A business operated at 100% of capacity during its first month, with the following results:Sales (90 units)$90,000Production costs (100 units):Direct materialsDirect laborVariable factory overheadFixed factory overhead$40,00020,0002,0007,000Ca. $27,900Ob. $21,000Oc. $18,900Od. $18,000.Operating expenses:Variable operating expensesFixed operating expenses9,000The amount of gross profit that would be reported on the absorption costing income statement is69,000$8,0001,000

Name: A business operated at 100% of capacity during its first month, with
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Description: A business operated at 100% of capacity during its first month, with the following results:Sales (90 units)$90,000Production costs (100 units):Direct materialsDirect laborVariable factory overheadFixed factory overhead$40,00020,0002,0007,000Ca. $27,

The cost of goods sold includes the cost of goods that are sold during the period. The gross profit…

Business

Accounting

A business operated at 100% of capacity during its first month, with the following Sales (90 units) $90,000 Production costs (100 units): Direct materials Direct labor Variable factory overhead Fixed factory overhead Operating expenses: Variable operating expenses $40,000 20,000 2,000 7,000 Ca. $27,900 Ob. $21,000 Oc. $18,900 $18.000 $8,000 1,000 69,000 Fixed operating expenses 9,000 The amount of gross profit that would be reported on the absorption costing income statement is

A business operated at 100% of capacity during its first month, with the following Sales (90 units) $90,000 Production costs (100 units): Direct materials Direct labor Variable factory overhead Fixed factory overhead Operating expenses: Variable operating expenses $40,000 20,000 2,000 7,000 Ca. $27,900 Ob. $21,000 Oc. $18,900 $18.000 $8,000 1,000 69,000 Fixed operating expenses 9,000 The amount of gross profit that would be reported on the absorption costing income statement is

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 2PB: The following product costs are available for Kellee Company on the production of eyeglass frames:...

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Algers Company produces dry fertilizer. At the beginning of the year, Algers had the following standard cost sheet: Algers computes its overhead rates using practical volume, which is 54,000 units. The actual results for the year are as follows: a. Units produced: 53,000 b. Direct materials purchased: 274,000 pounds at 2.50 per pound c. Direct materials used: 270,300 pounds d. Direct labor: 40,100 hours at 17.95 per hour e. Fixed overhead: 161,700 f. Variable overhead: 122,000 Required: 1. Compute price and usage variances for direct materials. 2. Compute the direct labor rate and labor efficiency variances. 3. Compute the fixed overhead spending and volume variances. Interpret the volume variance. 4. Compute the variable overhead spending and efficiency variances. 5. Prepare journal entries for the following: a. The purchase of direct materials b. The issuance of direct materials to production (Work in Process) c. The addition of direct labor to Work in Process d. The addition of overhead to Work in Process e. The incurrence of actual overhead costs f. Closing out of variances to Cost of Goods Sold
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. Refer to Exercise 2.21. Last calendar year, Ellerson recognized revenue of 1,312,000 and had selling and administrative expenses of 204,600. Required: 1. What is the cost of goods sold for last year? 2. Prepare an income statement for Ellerson for last year.
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
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