What is the cost of goods sold for the year? Ankee Corporation manufactures a single product. The company has the following cost structure:Variable costs per unit:• Production: $5Selling and administrative: $2Fixed costs in total:•Production: $15,000Selling and administrative: $10,000Last year, 5,000 units were produced and 4,500 units were sold. There were no beginning inventories.Under absorption costing, what is the cost of goods sold (COGS) for the year?A. $36,000B. $31,500C. $22,500D. $29,250

Step 1: Definition of Absorption CostingAbsorption costing is a method where all manufacturing costs…

Answered: Ankee Corporation manufactures a single…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 1PA: The following product Costs are available for Haworth Company on the production of chairs: direct...

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Cicleta Manufacturing has four activities: receiving materials, assembly, expediting products, and storing goods. Receiving and assembly are necessary activities; expediting and storing goods are unnecessary. The following data pertain to the four activities for the year ending 20x1 (actual price per unit of the activity driver is assumed to be equal to the standard price): Required: 1. Prepare a cost report for the year ending 20x1 that shows value-added costs, non-value-added costs, and total costs for each activity. 2. Explain why expediting products and storing goods are non-value-added activities. 3. What if receiving cost is a step-fixed cost with each step being 1,500 orders whereas assembly cost is a variable cost? What is the implication for reducing the cost of waste for each activity?
The following product costs are available for Stellis Company on the production of erasers: direct materials, $22,000; direct labor, $35,000; manufacturing overhead, $17,500; selling expenses, $17,600; and administrative expenses; $13,400. What are the prime costs? What are the conversion costs? What is the total product cost? What is the total period cost? If 13,750 equivalent units are produced, what is the equivalent material cost per unit? If 17,500 equivalent units are produced, what is the equivalent conversion cost per unit?
The following information pertains to Vladamir, Inc., for last year: There are no work-in-process inventories. Normal activity is 100,000 units. Expected and actual overhead costs are the same. Costs have not changed from one year to the next. Required: 1. How many units are in ending inventory? 2. Without preparing an income statement, indicate what the difference will be between variable-costing income and absorption-costing income. 3. Assume the selling price per unit is 29. Prepare an income statement using (a) variable costing and (b) absorption costing.
The following product costs are available for Kellee Company on the production of eyeglass frames: direct materials, $32,125; direct labor, $23.50; manufacturing overhead, applied at 225% of direct labor cost; selling expenses, $22,225; and administrative expenses, $31,125. The direct labor hours worked for the month are 3,200 hours. A. What are the prime costs? B. What are the conversion costs? C. What is the total product cost? D. What is the total period cost? E. If 6.425 equivalent units are produced, what is the equivalent material cost per unit? F. What is the equivalent conversion cost per unit?
Cost Classification Loring Company incurred the following costs last year: Required: 1. Classify each of the costs using the following table format. Be sure to total the amounts in each column. Example: Direct materials, 216,000. 2. What was the total product cost for last year? 3. What was the total period cost for last year? 4. If 30,000 units were produced last year, what was the unit product cost?
Grainger Company produces only one product and sells that product for $100 per unit. Cost information for the product is: Selling expenses are $4 per unit and are all variable. Administrative expenses of $20,000 are all fixed. Grainger produced 5,000 units; sold 4,000; and had no beginning inventory. A. Compute net income under absorption costing variable costing B. Reconcile the difference between the income under absorption and variable costing.
Submarine Company produces only one product and sells that product for $150 per unit. Cost information for the product is as follows: Selling expenses are $2 per unit and are all variable. Administrative expenses of $15,000 are all fixed, Submarine produced 2.000 units and sold 1.800. Grainger had no beginning inventory. A. Compute net income under absorption costing variable costing B. Reconcile the difference between the income under absorption and variable costing.
Rose Company has a relevant range of production between 10,000 and 25.000 units. The following cost data represents average cost per unit for 15,000 units of production. Using the cost data from Rose Company, answer the following questions: If 10,000 units are produced, what is the variable cost per unit? If 18,000 units are produced, what is the variable cost per unit? If 21,000 units are produced, what are the total variable costs? If 11,000 units are produced, what are the total variable costs? If 19,000 units are produced, what are the total manufacturing overhead costs incurred? If 23,000 units are produced, what are the total manufacturing overhead costs incurred? If 19,000 units are produced, what are the per unit manufacturing overhead costs incurred? If 25,000 units are produced, what are the per unit manufacturing overhead costs incurred?
The following data were adapted from a recent income statement of Caterpillar Inc. (CAT) for the year ended December 31: Assume that 8,500 million of cost of goods sold and 4,000 million of selling, administrative, and other expenses were fixed costs. Inventories at the beginning and end of the year were as follows: Also, assume that 30% of the beginning and ending inventories were fixed costs. a. Prepare an income statement according to the variable costing concept for Caterpillar Inc. Round numbers to nearest million. b. Explain the difference between the amount of operating income reported under the absorption costing and variable costing concepts. Round numbers to nearest million.
Baxter Company has a relevant range of production between 15,000 and 30,000 units. The following cost data represents average variable costs per unit for 25,000 units of production. Using the costs data from Rose Company, answer the following questions: A. If 15,000 units are produced, what is the variable cost per unit? B. If 28,000 units are produced, what is the variable cost per unit? C. If 21,000 units are produced, what are the total variable costs? D. If 29,000 units are produced, what are the total variable costs? E. If 17,000 units are produced, what are the total manufacturing overhead costs incurred? F. If 23,000 units are produced, what are the total manufacturing overhead costs incurred? G. If 30,000 units are produced, what are the per unit manufacturing overhead costs incurred? H. If 15,000 units are produced, what are the per unit manufacturing overhead costs incurred?
Rocks Industries has two products. They manufactured 12,539 units of product A and 8.254 units of product B. The data are: Â What is the activity rate for each cost pool?
Jellison Company had the following operating data for its first two years of operations: Jellison produced 90,000 units in the first year and sold 80,000. In the second year, it produced 80,000 units and sold 90,000 units. The selling price per unit each year was 12. Jellison uses an actual costing system for product costing. Required: 1. Prepare income statements for both years using absorption costing. Has firm performance, as measured by income, improved or declined from Year 1 to Year 2? 2. Prepare income statements for both years using variable costing. Has firm performance, as measured by income, improved or declined from Year 1 to Year 2? 3. Which method do you think most accurately measures firm performance? Why?

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