A myFranklin for Sherri * A 11-2: Case Study 3 Assignme X A McGraw-Hill Connect X Question 1 - 11-2: Case Stud X Search Results | Course Hero X + X C A ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=08launchUrl=https6253A%252F%252FIms.mheducation.com%252Fmghmiddleware%252Fm.. @ # IS A myFranklin Login |... 3 Sign In it140.pdf = FreeTaxUSA .- Su. Course Hero APA citing 11-2: Case Study 3 Assignment Saved Help Save & Exit Submit Check my work TufStuff, Incorporated, sells a wide range of drums, bins, boxes, and other containers that are used in the chemical industry. One of the company's products is a heavy-duty corrosion-resistant metal drum, called the WVD drum, used to store toxic wastes. Production is constrained by the capacity of an automated welding machine that is used to make precision welds. A total of 2,000 hours of welding 25 time is available annually on the machine. Because each drum requires 0.4 hours of welding machine time, annual production is points limited to 5,000 drums. At present, the welding machine is used exclusively to make the WVD drums. The accounting department has provided the following financial data concerning the WVD drums: eBook WVD Drums Selling price per drum $ 149.00 Print Cost per drum: Direct materials $ 52. 10 References Direct labor ($18 per hour) 3.60 Manufacturing overhead 4.50 Selling and administrative expense 29. 80 90.00 Margin per drum $ 59.00 Management believes 6,000 WVD drums could be sold each year if the company had sufficient manufacturing capacity. As an alternative to adding another welding machine, management has considered buying additional drums from an outside supplier. Harcor Industries, Incorporated, a supplier of quality products, would be able to provide up to 4,000 WVD-type drums per year at a price of $138 per drum, which TufStuff would resell to its customers at its normal selling price after appropriate relabeling. Megan Flores, TufStuff's production manager, has suggested that the company could make better use of the welding machine by manufacturing bike frames, which would require only 0.5 hours of welding machine time per frame and yet sell for far more than the drums. Megan believes that TufStuff could sell up to 1,600 bike frames per year to bike manufacturers at a price of $239 each. The accounting department has provided the following data concerning the proposed new product: Mc Graw Hill Type here to search 5:02 AM O gi O W 61"F A 9 9 4/23/2022A myFranklin for Sherri * A 11-2: Case Study 3 Assignme X A McGraw-Hill Connect X Question 1 - 11-2: Case Stud X Search Results | Course Hero X + X C A ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=08launchUrl=https6253A%252F%252FIms.mheducation.com%252Fmghmiddleware%252Fm.. @ # IS A myFranklin Login |.. & Sign In 3 it140.pdf = FreeTaxUSA .- Su. Course Hero APA citing 11-2: Case Study 3 Assignment Saved Help Save & Exit Submit Check my work Bike Frames Selling price per frame $ 239.00 Cost per frame: Direct materials $ 99.40 25 Direct labor ($18 per hour) 28.80 36.00 points Manufacturing overhead Selling and administrative expense 47.80 212.00 Margin per frame $ 27.00 eBook The bike frames could be produced with existing equipment and personnel. Manufacturing overhead is allocated to products on the Print basis of direct labor-hours. Most of the manufacturing overhead consists of fixed common costs such as rent on the factory building. References but some of it is variable. The variable manufacturing overhead has been estimated at $1.35 per WVD drum and $1.90 per bike frame. The variable manufacturing overhead cost would not be incurred on drums acquired from the outside supplier. Selling and administrative expenses are allocated to products on the basis of revenues. Almost all of the selling and administrative expenses are fixed common costs, but it has been estimated that variable selling and administrative expenses amount to $0.75 per WVD drum whether made or purchased and would be $1.30 per bike frame. All of the company's employees-direct and indirect-are paid for full 40-hour work weeks and the company has a policy of laying off workers only in major recessions. As soon as your analysis was shown to the top management team at TufStuff, several managers got into an argument concerning how direct labor costs should be treated when making this decision. One manager argued that direct labor is always treated as a variable cost in textbooks and in practice and has always been considered a variable cost at TufStuff. After all, "direct" means you can directly trace the cost to products. "If direct labor is not a variable cost, what is?" Another manager argued just as strenuously that direct labor should he considered a fivel most at TufStuff Ala ana hard haan laid off in mar a lamala and for all practical nuimaser avaninna at the Mc Graw Hill Type here to search O O W 5:03 AM 61"F A 9 9 4/23/2022A myFranklin for Sherri * A 11-2: Case Study 3 Assignme X A McGraw-Hill Connect X Question 1 - 11-2: Case Stud X Search Results | Course Hero X + X C A ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=08launchUrl=https6253A%252F%252FIms.mheducation.com%252Fmghmiddleware%252Fm.. @ # IS A myFranklin Login |. 3 Sign In & it140.pdf = FreeTaxUSA .- Su. Course Hero APA citing 11-2: Case Study 3 Assignment Saved Help Save & Exit Submit Check my work As soon as your analysis was shown to the top management team at lutStuff, several managers got into an argument concerning how direct labor costs should be treated when making this decision. One manager argued that direct labor is always treated as a variable cost in textbooks and in practice and has always been considered a variable cost at TufStuff. After all, "direct" means you can directly trace the cost to products. "If direct labor is not a variable cost, what is?" Another manager argued just as strenuously that direct labor should be considered a fixed cost at TufStuff. No one had been laid off in over a decade, and for all practical purposes, everyone at the 25 plant is on a monthly salary. Everyone classified as direct labor works a regular 40-hour workweek and overtime has not been points necessary since the company adopted Lean Production techniques. Whether the welding machine is used to make drums or frames, the total payroll would be exactly the same. There is enough slack, in the form of idle time, to accommodate any increase in total direct labor time that the bike frames would require. eBook Required: Print 1. Would you be comfortable relying on the financial data provided by the accounting department for making decisions related to the References WVD drums and bike frames? 2. Compute the contribution margin per unit. [assume direct labor is a fixed cost] 3. Compute the contribution margin per welding hour. [assume direct labor is a fixed cost] 4. Assuming direct labor is a fixed cost: a. Determine the number of WVD drums (if any) that should be purchased and the number of WVD drums and/or bike frames (if any) that should be manufactured. b. What is the increase (decrease) in net operating income that would result from this plan over current operations? 5. Compute the contribution margin per unit. [assume direct labor is a variable cost] 6. Compute the contribution margin per welding hour. [assume direct labor is a variable cost] 7. Assuming direct labor is a variable cost: a. Determine the number of WVD drums (if any) that should be purchased and the number of WVD drums and/or bike frames (if any) that should be manufactured. b. What is the increase (decrease) in net operating income that would result from this plan over current operations? Mc Graw Hill Type here to search gi W 5:04 AM O O 3 3 61'F A 9 9 4/23/2022 QA myFranklin for Sherri * A 11-2: Case Study 3 Assignme X A McGraw-Hill Connect X Question 1 - 11-2: Case Stud X Search Results | Course Hero X + X C A ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=08launchUrl=https6253A%252F%252FIms.mheducation.com%252Fmghmiddleware%252Fm... [@ * IS A myFranklin Login |.. & Sign In 3 it140.pdf = FreeTaxUSA .- Su. Course Hero APA citing 11-2: Case Study 3 Assignment Saved Help Save & Exit Submit Check my work Complete this question by entering your answers in the tabs below. 25 Req 1 Reg 2 Reg 3 Req 4A Req 48 Reg 5 Reg 6 Req 7A Req 7B points Compute the contribution margin per unit. [assume direct labor is a fixed cost] (Do not round intermediate calculations. Round your answers to 2 decimal places.) eBook Contribution Margin Print a. Purchased WVD drums per unit References b. Manufactured WVD drums per unit c. Manufactured bike frames per unit Mc Graw Hill Type here to search W 5:05 AM 3 3 61'F A 94/23/2022A myFranklin for Sherri * A 11-2: Case Study 3 Assignme X A McGraw-Hill Connect X Question 1 - 11-2: Case Stud X Search Results | Course Hero X + X C A ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=08launchUrl=https6253A%252F%252Films.mheducation.com%252Fmghmiddleware%252Fm... [@ * IS A myFranklin Login |... & Sign In 3 it140.pdf = FreeTaxUSA .- Su. Course Hero APA citing 11-2: Case Study 3 Assignment Saved Help Save & Exit Submit Check my work Complete this question by entering your answers in the tabs below. 25 points Req 1 Reg 2 Req 3 Req 4A Req 48 Req 5 Reg 6 Req 7A Req 7B Compute the contribution margin per welding hour. [assume direct labor is a fixed cost] (Round your intermediate calculations eBook and final answers to 2 decimal places.) Print Contribution Margin References 1. Manufactured WVD drums per hour 2. Manufactured Bike frames per hour Mc Graw Hill Type here to search W 5:05 AM 3 3 61'F A 94/23/2022A myFranklin for Sherri * A 11-2: Case Study 3 Assignme X A McGraw-Hill Connect X Question 1 - 11-2: Case Stud X Search Results | Course Hero X + X C A ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=08launchUrl=https6253A%252F%252Films.mheducation.com%252Fmghmiddleware%252Fm... [@ * IS A myFranklin Login |... & Sign In 3 it140.pdf = FreeTaxUSA .- Su. Course Hero APA citing 11-2: Case Study 3 Assignment Saved Help Save & Exit Submit Check my work Complete this question by entering your answers in the tabs below. 25 points Req 1 Reg 2 Reg 3 Req 4A Req 48 Req 5 Reg 6 Req 7A Req 7B Determine the number of WVD drums (if any) that should be purchased and the number of WVD drums and/or bike frames (if eBook any) that should be manufactured. [Assume direct labor is a fixed cost] Print Purchased Manufactured References WVD drums Bike frames Mc Graw Hill Type here to search W 5:05 AM 3 3 61'F A 94/23/2022A myFranklin for Sherri * A 11-2: Case Study 3 Assignme X A McGraw-Hill Connect X Question 1 - 11-2: Case Stud X Search Results | Course Hero X + X C A ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=08launchUrl=https6253A%252F%252FIms.mheducation.com%252Fmghmiddleware%252Fm.. @ * IS A myFranklin Login |.. 3 Sign In 3 it140.pdf = FreeTaxUSAS .- Su. Course Hero CAPA citing 11-2: Case Study 3 Assignment Saved Help Save & Exit Submit Check my work that should be manufactured. b. What is the increase (decrease) in net operating income that would result from this plan over current operations? 25 Complete this question by entering your answers in the tabs below. points Req 1 Req 2 Reg 3 Req 4A Req 48 Reg 5 Reg 6 Req 7A Req 7B eBook Print What is the increase (decrease) in net operating income that would result from this plan over current operations? [Assume direct labor is a fixed cost] (Round your intermediate calculations to 2 decimal places.) References Increase (decrease) in net operating income Mc Graw Hill Type here to search W 5:06 AM 3 3 61'F A 94/23/2022A myFranklin for Sherri * A 11-2: Case Study 3 Assignme X A McGraw-Hill Connect X Question 1 - 11-2: Case Stud X Search Results | Course Hero X + X C A ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=08launchUrl=https6253A%252F%252Films.mheducation.com%252Fmghmiddleware%252Fm... [@ * IS A myFranklin Login |... & Sign In 3 it140.pdf = FreeTaxUSA .- Su. Course Hero APA citing 11-2: Case Study 3 Assignment Saved Help Save & Exit Submit Check my work Complete this question by entering your answers in the tabs below. 25 points Req 1 Reg 2 Req 3 Req 4A Req 48 Reg 5 Reg 6 Req 7A Req 78 Compute the contribution margin per unit. [assume direct labor is a variable cost] (Do not round intermediate calculations. eBook Round your answers to 2 decimal places.) Print Contribution Margin References Purchased WVD drums per unit Manufactured WVD drums per unit Manufactured Bike frames per unit Mc Graw Hill Type here to search W 5:06 AM 3 0 61'F A 9 9 4/23/2022A myFranklin for Sherri * A 11-2: Case Study 3 Assignme X A McGraw-Hill Connect X Question 1 - 11-2: Case Stud X Search Results | Course Hero X + X C A ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=08launchUrl=https6253A%252F%252Films.mheducation.com%252Fmghmiddleware%252Fm... [@ * IS A myFranklin Login |... & Sign In 3 it140.pdf = FreeTaxUSA .- Su. Course Hero APA citing 11-2: Case Study 3 Assignment Saved Help Save & Exit Submit Check my work Complete this question by entering your answers in the tabs below. 25 points Req 1 Reg 2 Req 3 Req 4A Req 48 Reg 5 Reg 6 Req 7A Req 7B Assuming direct labor is a variable cost, compute the contribution margin per welding hour. (Round your intermediate eBook calculations and final answers to 2 decimal places.) Print Contribution Margin References Manufactured WVD drums per hour Manufactured Bike frames per hour Mc Graw Hill Type here to search W 5:06 AM 3 3 61'F A 94/23/2022A myFranklin for Sherri * A 11-2: Case Study 3 Assignme X A McGraw-Hill Connect X Question 1 - 11-2: Case Stud X Search Results | Course Hero X + X C A ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=08launchUrl=https6253A%252F%252Films.mheducation.com%252Fmghmiddleware%252Fm... [@ * IS A myFranklin Login |... & Sign In 3 it140.pdf = FreeTaxUSA .- Su. Course Hero APA citing 11-2: Case Study 3 Assignment Saved Help Save & Exit Submit Check my work Complete this question by entering your answers in the tabs below. 25 points Req 1 Reg 2 Reg 3 Req 4A Req 48 Req 5 Reg 6 Req 7A Req 7B [Assume direct labor is a variable cost]. Determine the number of WVD drums (if any) that should be purchased and the eBook number of WVD drums and/or bike frames (if any) that should be manufactured. Print Purchased Manufactured References WVD drums Bike frames Mc Graw Hill Type here to search W 5:07 AM 28 58 F A 9 9 4/23/2022 QA myFranklin for Sherri * A 11-2: Case Study 3 Assignme X A McGraw-Hill Connect X Question 1 - 11-2: Case Stud X Search Results | Course Hero X + X C A ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=08launchUrl=https6253A%252F%252FIms.mheducation.com%252Fmghmiddleware%252Fm.. @ * IS A myFranklin Login |.. 3 Sign In 3 it140.pdf = FreeTaxUSAS .- Su. Course Hero CAPA citing 11-2: Case Study 3 Assignment Saved Help Save & Exit Submit Check my work that should be manufactured. b. What is the increase (decrease) in net operating income that would result from this plan over current operations? 25 Complete this question by entering your answers in the tabs below. points Req 1 Req 2 Reg 3 Req 4A Req 48 Reg 5 Reg 6 Req 7A Req 7B eBook Print What is the increase (decrease) in net operating income that would result from this plan over current operations? [Assume References direct labor is a variable cost] (Do not round intermediate calculations.) Increase (decrease) in net operating income Mc Graw Hill Type here to search W 5:07 AM 28 58 F A 9 9 4/23/2022