User Account

All Pages

Identify the relevant costs and revenues for the

Assignment Help Accounting Basics
Reference no: EM13569657

Homeowners Heroes Inc., manufactures household products such as win-dows, light fixtures, ladders, and work tables. During the year it produced 10,000 Model 10X windows but only sold 5,000 units at $40 each. The remaining units cannot be sold through normal channels. Cost for inven-tory purposes on December 31 included the following data on the unsold units:

Materials.... ... .... .... .... .... ... .... .... .... ... .... .... ... $10.00

Labor . . . .... ... .... .... .... .... ... .... .... .... ... .... .... ... 5.00

Variable overhead. .... .... .... ... .... .... .... ... .... .... ... 3.00

Fixed overhead.... .... .... .... ... .... .... .... ... .... .... ... 2.00

Total cost per window . . .... ... .... .... .... ... .... .... ... $20.00

Homeowners Heroes can sell the 5,000 windows at a liquidation price of $20.00 per window, but it will incur a packaging and shipping charge of $7.50 per window.

Required:

1. Identify the relevant costs and revenues for the liquidation sale alter-native. Is Homeowners Heroes better off accepting the liquidation price rather than doing nothing?

2. Assume that Model 10X can be reprocessed to another size window, Model 20X, which will require the same amount of labor and LO7 LO8 Chapter 10 – Cost Analysis for Management Decision Making 551overhead as was required to initially produce, but sells for only $33. Determine the most profitable course of action – liquidate or reprocess.

Homeowners Heroes Inc., manufactures household products such as win-dows, light fixtures, ladders, and work tables. During the year it produced 10,000 Model 10X windows but only sold 5,000 units at $40 each. The remaining units cannot be sold through normal channels. Cost for inven-tory purposes on December 31 included the following data on the unsold units:

Materials.... ... .... .... .... .... ... .... .... .... ... .... .... ... $10.00

Labor . . . .... ... .... .... .... .... ... .... .... .... ... .... .... ... 5.00

Variable overhead. .... .... .... ... .... .... .... ... .... .... ... 3.00

Fixed overhead.... .... .... .... ... .... .... .... ... .... .... ... 2.00

Total cost per window . . .... ... .... .... .... ... .... .... ... $20.00

Homeowners Heroes can sell the 5,000 windows at a liquidation price of $20.00 per window, but it will incur a packaging and shipping charge of $7.50 per window.

Required:

1. Identify the relevant costs and revenues for the liquidation sale alter-native. Is Homeowners Heroes better off accepting the liquidation price rather than doing nothing?

2. Assume that Model 10X can be reprocessed to another size window, Model 20X, which will require the same amount of labor and LO7 LO8 Chapter 10 - Cost Analysis for Management Decision Making 551overhead as was required to initially produce, but sells for only $33. Determine the most profitable course of action - liquidate or reprocess.

Reference no: EM13569657

Questions Cloud

Use the accounting standards codification asc database to : use the accounting standards codification asc database to determine the precise reference that represents the
Calculate the return on assets return on sales and asset : information about two video game companies was recently taken from te companies annual reports. virtual videos and
The united states has fought many wars in last two : the united states has fought many wars in last two centuries.the reasons why the united states went to war varied
Haskell brothers products inc manufactures a liquid product : haskell brothers products inc. manufactures a liquid product in one department. due to the nature of the product and
Identify the relevant costs and revenues for the : homeowners heroes inc. manufactures household products such as win-dows light fixtures ladders and work tables. during
In year 1 joe josephs cpa reviewed lander companys : in year 1 joe josephs cpa reviewed lander companys financial statements. however in year 2 the lander company hired
Research the responsibility of a critical thinker in a : research the responsibility of a critical thinker in a contemporary society. you may choose any topic that deals with a
Tom purchased a 10-year jefferson city municipal bond with : tom purchased a 10-year jefferson city municipal bond with a coupon rate of 5. if a comparable bonds current yield is
Leila company began an operating lease arrangement with : leila company began an operating lease arrangement with debco industries which was slated to begin on january 1 at

Reviews

Write a Review

Accounting Basics Questions & Answers

  Sole-proprietorship business

You have started a sole-proprietorship business. Itis a department store selling groceries. You receive payment for the sales made either through a credit card or cash. You pay your suppliers on a credit basis of 30 days. To efficiently manage acc..

  Question on private business competition

Choose an article on Private Business Competition from a professional, economic, or management journal published in the last ten years such as The Freeman: Ideas On Liberty, The Economist, Forbes, The Cato Journal, Harvard Business Review, or Sloa..

  What are the low risk auditing ares for the home depots

1. what are the low risk auditing ares for the home depots 2. If management of the Home Depot faced tremendous pressure regarding the entity's financial performance, what opportunities might exist for them to engage in fraudulent financial reporti..

  Preferred stock or the current stock

Assume AirJet Best Parts has also a preferred stock issue. The most recent dividend per share paid on the stock was also $1.50, the same as the common stock. Which one would you think has a higher price, the preferred stock or the current stock? E..

  Exercise 11-9 dividends on common and cumulative preferred

exercise 11-9 dividends on common and cumulative preferred stock l.o. c2 wades outstanding stock consists of 46000

  Colter company prepares monthly cash budgets relevant data

colter company prepares monthly cash budgets. relevant data from operating budgets for 2014

  Prepare the entry to record bad debt expense

Instead of estimating the uncollectibles at 2% of net sales, assume that 10% of accounts receivable will prove to be uncollectible. Prepare the entry to record bad debt expense.

  Total direct labor variance

The standard labor time for the Cutting and Sewing departments is 0.20 hour and 0.30 hour per unit, respectively.What is the total direct labor variance for (1) the cutting department?

  Result in gross income or deductions

Bill is cash basis calendar year taxpayer. Which of the following December items result in gross income or deductions for the current year?

  Garnett co expects to purchase 180000 of materials in july

garnett co. expects to purchase 180000 of materials in july and 210000 of materials in august. three-fourths of all

  Lowest risk of loss for the organization explain

Which payment plan has the lowest risk of loss for the organization? Explain

  Generally accepted auditing standards

Prepare a 700-1,050-word paper in which you explain the nature and functions of auditing. Relate your explanation to the audit functions in your organization, or an organization with which you are familiar. In your paper, be sure to address the fo..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd