13 Jane Finch started a company to manufacture and sell dental accessories last year. Jane was able to increase her sales and (variable costing) net operating income (NOI) in Year 2. Below are her selected actual operating results for the first two years of operation (her cost structure and selling prices were the same in Year 1 and Year 2). She allocates her fixed manufacturing overhead costs to the number of units produced in each year. Year 2 35,000 Year 1 Units produced 35,000| Units sold Absorption costing NOI Variable costing NOI 31,000 36,000 ?? ?? $ 85,000 S 110,000| What was the total net operating income under absorption costing for the two years (Year1+Year 2)? A. $108,000 B. $195,000 C. $220,000 D. $201,000 E. None of the above

13 Jane Finch started a company to manufacture and sell dental accessories last year. Jane was able to increase her sales and (variable costing) net operating income (NOI) in Year 2. Below are her selected actual operating results for the first two years of operation (her cost structure and selling prices were the same in Year 1 and Year 2). She allocates her fixed manufacturing overhead costs to the number of units produced in each year. Year 2 35,000 Year 1 Units produced 35,000| Units sold Absorption costing NOI Variable costing NOI 31,000 36,000 ?? ?? $ 85,000 S 110,000| What was the total net operating income under absorption costing for the two years (Year1+Year 2)? A. $108,000 B. $195,000 C. $220,000 D. $201,000 E. None of the above

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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High Country, Incorporated, produces and sells many recreational products. The company just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant's operation: Beginning inventory Units produced Units sold Selling price per unit Selling and administrative expenses: Variable per unit Fixed (per month) Manufacturing costs: Direct materials cost per unit Direct labor cost per unit Variable manufacturing overhead cost per unit Fixed manufacturing overhead cost (per month) Required: 1. Assume the company uses absorption costing. a. Calculate the camp cot's unit product cost. b. Prepare an income statement for May. 2. Assume the company uses variable costing. a. Calculate the camp cot's unit product cost. b. Prepare a contribution format income statement for May. 0 46,000 41,000 $83 $4 $ 565,000 $ 16 $ 8 $1 $ 782,000 Complete this question by entering your answers in…
High Country, Incorporated, produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant's operation: Beginning inventory 0 Units produced 43, 000 Units sold 38,000 Selling price per unit $ 80 Selling and administrative expenses: Variable per unit $ 3 Fixed (per month) $ 564,000 Manufacturing costs: Direct materials cost per unit $ 15 Direct labor cost per unit $ 7 Variable manufacturing overhead cost per unit $ 3 Fixed manufacturing overhead cost (per month) $ 817,000 Management is anxious to assess the profitability of the new camp cot during the month of May. Required: 1. Assume that the company uses absorption costing. a. Calculate the unit product cost. b. Prepare an income statement for May. 2. Assume that the company uses variable costing. a. Calculate the unit product cost. b. Prepare a…
Aces Incorporated, a manufacturer of tennis rackets, began operations this year. The company produced 7,450 rackets and sold 5,630. Each racket was sold at a price of $90. Fixed overhead costs are $96,850 per year, and fixed selling and administrative costs are $68,200 per year. The company also reports the following per unit variable costs for the year. Direct materials $ 12 Direct labor 8 Variable overhead 5 Variable selling and administrative expenses 2 Prepare an income statement under variable costing.
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Sampson Company operates a manufacturing facility where several products are made. Deach product is considered a business segment, and the product managers have the opportunity to receive a bonus based on the profit of the segment. Franco Hopper is the manager for the scissors product line. Production and sales for the scissors product line loene for the past three years are shown below: Year 1: Year 2: Year 3: Units produced 100,000 125,000 160,000 Units sold 100,000 100,000 100,000 Sales price per unit 12.00 12.00 12.00 Variable manufacturing cost per unit 5.00 5.00 5.00 Total fixed manufacturing cost 200,000 200,000 200,000 Hopper’s bonus is .5% of the gross profit of the scissors product line, based on absorption costing. Upper management is discussing changing the bonus system so that bonuses are based on operating income using variable costing. Hopper is opposed to this change and has been trying to convince the other product managers to join him in voicing their…
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Chapter 6: A Closer Look on Cost Accounting The company makes 2,350 units of product X a year, requiring a total os 3.300 machine hours, 250 orders and 200 inspection hours per year. The product's direct material cost is P201.50 and its direct labor cost in P211.11 per unit. The product sells for P590 per unit. According to the activity-based costing system, the gross margin for product X is? 423,087.50 b. 350,435.50 c. 416,890 d. None of the choice a. 56. The following information is available for Mary Corp. Activity Pool Setups Quality Inspections Assembly (direct labor hour) What is the activity rate for setups? Activity Base 50,000 120,000 400,000 Budgeted Amount 300,000 600,000 2,000,000 a. P5.09 c. РО.75 d. P58.00 b. Рб.00 The activity rate for quality inspection is: с. Рб.00 d. P5.09 a. P5.29 b. P5.00