Business, 18.03.2021 01:10 kev71

Silva Chairs, Inc. makes two types of chairs. Model Diamond is a high-end product designed for professional offices. Model Gold is an economical product designed for family use. Jane Silva, the president, is worried about cut-throat price competition in the chairs market. Her company suffered a loss last quarter, an unprecedented event in its history. The company’s accountant prepared the following cost data for Ms. Silva: Direct Cost per Unit Model Diamond (D) Model Gold (G)
Direct materials $20.60 per unit $9.80 per unit
Direct labor $18.00 /hour × 2.00 hours production time $18.00 /hour × 1.00 hour production time
Category Estimated Cost Cost Driver Use of Cost Driver
Unit level $329,400 Number of units D: 15,000 units; G: 39,000 units
Batch level 1,216,000 Number of setups D: 102 setups; G: 218 setups
Product level 800,000 Number of TV commercials D: 7; G: 13
Facility level 400,000 Number of machine hours D: 1,600 hours; G: 3,400 hours
Total $2,745,400

Required:
a. Compute the cost per unit for both products.
b. Silva Chairs, Inc, the chief engineer, told Ms. Silva that the company is currently making 147 units of Model Diamond per batch and 179 units of Model Gold per batch. He suggests doubling the batch sizes to cut the number of setups in half, thereby reducing the setup cost by 50 percent. Compute the cost per unit for each product if Ms. Silva adopts his suggestion.

Answers: 2

Show answers

Other questions on the subject: Business

Business, 21.06.2019 21:20, sophiaa23

Reqwest llc agrees to sell one hundred servers to social media networks, inc. the servers, which social media networks expressly requires to have certain amounts of memory, are to be shipped “f. o.b. social media networks distribution center in tampa, fl.” when the servers arrive, social media networks rejects them and informs reqwest, claiming that the servers do not conform to social media networks’ memory requirement. a few hours later, the servers are destroyed in a fire at social media networks’ distribution center. will reqwest succeed in a suit against social media networks for the cost of the goods?

Answers: 3

continue

Business, 21.06.2019 22:20, kota87

On january 1, jackson, inc.'s work-process inventory account showed a balance of $ 66,500. during the year, materials requisitioned for use in production amounted to $ 70,500, of which $ 67,700 represented direct materials. factory wages for the period were $ 210,000 of which $ 187,000 were for direct labor. manufacturing overhead is allocated on the basis of 60% of direct labor cost. actual overhead was $ 116,050. jobs costing $ 353,060 were completed during the year. the december 31 balance in work-process inventory is

Answers: 1

continue

Business, 22.06.2019 11:20, greatsavagebeast

Mae jong corp. issues $1,000,000 of 10% bonds payable which may be converted into 10,000 shares of $2 par value ordinary shares. the market rate of interest on similar bonds is 12%. interest is payable annually on december 31, and the bonds were issued for total proceeds of $1,000,000. in accounting for these bonds, mae jong corp. will: (a) first assign a value to the equity component, then determine the liability component. (b) assign no value to the equity component since the conversion privilege is not separable from the bond.(c) first assign a value to the liability component based on the face amount of the bond.(d) use the “with-and-without” method to value the compound instrument.

Answers: 3

continue

Business, 22.06.2019 12:50, 20170020

Kyle and alyssa paid $1,000 and $4,000 in qualifying expenses for their two daughters jane and jill, respectively, to attend the university of california. jane is a sophomore and jill is a freshman. kyle and alyssa's agi is $135,000 and they file a joint return. what is their allowable american opportunity tax credit after the credit phase-out based on agi is taken into account?

Answers: 1

continue

You know the right answer?

Silva Chairs, Inc. makes two types of chairs. Model Diamond is a high-end product designed for profe...