Rooney Chairs, Inc. makes two types of chairs. Model Diamond is a high-end product designed for...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Rooney 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 Direct materials Direct labor Model Diamond (D) $20.90 per unit $18.60/hour x 2.00 hours production time Model Gold (G) $9.60 per unit $18.60/hour 1.00 hour production time Category Unit level Estimated Cost $ 339, 200 1,015,000 495,eee 765, 000 $2,614, 200 Cost Driver Number of units Number of setups Number of TV commercials Number of machine hours Use of Cost Driver D: 13,000 units; G: 40,000 units D: 108 setups; G: 182 setups D: 8; G 7 Di 2,400 hours; G: 2,700 hours Batch level Product level Facility leve1 Total The market price for office chairs comparable to Model Diamond is $116 and to Model Gold is $79. Required a. Compute the cost per unit for both products. b. Dan Barker, the chief engineer, told Ms. SIlva that the company is currently making 120 units of Model Diamond per batch and 220 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. Rooney 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 Direct materials Direct labor Model Diamond (D) $20.90 per unit $18.60/hour x 2.00 hours production time Model Gold (G) $9.60 per unit $18.60/hour 1.00 hour production time Category Unit level Estimated Cost $ 339, 200 1,015,000 495,eee 765, 000 $2,614, 200 Cost Driver Number of units Number of setups Number of TV commercials Number of machine hours Use of Cost Driver D: 13,000 units; G: 40,000 units D: 108 setups; G: 182 setups D: 8; G 7 Di 2,400 hours; G: 2,700 hours Batch level Product level Facility leve1 Total The market price for office chairs comparable to Model Diamond is $116 and to Model Gold is $79. Required a. Compute the cost per unit for both products. b. Dan Barker, the chief engineer, told Ms. SIlva that the company is currently making 120 units of Model Diamond per batch and 220 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.
Expert Answer:
Answer rating: 100% (QA)
my answer is as follows Cotegoy Olever ABC Ro te unet lever ... View the full answer
Related Book For
Managerial Decision Modeling with Spreadsheets
ISBN: 978-0136115830
3rd edition
Authors: Nagraj Balakrishnan, Barry Render, Jr. Ralph M. Stair
Posted Date:
Students also viewed these accounting questions
-
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...
-
Fazel 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. Irene Fazel, the...
-
Huber 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. Pamela Huber, the...
-
Northland Corporation is a small information-systems consulting firm that specializes in helping companies implement standard sales-management software. The market for Northalndss services is very...
-
What is the balanced scorecard? Discuss.
-
Quick Drive-Ins borrowed money by issuing $4,000,000 of 4% bonds payable at 96.5. Requirements 1. How much cash did Quick receive when it issued the bonds payable? 2. How much must Quick pay back at...
-
Use of mean and standard deviation The Oyster Pearl Restaurant is popular with sea- food fanciers who like its large variety of oyster dishes. The oysters are a high-profit item but sales fluctuate...
-
Kantrovitz Company is a manufacturer of industrial components. One of its products that is used as a subcomponent in appliance manufacturing is AP110. This product has the following information per...
-
Question 7 Use the Intermediate Value Theorem to show that the given function has a zero in the interval [0, 3]. 2 points f (2) = 22+520 - 1 How Did I Do? f (ac ) Click for List on the interval [0,...
-
The 3-kg block A is released from rest in the 60 position shown and subsequently strikes the 1-kg cart B. If the coefficient of restitution for the collision is e = 0.7, determine the maximum...
-
You are looking to buy a house in St. Joseph County and have narrowed down specific townships and are looking at homes have maximum purchase price of $320,000. You expect to borrow 80% of the...
-
Earl's savings account has an APR of 7.3%, calculates interest daily, and pays interest at the end of the month. If during the month of June, his balance was $400 for the first 10 days of the month,...
-
Sheridan Company had the following select transactions. Apr. 1, 2022 July 1, 2022 Dec. 31, 2022 Apr. 1, 2023 Apr. 1, 2023 Accepted Goodwin Company's 12-month, 16% note in settlement of a $53,400...
-
You buy TEN November USX put options with a strike price of CAD 1.2456. Option premium is 1cent per USD(0.01CAD). On the settlement day the spot price of USD/CAD is 1.2859. What will be your gain or...
-
Sweden Ltd manufactures cabinets. You work in the accounting department and have been tasked with preparing the Budget for the next month. Sweden makes two products: Premium cabinets - large cabinets...
-
Name: Address Class Identification Address 10.250.1.1 150.10.15.0 192.14.2.0 148.17.9.1 193.42.1.1 126.8.156.0 220.200.23.1 230.230.45.58 177.100.18.4 119.18.45.0 249.240.80.78 199.155.77.56...
-
Summarize the capabilities of Microsoft Teams that you think will be helpful for managing aspects of your project this term, and projects in general
-
Problem 3.5 (4 points). We will prove, in steps, that rank (L) = rank(LT) for any LE Rnxm (a) Prove that rank (L) = rank (LTL). (Hint: use Problem 3.4.) (b) Use part (a) to deduce that that rank(L) =...
-
Calls to a college emergency hotline for the past months are as follows (with the earliest month shown first): 50, 35, 25, 40, 45, 35, 20, 30, 35, 20, 15, 40, 55, 35, 25, 55, 55,40, 35, 60, 75,...
-
Replace all monetary values in Problem 8-44 with the following utilities: (a) What do you recommend, based on expected utility? (b) Is the investor a risk seeker or a risk avoider? Justify your...
-
The road system around the hotel complex (node 1) near a large amusement park (node 11) is shown in Figure 5.24. The numbers by the nodes represent the traffic flow in hundreds of cars per hour. What...
-
Calculate ratios (Learning Objective 4) The financial statements of Natures Health Foods include the following items: Requirements Compute the following ratios for the current year: a. Current ratio...
-
More ratio analysis (Learning Objective 4) Big Bend Picture Frames has asked you to determine whether the companys ability to pay current liabilities and total liabilities improved or deteriorated...
-
Compute profitability ratios (Learning Objective 4) Compute four ratios that measure Bonapartes ability to earn profits. The companys comparative income statement follows. The data for 2004 are given...
![Mobile App Logo](https://dsd5zvtm8ll6.cloudfront.net/includes/images/mobile/finalLogo.png)
Study smarter with the SolutionInn App