Deelux manufactures paint. The company charges the following standard unit costs to production on the basis of static budget volume of 30,000 cans of paint per month: Direct materials………………………………………………………………………………. $2.50 Direct labour………………………………………………………………………………….. 2.00 Manufacturing overhead………………………………………………………………….. 1.50 Standard unit cost……………………………………………………………………………$6.00 Deelux allocates overhead based on standard machine hours and uses the following monthly flexible budget for overhead: Deelux actually produced 33,000 cans of paint using 3,100 machine hours. Actual variable overhead was $16,200, and fixed overhead was $32,500. Compute the total overhead variance, the overhead flexible budget variance, and the production volume variance.

Budgeted Costs; kaizen improvements. DryPool T-Shirt Factory manufactures plain white and solid colored T-shirts. Inputs include the following:
Price
Quantity
Cost per unit of output
Fabric
$ 6 per yard
1 yard per unit
$6 per unit
Labor
$12 per DMLH
0.25 DMLH per unit
$3 per unit
Additionally, the colored T-shirts require 3 ounces of dye per shirt at a cost of $0.20 per ounce. The shirts sell for $15 each for white and $20 each for colors. The company expects to sell 12,000 white T-shirts and 60,000 colored T-shirts uniformly over the year.
DryPool has the opportunity to switch from using the dye it currently uses to using an environmentally friendly dye that costs $1.00 per ounce. The company would still need three ounces of dye per shirt. DryPool is reluctant to change because of the increase in costs (and decrease in profit) but the Environmental Protection Agency has threatened to fine them $102,000 if they continue to use the harmful but less expensive dye.
Required
1. Given the preceding information, would DryPool be better off financially by switching to the environmentally friendly dye? (Assume all other costs would remain the same.)
2. Assume DryPool chooses to be environmentally responsible regardless of cost, and it switchs to the new dye. The production manager suggests trying Kaizen costing. If DryPool can reduce fabric and labor costs each by 1% per month, how close will it be at the end of 12 months to the gross profit it would have earned before switching to the more expensive dye? (Round to the nearest dollar for calculating cost reductions)
3. Refer to requirement 2. How could the reduction in material and labor costs be accomplished? Are there any problems with this plan.

What is the amount of dividends per share on common stock?

a. $9.50

b. $8.00

c. $17.50

d. $1.50

e. None of these.

Gross and Contribution Margins

the concepts of gross margin and contribution margin and how companies use these measures for business analysis.According to the authors, Datar and Rajan (2018), the gross margin measures how much a company can charge for its products over and above the cost of acquiring or producing them. Contribution margin indicates how much of a company’s revenues are available to cover fixed costs. It helps in assessing the risk of losses (p. 88). Datar and Rajan (2018) go on to state gross margin and contribution margin are related but give different insights (p. 88). One such example is a company operating with a low gross margin will have low risk of loss if its fixed costs are small. What other insights or observations do you have with regard to gross margin and contribution margin? Do those insights change depending on the industry sector being considered; if so, why?

Your initial posting should be 250-500 words

Answer preview………. Different firms will always need to make decisions based on the costs incurred in different processes within the business. This explains the importance of cost accounting, in which case the gross and contribution margins make a critical contribution to decision making within the business. One of the most notable aspects of the concepts is their position on variable and fixed cost in the business (Horngren, Datar, & Rajan, 2014). In this case, it would be important to consider the contribution margin as being an indicator of the difference between sales and the variable costs of making the products in question. The greater the margin, the lower the variable costs of the said production…….

APA 315 words Added to cart

Question 1:In 2016, the 4 x 4 Shop is a large retailer of pickup trucks. An income statement for the company’s Seat Liner Department for the most recent quarter is presented below:The 4×4 ShopIncome Statement – Seat Liner DepartmentFor the First Quarter of 2016Sales$700,000Less: Cost of goods sold250,000Gross margin450,000Less: Operating expenses:Selling expenses$195,000Administrative expenses145,000340,000Net income$110,000The liners sell, on average, for $350 each. The department’s variable selling expenses are $35 per liner sold. The remaining selling expenses are fixed. The administrative expenses are 25% variable and 75% fixed. The company purchases its liners from a supplier at a cost of $125 per liner.Required:Prepare an income statement for the quarter, using the contribution approach.Question 2:ABC Company’s total overhead costs at various levels of activity are presented below:Machine HoursTotal Overhead CostsMarch60,000$216,800April50,000194,000May70,000239,600June80,000262,400Assume that the overhead costs above consist of utilities, supervisory salaries, and maintenance. At the 50,000-machine-hour level of activity, these costs are presented below:Utilities (V)$54,000Supervisory salaries (F)62,000Maintenance (M)78,000Total overhead costs$194,000Legend: V=Variable, F=Fixed, M=Mixed The company wants to break down the maintenance cost into its basic variable and fixed cost elements.Required:Estimate the maintenance cost for June.Use the high-low method to estimate the cost formula for maintenance cost.Estimate the total overhead cost at an activity level of 55,000 machine hours, using the separate estimates you obtained for its components.Question 3:The following is Arkadia Corporation’s contribution format income statement for last month:Sales$1,200,000Less: Variable expenses800,000Contribution margin400,000Less: Fixed expenses300,000Operating income$100,000The company has no beginning or ending inventories and produced and sold 20,000 units during the month.Required:What is the company’s contribution margin ratio?What is the company’s break-even in units?If sales increase by 100 units, by how much should operating income increase?How many units would the company have to sell to attain target operating income of $125,000?What is the company’s margin of safety in dollars?What is the company’s degree of operating leverage?If the tax rate is 30%, how many units must be sold to attain an after tax profit of $84,000?Question 4:Fill in the missing amounts in each of the eight case situations below. Each case is independent of the others. (Hint: One way to find the missing amounts would be to prepare a contribution-format income statement for each case, enter the known data, and then compute the missing items.)Assume that only one product is being sold in each of the following four case situations:CaseUnits SoldSalesVariable ExpensesContribution Margin Per UnitFixed ExpensesOperating Income (Loss)19,000$270,000$162,000A$90,000B2C$350,000D$15$170,000$40,000320,000E$280,000$16F$35,00045,000$160,000GH$82,000($12,000)Assume that more than one product is being sold in each of the following four case situations:CaseSalesVariable ExpensesAve Contribution Margin %Fixed ExpensesOperating Income (Loss)1$450,000A40%B$65,0002$200,000$130,000C$60,000D3EF80%$470,000$90,0004$300,000$90,000GH($15,000)