A business operated at 100% of capacity during its first month and incurred the following costs: Production Costs (24,300 units) Amount ($) Direct materials $205,700 Direct labor $256,200 Variable factory overhead $268,900 Fixed factory overhead $103,200 Total Production Cost $834,000 Operating Expenses: Variable operating expenses $139,500 Fixed operating expenses $45,600 Total Operating Expenses $185,100 If 2,100 units remain unsold at the end of the month, what is the amount of inventory that would be reported on the absorption costing balance sheet? a. $71,638 b. $59,200 c. $72,000 d. $75,200

A business operated at 100% of capacity during its first month and incurred the following costs: Production Costs (24,300 units) Amount ($) Direct materials $205,700 Direct labor $256,200 Variable factory overhead $268,900 Fixed factory overhead $103,200 Total Production Cost $834,000 Operating Expenses: Variable operating expenses $139,500 Fixed operating expenses $45,600 Total Operating Expenses $185,100 If 2,100 units remain unsold at the end of the month, what is the amount of inventory that would be reported on the absorption costing balance sheet? a. $71,638 b. $59,200 c. $72,000 d. $75,200

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter9: Standard Costing: A Functional-based Control Approach

Section: Chapter Questions

Problem 30P: Algers Company produces dry fertilizer. At the beginning of the year, Algers had the following...

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Steeler Towel Company estimates its overhead to be $250,000. It expects to have 100,000 direct labor hours costing $2,500,000 in labor and utilizing 12,500 machine hours. Calculate the predetermined overhead rate using: A. Direct labor hours B. Direct labor dollars C. Machine hours
Baldwin Printing Company uses a job order cost system and applies overhead based on machine hours. A total of 150,000 machine hours have been budgeted for the year. During the year, an order for 1,000 units was completed and incurred the following: The accountant computed the inventory cost of this order to be 4.30 per unit. The annual budgeted overhead in dollars was: a. 577,500. b. 600,000. c. 645,000. d. 660,000.
Kennedy Appliance Inc.s Machining Department incurred 450,000 of factory overhead cost in producing hoses and valves. The two products consumed a total of 9,000 direct machine hours. Of that amount, hoses consumed 4,250 direct machine hours. Determine the total amount of factory overhead that should be allocated to hoses using machine hours as the allocation base.
Ellerson Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 278,000, direct labor cost was 189,000, and overhead cost was 523,000. During the year, 100,000 units were completed. Required: 1. Calculate the total cost of direct materials used in production. 2. Calculate the cost of goods manufactured. Calculate the unit manufacturing cost. 3. Of the unit manufacturing cost calculated in Requirement 2, 2.70 is direct materials and 5.30 is overhead. What is the prime cost per unit? Conversion cost per unit?
Pattison Products, Inc., began operations in October and manufactured 40,000 units during the month with the following unit costs: Fixed overhead per unit = 280,000/40,000 units produced = 7. Total fixed factory overhead is 280,000 per month. During October, 38,400 units were sold at a price of 24, and fixed marketing and administrative expenses were 130,500. Required: 1. Calculate the cost of each unit using absorption costing. 2. How many units remain in ending inventory? What is the cost of ending inventory using absorption costing? 3. Prepare an absorption-costing income statement for Pattison Products, Inc., for the month of October. 4. What if November production was 40,000 units, costs were stable, and sales were 41,000 units? What is the cost of ending inventory? What is operating income for November?
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