A manufacturing company that produces a single product has provided the following data relatedto its operations during May:Manufacturing costs:Variable costs per unit:Direct materials$22.50Direct labor$20.00Variable manufacturing overheadFixed manufacturing overhead costs (total)$7.50$875,000Selling and administrative costs:Variable per unitFixed (total)$5.00$900,000The product sells for $125 per unit. The company produced 35,000 units and sold 30,000 unitsin May. There is no beginning inventory.Required:a) Compute the breakeven sales dollars and margin of safety in sales dollars.

Break even Sales = Fixed Costs/Contribution Margin ratio Margin of Safety (Sales) = Actual Sales -…

Answered: A manufacturing company that produces a…

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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Closet Links Clothing Company provided the following manufacturing costs for the month of June. Direct labor cost $136,000 Direct materials cost 90,000 Equipment depreciation (straight−line) 24,000 Factory insurance 15,000 Factory manager's salary 10,600 Janitor's salary 3,000 Packaging costs 18,200 Property taxes 14,000 From the above information, calculate Closet Link's total variable costs. A. $66,600 B. $226,000 C. $244,200 D.
First Buy Company provided the following manufacturing costs for the month of June. Direct labor cost $136,000Direct materials cost 80,000Equipment depreciation (straight-line) 24,000Factory insurance 19,000Factory manager's salary 12,800Janitor's salary 5,000Packaging costs 18,800 From the above information, calculate First Buy's total variable costs.
Beamish Incorporated, which produces a single product, has provided the following data for its most recent month of operations: Number of units produced Variable costs per unit: 4,600 $ 108 $ 105 $ 5 $ 12 Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative expense Fixed costs: Fixed manufacturing overhead Fixed selling and administrative expense $ 184,000 $ 322,000 There were no beginning or ending inventories. The absorption costing unit product cost was:
The Macon Company uses the high-low method to determine its cost equation. The following information was gathered for the past year: Machine Hours Direct Labor Costs Busiest month (June) 14,000 $ 265,000 Slowest month (December) 6,000 $ 129,000 What are the direct labor costs per machine hour?
Prior to the first month of operations ending October 31, Marshall Inc. estimated the following operating results: Sales (19,200 x $68) $1,305,600 Manufacturing costs (19,200 units): Direct materials 787,200 Direct labor 186,240 Variable factory overhead 86,400 Fixed factory overhead 103,680 Fixed selling and administrative expenses 28,200 Variable selling and administrative expenses 34,100 The company is evaluating a proposal to manufacture 21,600 units instead of 19,200 units, thus creating an ending inventory of 2,400 units. Manufacturing the additional units will not change sales, unit variable factory overhead costs, total fixed factory overhead cost, or total selling and administrative expenses. Question Content Area a. 1. Prepare an estimated income statement, comparing operating results if 19,200 and 21,600 units are manufactured in the absorption costing format. If an amount box does not require an entry leave it blank. Marshall…
Prior to the first month of operations ending October 31, Marshall Inc. estimated the following operating results: 1 Sales (28,800 × $75) $2,160,000.00 2 Manufacturing costs (28,800 units): 3 Direct materials 1,209,600.00 4 Direct labor 316,800.00 5 Variable factory overhead 115,200.00 6 Fixed factory overhead 221,760.00 7 Fixed selling and administrative expenses 28,400.00 8 Variable selling and administrative expenses 34,900.00 The company is evaluating a proposal to manufacture 36,000 units instead of 28,800 units, thus creating an ending inventory of 7,200 units. Manufacturing the additional units will not change sales, unit variable factory overhead costs, total fixed factory overhead cost, or total selling and administrative expenses. Required: a. Prepare an estimated income statement, comparing operating results if 28,800 and 36,000 units are manufactured in (1) the absorption costing…
Denton Company manufactures and sells a single product. Cost data for the product are given: Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit Fixed costs per month: Fixed manufacturing overhead Fixed selling and administrative Total fixed cost per month July August The product sells for $48 per unit. Production and sales data for July and August, the first two months of operations, follow: Units Produced 27,000 27,000 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income $ 108,000 172,000 $ 280,000 Required: 1. Determine the unit product cost under: a. Absorption costing. b. Variable costing. $ 5 11 3 2 $ 21 Units Sold 23,000 31,000 The company's Accounting Department has prepared the following absorption costing income statements for July and August: July August $ 1,104,000 $ 1,488,000 529,000 575,000 218,000 $ 357,000 713,000 775,000 234,000…
vy, Inc., produces a single product that sells for $60 per unit. There were no inventories of work in process or finished goods. Costs for the year were as follows: Variable costs: Direct materials Direct labor Manufacturing overhead Selling expenses Fixed costs Manufacturing overhead Selling and administrative During the first three months of the year, production and sales in units were as follows: Production Sales January February March 4,000 4,000 4,000 b. $8 per unit $12 per unit $5 per unit $3 per unit $36,000 per month $15,000 per month 4,000 3,500 4,500 The company uses an actual cost system. There were no work-in-process inventories at the end of any month. Required: a. Determine the unit cost of production under variable costing and absorption costing for the Feb & March months. Determine income under variable and absorption costing for Feb & March months
Beamish Incorporated, which produces a single product, has provided the following data for its most recent month of operations: Number of units produced 7,600 Variable costs per unit: Direct materials $ 109 Direct labor $ 88 Variable manufacturing overhead $ 5 Variable selling and administrative expense $ 10 Fixed costs: Fixed manufacturing overhead $266,000 Fixed selling and administrative expense $570,000 There were no beginning or ending inventories. The absorption costing unit product cost was:
Denton Company manufactures and sells a single product. Cost data for the product are given: Variable costs per unit: Direct materials $ 5 Direct labor 10 Variable manufacturing overhead 3 Variable selling and administrative 1 Total variable cost per unit $ 19 Fixed costs per month: Fixed manufacturing overhead $ 108,000 Fixed selling and administrative 169,000 Total fixed cost per month $ 277,000 The product sells for $48 per unit. Production and sales data for July and August, the first two months of operations, follow: Units Produced Units Sold July 27,000 23,000 August 27,000 31,000 The company's Accounting Department has prepared the following absorption costing income statements for July and August: July August Sales $ 1,104,000 $1,488,000 Cost of goods sold 506,000 682,000 Gross margin 598,000 806, 000 Selling and administrative expenses 192,000 200,000 Net operating income $ 406,000 $ 606,000 Required: 1. Determine the unit product cost under: a. Absorption costing. b. Variable…
A manufacturing company that produces a single product has provided the following data related to its operations during May: Manufacturing costs: Variable costs per unit: Direct materials $22.50 $20.00 S7.50 Direct labor Variable manufacturing overhead Fixed manufacturing overhead costs (total) $875,000 Selling and administrative costs: Variable per unit Fixed (total) $5.00 $900,000 The product sells for $125 per unit. The company produced 35,000 units and sold 30,000 units in May. There is no beginning inventory. Required: a) Compute the breakeven sales dollars and margin of safety in sales dollars. b) Determine the unit product cost under: i. Absorption costing. ii. Variable costing. c) Prepare an income statement for the month using absorption costing. d) Prepare a contribution format income statement for the month using variable costing. e) Reconcile the variable costing and absorption costing net operating incomes in (c) and (d) above. f) Suppose the company had same production…
Krepps Corporation produces a single product. Last year, Krepps manufactured 27,120 units and sold 21,800 units. Production costs for the year were as follows: Direct materials $ 222,384 Direct labor $ 124,752 Variable manufacturing overhead $ 208,824 Fixed manufacturing overhead $ 461,040 Sales totaled $915,600 for the year, variable selling and administrative expenses totaled $128,620, and fixed selling and administrative expenses totaled $197,976. There was no beginning inventory. Assume that direct labor is a variable cost. Under absorption costing, the ending inventory for the year would be valued at: (Round your intermediate calculations to 2 decimal places.)

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