¹4C8.50 The following data relate to a year's budgeted activity for Rickuse Limited, a company that manufactures one product: Units 40,000 140,000 180,000 130,000 50,000 Per unit $8.00 2.00 3.00 0.50 0.80 Beginning inventory Production Available for sale Sales Ending inventory Selling price Variable manufacturing costs Variable selling, general, and administrative expenses Fixed manufacturing costs (based on 100,000 units) Fixed selling, general, and administrative expenses (based on 100,000 units) Total fixed costs and expenses remain unchanged within the relevant range of 25,000 units to a total capacity of 160,000 units. Instructions a. Calculate the projected annual break-even sales in units. b. Calculate the projected net income for the year under variable costing. c. Determine the company's projected net income for the year under absorption (full) costing, assuming the fixed overhead adjustment is closed to the cost of goods sold.

¹4C8.50 The following data relate to a year's budgeted activity for Rickuse Limited, a company that manufactures one product: Units 40,000 140,000 180,000 130,000 50,000 Per unit $8.00 2.00 3.00 0.50 0.80 Beginning inventory Production Available for sale Sales Ending inventory Selling price Variable manufacturing costs Variable selling, general, and administrative expenses Fixed manufacturing costs (based on 100,000 units) Fixed selling, general, and administrative expenses (based on 100,000 units) Total fixed costs and expenses remain unchanged within the relevant range of 25,000 units to a total capacity of 160,000 units. Instructions a. Calculate the projected annual break-even sales in units. b. Calculate the projected net income for the year under variable costing. c. Determine the company's projected net income for the year under absorption (full) costing, assuming the fixed overhead adjustment is closed to the cost of goods sold.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

The following data relate to a year's budgeted activity for Blossom Limited, a company that manufactures one product: Beginning inventory Production Available for sale Sales Ending inventory Units (a) 41,360 144,760 186,120 134,420 Selling price Variable manufacturing costs Variable selling, general, and administrative expenses Fixed manufacturing costs (based on 100,000 units) Fixed selling, general, and administrative expenses (based on 100,000 units) Break-even sales 51,700 Per unit $8.00 3.00 3.00 Total fixed costs and expenses remain unchanged within the relevant range of 25,000 units to a total capacity of 160,000 units. units 0.55 0.85 Calculate the projected annual break-even sales in units. (Round answer to O decimal places, e.g. 5,275.)
A company offers three products, A,B,C The current budget for the upcoming accounting period is presented below, by product: A B C # of units 18 12 30 Selling price per unit ($) 75 50 60 Variable cost per unit ($) 25 20 15 Fixed costs (total $) 500 360 900 There is a different customer market for each of these products. Fixed costs reflect product-specific machinery. Required 1. Identify which of the two methods to compute the break-even point best suits this scenario. 2. Describe why the method you identified in (1) best suits this scenario. 3. Compute the break-even point in units using this method.
6. Bloomsbury plc sells one product for which data for a budgeted period are given below: Selling price per unit Variable cost per unit Fixed cost per unit 80 48 16 Fixed costs are based on a budgeted level of activity of 5,000 units. Calculate the total costs of production of 5,000 units: A. £80,000 B. £240,000 C. £320,000 D. £400,000.
The following sales were budgeted for the year: Product A Product B Product C Demand (units) 1,000 2,000 3,000 Selling price $15 $20 $30 Profit per unit $2 $5 $2 Actual sales for the year showed the following results: Product A Product B Product C Units sold 1,100 2,050 2,800 Sales value $17,050 $38,950 $86,800 Profit $3,080 $10,455 $6,160 What is the sales mix variance? $2,292 Adverse $1,845 Favorable $200 Favorable $50 Favorable
A company has the following budgeted and actual cost data for manufacturing 2,000 Product X units: Direct materials $50 per unit Direct labor $40 per unit Variable manufacturing overhead $ 5 $40,000 per year per unit Fixed manufacturing Overhead Product X sells for $200 per unit. Assume no beginning or ending inventories. The Gross Profit for selling 15 Product X units is %24
6. Prepare a budgeted income statement using the information shown. Sales units 84,000 22 Sales price per unit Uncollectible expense Direct material per unit Direct labor hours per unit Direct labor rate per hour Manufacturing overhead Variable sales and administration expenses per unit sold Fixed sales and administration expenses 1% $4 $ 1.50 0.8 19 $14,000 $ 2.10 $23,000 Тахes 15%* *of income before taxes %24
Winston Co. had two products code named X and Y. The firm had the following budget for August: Product X Product Y Total Sales $ 190,000 $ 486,000 $ 676,000 Variable Costs 114,000 194,400 308,400 Contribution Margin $ 76,000 $ 291,600 $ 367,600 Fixed costs 14,000 100,000 114,000 Operating Income $ 62,000 $ 191,600 $ 253,600 Selling Price per unit $ 100 $ 50 On September 1, the following actual operating results for August were reported: Product X Product Y Total Sales $ 361,600 $ 504,000 $ 865,600 Variable Costs 197,000 218,000 415,000 Contribution Margin $ 164,600 $ 286,000 $ 450,600 Fixed costs 52,000 110,000 162,000 Operating Income $ 112,600 $ 176,000 $ 288,600 Units Sold 3,000 9,000 Total industry volume for both products X and Y was…
Crane Corporation's master budget for the year is shown below: Sales (60,700 units) Cost of goods sold: Direct materials Direct labor Overhead (variable overhead applied at 45% of direct labor cost) Gross profit Selling expenses: Sales commissions (all variable) Rent (all fixed) Insurance (all short-term fixed) General expenses: Salaries (all short-term fixed) Rent (all short-term fixed) Depreciation (all short-term fixed) Operating income $ 212,450 497,740 247,000 Required 1 $ 160,248 47,000 37,000 Required 2 95,500 80,500 57,000 $ 2,306,600 957,190 $ 1,349,410 Required: 1. During the year, the company manufactured and sold 55,700 units of product. Prepare a flexible budget for this level of output. 2. Now suppose that the actual level of output was 65,700 units. Prepare a flexible budget for this output level. 477, 248 $ 872,162 Complete this question by entering your answers in the tabs below. During the year, the company manufactured and sold 55,700 units of product. Prepare a…
Required Information [The following information applies to the questions displayed below.] The fixed budget for 21,500 units of production shows sales of $559,000; variable costs of $64,500; and fixed costs of $142,000. If the company actually produces and sells 26,500 units, calculate the flexible budget Income. Sales Variable costs Contribution margin Fixed costs Income ------Flexible Budget-..... Variable Amount Total Fixed per Unit Cost $ 689,000 689,000 ------Flexible Budget at 21,500 units $ $ 0 0 26,500 units $ $ 0 0
Management at Marvin Limited has provided the following budgeted and actual annual figures for one of its products based on variable costing: Output (production and sales) Sales revenue Direct materials Direct labour Variable overheads Fixed overheads Required: a) b) c) Budget 18,000 units £ Calculate the following: 576,000 (27,000 metres) 132,300 (28,800 hours) 273,600 (28,800 hours) 115,200 8,000 Construct a flexed budget for the actual units made and sold. i. ii. iii. iv. Use your answer to a) above to calculate the sales volume contribution margin variance and interpret this result. Actual 20,200 units £ 828,200 (27,270 metres) 136,350 (40,400 hours) 391,880 (40,400 hours) 193,920 12,150 Sales price variance; Direct materials price and usage variances; Direct labour wage rate and efficiency variances; and Fixed overhead expenditure variance. d) Briefly explain how standard costing and variance analysis support budgetary control within an organisation.
Winston Company had two products code named X and Y. The firm had the following budget for August: Product X $ 296,040 197,360 $ 98,680 50,000 Product Y $ 541,000 216,400 $324,600 108,000 $216,600 $ 50 $ 48,680 $ 120 Sales Variable Costs Contribution Margin Fixed costs Operating Income Selling Price per unit On September 1, the following actual operating results for August were reported: Product X $366,800 203,500 $ 163,300 58,500 $ 104,800 3,170 Sales Variable Costs Contribution Margin Fixed costs Operating Income Units Sold Product Y $ 546,800 224,500 $322,300 116,500 $ 205,800 9,850 Total industry volume for both products X and Y was estimated to be 138,500 units at the time of the budget. Actual industry volume for the period for products X and Y was 106,800 units. The contribution margin sales volume variance for Product X is: Multiple Choice $12,500 unfavorable. $15,800 favorable. $23,200 favorable. $23,200 unfavorable. Total $ 837, 040 413,760 $ 423,280 158,000 $ 265,280 $28,120…
Perez Manufacturing Company established the following standard price and cost data. Sales price Variable manufacturing cost $ 8.98 per unit $ 3.40 per unit Fixed manufacturing cost Fixed selling and administrative cost $ 2,000 total $ 600 total Perez planned to produce and sell 2,300 units. Actual production and sales amounted to 2,600 units. Required a. Prepare the pro forma income statement in contribution format that would appear in a master budget. b. Prepare the proforma Income statement in contribution format that would appear in a flexible budget. Complete this question by entering your answers in the tabs below. Required A Required B Prepare the pro forma income statement in contribution format that would appear in a master budget. PEREZ MANUFACTURING COMPANY Pro Forma Income Statement Master Budget 2,300 Units