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1) Assume that no changes are made to the selling price or costs, calculate the amount of units that Thermo Blast must sell: a. To breakeven b. To attain the estimated net profit 2) Determine the alternative that Thermo Blast should select to achieve its Net profit goal. Part B 3) By reference to the above data, explain: a. Variable costs in the context of cost-volume-profit (CPV) analysis? b. Fixed costs in the context of CPV analysis? c. Contribution margin in the context of CPV analysis? Problem Set 2 Carrie's Limited has two departments, the assembly department and the testing department in its brake-pad manufacturing plant, where each brake-pad is conveyed through each department. Carrie's process-costing system consist of two cost categories: Single direct cost (direct materials) and a single indirect-cost category (conversion costs). Direct materials are added at the beginning of the process. Conversion costs are added evenly during the process. When the assembly department finishes work on each brake-pad, it is immediately transferred to testing. Carrie's uses the weighted-average method of process costing. Data for the assembly department for October 2019 are as follows: Words in 18 Physical Units (Brake Pads) 6.000 Direct Materials $1.200.000 Conversion Costs $ 100.750

1) Assume that no changes are made to the selling price or costs, calculate the amount of units that Thermo Blast must sell: a. To breakeven b. To attain the estimated net profit 2) Determine the alternative that Thermo Blast should select to achieve its Net profit goal. Part B 3) By reference to the above data, explain: a. Variable costs in the context of cost-volume-profit (CPV) analysis? b. Fixed costs in the context of CPV analysis? c. Contribution margin in the context of CPV analysis? Problem Set 2 Carrie's Limited has two departments, the assembly department and the testing department in its brake-pad manufacturing plant, where each brake-pad is conveyed through each department. Carrie's process-costing system consist of two cost categories: Single direct cost (direct materials) and a single indirect-cost category (conversion costs). Direct materials are added at the beginning of the process. Conversion costs are added evenly during the process. When the assembly department finishes work on each brake-pad, it is immediately transferred to testing. Carrie's uses the weighted-average method of process costing. Data for the assembly department for October 2019 are as follows: Words in 18 Physical Units (Brake Pads) 6.000 Direct Materials $1.200.000 Conversion Costs $ 100.750

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1) Assume that no changes are made to the selling price or costs, calculate the amount of units that Thermo Blast must sell: a. To breakeven b. To attain the estimated net profit 2) Determine the alternative that Thermo Blast should select to achieve its Net profit goal. Part B 3) By reference to the above data, explain: a. Variable costs in the context of cost-volume-profit (CPV) analysis? b. Fixed costs in the context of CPV analysis? c. Contribution margin in the context of CPV analysis? Problem Set 2 Carrie's Limited has two departments, the assembly department and the testing department in its brake-pad manufacturing plant, where each brake-pad is conveyed through each department. Carrie's process-costing system consist of two cost categories: Single direct cost (direct materials) and a single indirect-cost category (conversion costs). Direct materials are added at the beginning of the process. Conversion costs are added evenly during the process. When the assembly department finishes work on each brake-pad, it is immediately transferred to testing. Carrie's uses the weighted-average method of process costing. Data for the assembly department for October 2019 are as follows: Work in process, October 1* Started during October 2019 Physical Units (Brake Pads) 6,000 21,000 Completed during October 2019 23,500 Direct Materials $1,200,000 Conversion Costs $ 400,750
Transcribed Image Text:1) Assume that no changes are made to the selling price or costs, calculate the amount of units that Thermo Blast must sell: a. To breakeven b. To attain the estimated net profit 2) Determine the alternative that Thermo Blast should select to achieve its Net profit goal. Part B 3) By reference to the above data, explain: a. Variable costs in the context of cost-volume-profit (CPV) analysis? b. Fixed costs in the context of CPV analysis? c. Contribution margin in the context of CPV analysis? Problem Set 2 Carrie's Limited has two departments, the assembly department and the testing department in its brake-pad manufacturing plant, where each brake-pad is conveyed through each department. Carrie's process-costing system consist of two cost categories: Single direct cost (direct materials) and a single indirect-cost category (conversion costs). Direct materials are added at the beginning of the process. Conversion costs are added evenly during the process. When the assembly department finishes work on each brake-pad, it is immediately transferred to testing. Carrie's uses the weighted-average method of process costing. Data for the assembly department for October 2019 are as follows: Work in process, October 1* Started during October 2019 Physical Units (Brake Pads) 6,000 21,000 Completed during October 2019 23,500 Direct Materials $1,200,000 Conversion Costs $ 400,750
Work in process, October 31 Total costs added during October 2019 x Degree of completion: direct materials, 100%; conversion costs, 60%. y Degree of completion: direct materials, 100%; conversion costs, 70%. Required: Part A 3,500 $4,600,000 Part B 1. Compute equivalent units in the assembly department, for each cost category? 2. Summarize total assembly department costs for October 2019 for each cost category, and calculate the cost per equivalent unit? $2,456,500 3. Assign total costs to units completed and transferred out and to units in ending work in process? 4) By reference to the above data: a. What are the similarities between job-order and process costing? b. What are the differences between job-order and process costing?
Transcribed Image Text:Work in process, October 31 Total costs added during October 2019 x Degree of completion: direct materials, 100%; conversion costs, 60%. y Degree of completion: direct materials, 100%; conversion costs, 70%. Required: Part A 3,500 $4,600,000 Part B 1. Compute equivalent units in the assembly department, for each cost category? 2. Summarize total assembly department costs for October 2019 for each cost category, and calculate the cost per equivalent unit? $2,456,500 3. Assign total costs to units completed and transferred out and to units in ending work in process? 4) By reference to the above data: a. What are the similarities between job-order and process costing? b. What are the differences between job-order and process costing?
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