 Determine the increase (decrease) in income if Product B is processed further into Product C. Note: Give your answer using dollar signs and commas but not decimal points (cents) Give negative numbers in parentheses. Example: $12,345 or S(12,345)
Crane Company uses 9000 units of Part A in producing its products. A supplier offers to make Part A for $5. CraneCompany has relevant costs of $8 a unit to manufacture Part A. If there is excess capacity, the relevant cost of buying Part A from the supplier is $72000. $45000. $27000. $0.
Harcourt Manufacturing (HM) has the capacity to produce 11,800 fax machines per year. HM currently produces and sells 8,800 units per year. The fax machines normally sell for $280 each. Modem Products has offered to buy 3,800 fax machines from HM for $150 each. Unit-level costs associated with manufacturing the fax machines are $51 each for direct labor and $76 each for direct materials. Product-level and facility-level costs are $68,000 and $83,000, respectively. How much would profit increase (decrease) if HM accepted this special order?
Jorioz Co makes joint products X and Y. $120,000 joint processing costs are incurred. At the split-off point, 10,000 units of X and 9,000 units of Y are produced, with selling prices of $1.20 for X and $1.50 for Y. The units of X could be processed further to make 8,000 units of product Z. The extra costs incurred in this process would be fixed costs of $1,600 and variable costs of $0.50 per unit of input. The selling price of Z would be $2.25. What would be the outcome if product X is further processed? O $600 loss $400 gain O $3,900 gain O $1,600 loss
A company has already incurred $5,000 of costs in producing 6,000 units of Product XY. Product XY can be sold as is for $15 per unit. Instead, the company could incur further processing costs of $8 per unit and sell the resulting product for $21 per unit. Should the company sell Product XY as is or process it further?
Zycon has produced 10,000 units of partially finished Product A. These units cost $15,000 to produce, and they can be sold to another manufacturer for $20,000. Instead, Zycon can process the units further and produce finished Products X, Y, and Z. Processing further will cost an additional $22,000 and will yield total revenues of $35,000. Place an X in the appropriate column to identify whether the item is relevant or irrelevant to the sell or process further decision. Item Relevant Not Relevant a. $15,000 cost already incurred to produce b. $20,000 selling price c. $22,000 additional processing costs d. $35,000 revenues from processing
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 advantage