A business operated at 100% of capacity during its first month, with the following results: Sales (108 units) Production costs (135 units): $626,400 Direct materials $84,642 Direct labor 21,611 Variable factory overhead 37,819 Fixed factory overhead 36,018 180,090 Operating expenses: Variable operating expenses $5,253 Fixed operating expenses 4,584 9,837 The amount of gross profit that would be reported on the absorption costing income statement is: a. $472,491. b. $482,328. c. $477,075. d. $626,265.

A business operated at 100% of capacity during its first month, with the following results: Sales (108 units) Production costs (135 units): $626,400 Direct materials $84,642 Direct labor 21,611 Variable factory overhead 37,819 Fixed factory overhead 36,018 180,090 Operating expenses: Variable operating expenses $5,253 Fixed operating expenses 4,584 9,837 The amount of gross profit that would be reported on the absorption costing income statement is: a. $472,491. b. $482,328. c. $477,075. d. $626,265.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 22E: Ellerson Company provided the following information for the last calendar year: During the year,...

See similar textbooks

Similar questions

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?
Last year, Orsen Company produced 25,000 juicers and sold 26,500 juicers for 60 each. The actual variable unit cost is as follows: Fixed overhead was 320,000. Fixed selling expenses consisted of advertising copayments totaling 110,000. Fixed administrative expenses were 236,000. There were no beginning and ending work-in-process inventories. Beginning finished goods inventory was 148,000 for 4,000 juicers. The value of ending inventory reported on the financial statements was a. 55,500 b. 92,500 c. 66,500 d. 39,900
Last year, Orsen Company produced 25,000 juicers and sold 26,500 juicers for 60 each. The actual variable unit cost is as follows: Fixed overhead was 320,000. Fixed selling expenses consisted of advertising copayments totaling 110,000. Fixed administrative expenses were 236,000. There were no beginning and ending work-in-process inventories. Beginning finished goods inventory was 148,000 for 4,000 juicers. The value of ending inventory reported on the financial statements was Refer to the information in 2.24. The gross margin percentage for last year was a. 12.57% b. 55.67% c. 28.95% d. 38.33%
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?
Total and Unit Product Cost Martinez Manufacturing Inc. showed the following costs for last month: Last month, 4,000 units were produced and sold. Required: 1. Classify each of the costs as product cost or period cost. 2. What is the total product cost for last month? 3. What is the unit product cost for last month?
The following events took place for Rushmore Biking Inc. during February, the first month of operations as a producer of road bikes: Purchased 480,000 of materials. Used 434,500 of direct materials in production. Incurred 125,000 of direct labor wages. Applied factory overhead at a rate of 40% of direct labor cost. Transferred 578,000 of work in process to finished goods. Sold goods with a cost of 550,000. Revenues earned by selling bikes, 910,000. Incurred 185,000 of selling expenses. Incurred 90,000 of administrative expenses. a. Prepare the income statement for Rushmore Biking for the month ending February 28. b. Determine the inventory balances on February 28, the end of the first month of operations.
A company has the following transactions during the week. Purchase of $3,000 raw materials inventory Assignment of $700 of raw materials inventory to Job 7 Payroll for 10 hours and $3,000 is assigned to Job 7 Factory depreciation of $1,750 Overhead applied at the rate of $200 per hour What is the cost assigned to Job 7 at the end of the week?
Orinder Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 275,800, direct labor cost was 153,000, and overhead cost was 267,300. There were 25,000 units produced. Unit manufacturing cost (rounded to the nearest cent) is a. 28.40 b. 27.98 c. 34.95 d. 27.55
At the end of the first year of operations, 21,500 units remained in the finished goods inventory. The unit manufacturing costs during the year were as follows: Determine the cost of the finished goods inventory reported on the balance sheet under (a) the absorption costing concept and (b) the variable costing concept.
A business operated at 100% of capacity during its first month, with the following results: Sales (99 units) $485,100 Production costs (124 units): Direct materials $65,682 Direct labor 16,770 Variable factory overhead 29,347 Fixed factory overhead 27,949 139,748 Operating expenses: Variable operating expenses $6,083 Fixed operating expenses 4,871 10,954 The amount of gross profit that would be reported on the absorption costing income statement is a.$373,527 b.$484,976 c.$367,444 d.$362,573
A business operated at 100% of capacity during its first month, with the following results: Sales (96 units) $499,200 Production costs (120 units): Direct materials $67,454 Direct labor 17,222 Variable factory overhead 30,139 Fixed factory overhead 28,705 143,520 Operating expenses: Variable operating expenses $5,260 Fixed operating expenses 4,634 9,894 What is the amount of the income from operations that would be reported on the absorption costing income statement? Oa. $397,454 Ob. Ob. $499,080 Oc. $374,489 Od. $402,088
A business operated at 100% of capacity during its first month, with the following results: Sales (109 units) $457,800 Production costs (136 units): Direct materials $61,747 Direct labor 15,765 Variable factory overhead 27,589 Fixed factory overhead 26,275 131,376 Operating expenses: Variable operating expenses $6,116 Fixed operating expenses 3,031 9,147 What is the amount of the income from operations that would be reported on the absorption costing income statement? a.$457,664 b.$343,359 c.$367,449 d.$364,418