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almond37 [142]
3 years ago
8

Silven Industries, which manufactures and sells a highly successful line of summer lotions and insect repellents, has decided to

diversify in order to stabilize sales throughout the year. A natural area for the company to consider is the production of winter lotions and creams to prevent dry and chapped skin.
After considerable research, a winter products line has been developed. However, Silven's president has decided to introduce only one of the new products for this coming winter. If the product is a success, further expansion in future years will be initiated.
The product selected (called Chap-Off is a lip balm that will be sold in a lipstick-type tube. The product will be sold to wholesalers in boxes of 24 tubes for $8 per box. Because of excess capacity, no additional fixed manufacturing overhead costs will be incurred to produce the product. However, a $135,000 charge for fixed manufacturing overhead will be absorbed by the product under the company's absorption costing system.
Using the estimated sales and production of 135,000 boxes of Chap-off, the Accounting Department has developed the following cost per box:
Direct materials $3.90
Direct labor 1.90
Manufacturing overhead 1.30
Total cost $7.10
The costs above include costs for producing both the lip balm and the tube that contains it. As an alternative to making the tubes, Silven has approached a supplier to discuss the possibility of purchasing the tubes for Chap-Off. The purchase price of the empty tubes from the supplier would be $1.40 per box of 24 tubes. If Silven Industries accepts the purchase proposal, direct labor and variable manufacturing overhead costs per box of Chap-Off would be reduced by 10% and direct materials costs would be reduced by 25%.
Required:
a. Calculate the total variable cost of producing one box of Chap-Off.
b. What would be the maximum purchase price acceptable to Silven Industries?
Business
1 answer:
BartSMP [9]3 years ago
3 0
What I would do is do the percentages one by one and then you complete the actual project it’s self.
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2 years ago
1. Compute a single plantwide overhead rate for the year, assuming that the company assigns overhead based on 125,000 budgeted d
melamori03 [73]

Answer:

a. $17.44 per hour

b. $43,600 ; $104,640

Explanation:

The computation is shown below:

a. Single plantwide overhead rate equals to

= Total Overhead Amount ÷ Budgeted Direct Labor Hours

where,

Total overhead amount is

= $625,000 + $900,000 + $105,000 + $175,000 + $300,000 + $75,000

= $2,180,000

And, the budgeted direct labor hours is 125,000

So, the overhead rate is

= $2,180,000 ÷ 125,000

= $17.44 per hour

2. Now the overhead cost is

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For basic model

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7 0
3 years ago
Which of the following is not a major influence on business buyer behavior? individual factors organizational factors environmen
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Answer:

procurement factors

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4 0
3 years ago
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Answer:

Cash flows from investing activities is $653,200.

Explanation:

XYZ Company

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Proceed from sale of equipment ($80,000 - $34,000)               $46,000

Purchase of vehicle                                                                       $103,000

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Proceed from sale of long-term investments in stock                 $94,200

Cash flows from investing activities                                        $653,200

8 0
3 years ago
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