General Account Question Alpha Company has provided projected information as follows:Net sales$ 10,000Fixed manufacturing costs$ 1,000Additionally, Alpha has experienced variable manufacturing costs of45% of net sales and sees no changes during the budget period. Alphaexpects that there will be no changes to any inventory values.Use this information to determine Alpha's:1. Budgeted Cost of Goods Sold.2. Budgeted Gross Profit.

Explanation for 1: The cost of goods sold is calculated as = Cost of goods manufactured + Beginning…

Answered: Alpha Company has provided projected…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter10: Inventory

Section: Chapter Questions

Problem 1PA: When prices are rising (inflation), which costing method would produce the highest value for gross...

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Pietro expects to produce 50,000 units and sell 49,300 units. Beginning inventory of finished goods is 42,500, and ending inventory of finished goods is expected to be 34,000. Required: 1. Prepare a statement of cost of goods sold in good form. 2. What if the beginning inventory of finished goods decreased by 5,000? What would be the effect on the cost of goods sold?
When prices are falling (deflation), which costing method would produce the highest gross margin for the following? Choose first-in, first-out (FIFO); last-in, first-out (LIFO); or weighted average, assuming that B62 Company had the following transactions for the month. Calculate the gross margin for each of the following cost allocation methods, assuming B62 sold just one unit of these goods for $400. Provide your calculations. A. first-in, first-out (FIFO) B. last-in, first-out (LIFO) C. weighted average (AVG)
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KALIBO CORP. prepared the following absorption-costing income statement for the year ended May 31, 2019 Sales (16,000 units) Cost of goods sold Gross margin Selling and administrative expenses Operating income Additional information follows: Selling and administrative expenses include P1.50 of variable cost per unit sold. There was no beginning inventory, and 17,500 units were produced. Variable manufacturing costs were P11 per unit. Actual fixed costs were equal to budgeted fixed costs. REQUIREMENT: Prepare a variable-costing income statement for the same period. P 320,000 216.000 P104,000 46.000 P 58,000 Absorption Costing Income Statement (Conversion from Variable Net Income) 4. LEGAZPI COMPANY manufactures and sells premium tomato juice by the gallon. LEGAZPI just finished its first year of operations. The following data relates to this first year:
Clarke Inc. operates the Patio Furniture Division as a profit center. Operating data for this division for the year ended December 31, 2020, are as shown below. Budget Differencefrom Budget Sales $2,490,200 $48,000 Favorable Cost of goods sold Variable 1,295,300 37,500 Favorable Controllable fixed 197,900 2,500 Unfavorable Selling and administrative Variable 211,700 6,800 Unfavorable Controllable fixed 50,200 1,800 Unfavorable Noncontrollable fixed costs 68,900 4,700 Unfavorable In addition, Clarke incurs $183,100 of indirect fixed costs that were budgeted at $175,500. Twenty percent (20%) of these costs are allocated to the Patio Furniture Division.Prepare a responsibility report for the Patio Furniture Division for the year.
Presented here is the income statement for Big Sky Incorporated for the month of February: Sales $ 60,000 Cost of goods sold 51,900 Gross profit $ 8, 100 Operating expenses 15,200 Operating loss $ (7,100) Based on an analysis of cost behavior patterns, it has been determined that the company's contribution margin ratio is 19%. Required: Rearrange the preceding income statement to the contribution margin format. If sales increase by 10%, what will be the firm's operating income (or loss)? Calculate the amount of revenue required for Big Sky to break even.
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Two businesses, P Ltd. and Q Ltd. sell the same type of product in the same type of market. Their budgeted profit and loss accounts for the coming year are as under: P Ltd. (Rs.) Q. Ltd. (Rs.) Sales 150000 150000 Variable Cost 120000 100000 Fixed cost 15000 35000 Budgeted Net profit 15000 15000 You are required to: Calculate the break-even point for each business Calculate the sales volume at which each business will earn Rs.5,000 Profit. State which business is likely to earn greater profit in conditions of: Heavy demand for the product Low demand for the product,and,briefly give your argument as well.
Ivanhoe Inc. had sales of $2,300,000 for the first quarter of 2020. In making the sales, the company incurred the following costs and expenses. Variable Fixed Cost of goods sold $940,000 $464,000 Selling expenses 74,000 54,000 Administrative expenses 96,000 145,000 Prepare a CVP income statement for the quarter ended March 31, 2020. IVANHOE INC.CVP Income StatementFor the Quarter Ended March 31, 2020 Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsGross ProfitNet Income/(Loss)SalesSelling ExpensesVariable Costs $ Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsGross ProfitNet Income/(Loss)SalesSelling ExpensesVariable Costs Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsGross…
A company wishes to establish an EOQ for an item for which the annual demandis $800,000, the ordering cost is $32, and the cost of carrying inventory is 20%.Calculate the following:a. The EOQ in dollars.b. Number of orders per year.c. Cost of ordering, cost of carrying inventory, and total cost.d. How do the costs of carrying inventory compare with the costs of ordering?
Ayayai Inc. operates the Patio Furniture Division as a profit center. Operating data for this division for the year ended December 31, 2022, are shown here. Budget Differencefrom Budget Sales $2,490,000 $45,000 Favorable Cost of goods sold Variable 1,290,000 36,000 Favorable Controllable fixed 190,000 2,000 Unfavorable Selling and administrative Variable 210,000 6,000 Unfavorable Controllable fixed 45,000 1,000 Unfavorable Noncontrollable fixed costs 65,000 3,000 Unfavorable In addition, Ayayai incurs $175,000 of indirect fixed costs that were budgeted at $170,000. Twenty percent (20%) of these costs are allocated to the Patio Furniture Division.Prepare a responsibility report for the Patio Furniture Division for the year. (List variable costs before fixed costs.)

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