Accounting 2120 Ch. 20 Cost Volume Profit Analysis Activity 1 6. Fern Company gathered the following information on power costs and factory machine usage for the last five months: Month January February March Power Cost $48,000 41,000 47,000 44,000 40,000 Factory Machine Hours 19,000 15,500 18,500 17,000 15,000 April May Instructions Use the high-low method of analyzing costs to answer the following questions. A. How much is the estimated variable portion of power costs per factory machine hour? B. How much is the estimated fixed power cost each month? C. If it is estimated that 18,000 factory machine hours will be run in June, what is the expected total power costs for June?

Accounting 2120 Ch. 20 Cost Volume Profit Analysis Activity 1 6. Fern Company gathered the following information on power costs and factory machine usage for the last five months: Month January February March Power Cost $48,000 41,000 47,000 44,000 40,000 Factory Machine Hours 19,000 15,500 18,500 17,000 15,000 April May Instructions Use the high-low method of analyzing costs to answer the following questions. A. How much is the estimated variable portion of power costs per factory machine hour? B. How much is the estimated fixed power cost each month? C. If it is estimated that 18,000 factory machine hours will be run in June, what is the expected total power costs for June?

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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Estimated Income Statements, using Absorption and Variable Costing Prior to the first month of operations ending October 31, Marshall Inc. estimated the following operating results: Sales (23,200 x $81) $1,879,200 Manufacturing costs (23,200 units): Direct materials 1,127,520 Direct labor 266,800 Variable factory overhead 125,280 Fixed factory overhead 148,480 Fixed selling and administrative expenses 40,400 Variable selling and administrative expenses 48,800 The company is evaluating a proposal to manufacture 25,600 units instead of 23,200 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. a. 1. Prepare an estimated income statement, comparing operating results if 23,200 and 25,600 units are manufactured in the absorption costing format. If an amount box does not…
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Net operating income for April under absorption costingA. 4,900 C. (11,100)B. 6,600 D. 11,500
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A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations: Selling price Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative expense Fixed costs: Fixed manufacturing overhead Fixed selling and administrative expense What is the total period cost for the month under absorption costing? $ 133 0 7,000 6,800 200 $ 41 $ 57 $ 5 $4 $133,000 $ 34,000