ACTG 2020 Study Guide - Midterm Guide: Coated Paper, Paper Machine, Trin

• School: York University
• Department: Accounting
• Course: ACTG 2020
• Professor: Sylvia Hsu

Document Summary

Primo paper, inc. , has three paper mills, one of which is located in seattle, washington. The seattle mill produces 200 different types of coated and uncoated specialty printing papers. This large variety of products was the result of a full-line marketing strategy adopted by primo"s management. Management was convinced that the value of variety more than offset the extra costs of the increased complexity. During 2007, the seattle mill produced 240,000 tons of coated paper and 160,000 tons of uncoated stock. Of the 400,000 tons produced, 360,000 were sold. Thirty different products account for 80 percent of the tons sold. Thus, 170 products are classified as low-volume products. Lightweight lime hopsack in cartons (llhc) is one of the low-volume products. Llhc is produced in rolls, converted into sheets of paper, and then sold in cartons. In 2007, the cost to produce and sell one ton of llhc was as follows: Paper machine (1. 25 tons @ per ton)