À week before the end of Its fiscal year, a company forecasts that it will not meet its target net operating income of $1,000,000 for the year (based on absorption costing). Forecast data is as follows: Sales Revenue Variable COGS Fixed manufacturing overhead Variable S&A: Commission on Sales Fixed S&A $10,000,000 $4,000,000 $5,000,000 3% $100,000 $200/unit $80/unit In the past, the company has had a policy of having zero inventories at the end of each period. For the current year, no further sales are possible and all of the units produced so far have been sold. The CEO has decided to produce additional units for Inventory in the last week of the year in order to meet the income target. How many additional units (nearest whole number) need to be produced for inventory in the last week of the year in order to meet the net operating income target if the sales commission is left unchanged at 3%? O 50,000 O 3,191 O 54,348
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
![A week before the end of Its fiscal year, a company forecasts that It will not meet its target net operating income of $1,000,000 for the
year (based on absorption costing). Forecast data is as follows:
Sales Revenue
Variable COGS
Fixed manufacturing overhead
Variable S&A: Commission on Sales
Fixed S&A
$200/unit
$80/unit
$10,000,000
$4,000,000
$5,000,000
3%
$100,000
1:44
In the past, the company has had a policy of having zero inventories at the end of each period. For the current year, no further sales
are possible and all of the units produced so far have been sold. The CEO has decided to produce additional units for Inventory in the
last week of the year in order to meet the Income target.
How many additional units (nearest whole number) need to be produced for inventory in the last week of the year in order to meet the
net operating Income target if the sales commission is left unchanged at 3%?
O 50,000
O 3,191
O 54,348
O 4,348](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Facec29ea-d950-46f5-9e27-0404e7e53248%2F123d7d37-ec43-417f-ab63-5e746cb19a3b%2Fyv2zcj_processed.jpeg&w=3840&q=75)
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