Appliance Apps has the following costs associated with its production and sale of devices that allow appliances to receiv commands from cell phones. Beginning Inventory Units Produced 24,000 Units Sold 19,200 Selling Price per Unit $146 Variable Sales and Administration Expenses $5 Fixed Sales and Administration Expenses $931,200 Direct Material Cost per Unit $25 Direct Labor Cost per Unit $11 Variable Manufacturing Overhead Cost per Unit $4 Fixed Manufacturing Overhead Cost per Month $940,800 Prepare an income statement under the absorption method. If an amount box does not require an entry, leave it blank Appliance Apps Income Statement: Absorption Cest ef Cesde Seld.

Appliance Apps has the following costs associated with its production and sale of devices that allow appliances to receiv commands from cell phones. Beginning Inventory Units Produced 24,000 Units Sold 19,200 Selling Price per Unit $146 Variable Sales and Administration Expenses $5 Fixed Sales and Administration Expenses $931,200 Direct Material Cost per Unit $25 Direct Labor Cost per Unit $11 Variable Manufacturing Overhead Cost per Unit $4 Fixed Manufacturing Overhead Cost per Month $940,800 Prepare an income statement under the absorption method. If an amount box does not require an entry, leave it blank Appliance Apps Income Statement: Absorption Cest ef Cesde Seld.

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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Appliance Apps has the following costs associated with its production and sale of devices that allow appliances to receive commands from cell phones. Beginning Inventory 0Units Produced 24,000Units Sold 19,200Selling Price per Unit $146Variable Sales and Administration Expenses $4Fixed Sales and Administration Expenses $936,000Direct Material Cost per Unit $26Direct Labor Cost per Unit $10Variable Manufacturing Overhead Cost per Unit $2Fixed Manufacturing Overhead Cost per Month $938,400 -Prepare an income statement under the absorption method. If an amount box does not require an entry, leave it blank. -Prepare an income statement under the variable costing method. If an amount box does not require an entry, leave it blank. -Prepare a reconciliation between the two statements.
Neely Systems Corporation manufactures and sells various high-tech office automation products. Two divisions of Neely Systems Corporation are the Computer Chip Division and the Computer Division. The Computer Chip Division manufactures one product, a "super chip," that can be used by both the Computer Division and other external customers. The following information is available on this month's operations in the Computer Chip Division: Selling price per chip $50 Variable costs per chip $20 Fixed production costs $60,000 Fixed SG&A costs $90,000 Monthly capacity 10,000 chips External sales 6,000 chips Internal sales 0 chips Presently, the Computer Division purchases no chips from the Computer Chips Division, but instead pays $45 to an external supplier for the 4,000 chips it needs each month. Refer to Neely Systems Corporation. Two possible transfer prices (for 4,000 units) are under consideration by the two divisions: $35 and $40. Corporate profits would…
Controller Incorporated produces two basic types of video games, Clash and Slash. Pertinent data follow (DLH = direct labor hour): Clash Sales price (per unit) $ 430 Slash $ 358 Costs (per unit): Direct materials 86 50 Direct labor 74 98 Variable factory overhead (@ $15 per DLH) 60 30 19 Allocated fixed factory overhead (based on DLHS) Marketing expenses (all variable) 24 12 54 43 Total costs 298 233 Operating income (per unit) $ 132 $ 125 There is insufficient labor capacity (i.e., DLHs) in the plant to meet the combined demand for both Clash and Slash. Both products are produced through the same production departments. In view of the labor shortage, which of the two products is most profitable, and how much is the contribution margin, per DLH? Multiple Choice Slash, $137.00.
Harbour Company makes two models of electronic tablets, the Home and the Work. Basic production information follows: Home Work Direct materials cost per unit $ 37 $ 65 Direct labor cost per unit 17 38 Sales price per unit 361 577 Expected production per month 680 units 300 units Harbour has monthly overhead of $193,020, which is divided into the following cost pools: Setup costs $ 86,670 Quality control 64,350 Maintenance 42,000 Total $ 193,020 The company has also compiled the following information about the chosen cost drivers: Home Work Total Number of setups 38 69 107 Number of inspections 330 385 715 Number of machine hours 1,700 1,100 2,800 Required: 1. Suppose Harbour uses a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line.(Do not round intermediate calculations and…
Make or Buy Decision: Zee-Drive Ltd. is a computer manufacturer. One of the items they make is monitors. Zee-Drive has the opportunity to purchase 19,000 monitors from an outside supplier for $211 per unit. One of the company's cost-accounting interns prepared the following schedule of Zee-Drive's cost to produce 19,000 monitors: Total cost of producing 19,000 monitors Unit cost Direct materials $ 2,204,000 $ 116 Direct labor 1,330,000 70 Variable factory overhead 665,000 35 Fixed manufacturing overhead 570,000 30 Fixed non-manufacturing overhead 722,000 38 $ 5,491,000 $ 289 You are asked to look over the intern's estimate before the information is shared with members of management who will decide to continue to make the monitors or buy them. The company's controller believes that the estimate may be incorrect because it includes costs that are not relevant. If Zee-Drive buys the monitors, the direct labor force currently employed in producing the…
Audiophonics Limited manufactures and sells high-quality and durable ear buds for use with personal electronics that are custom moulded to each customer’s ear. Cost data for the product follow: Variable costs per unit: Direct materials $ 7 Direct labour 14 Variable factory overhead 9 Variable selling and administrative 7 Total variable costs per unit $ 37 Fixed costs per month: Fixed manufacturing overhead $ 242,400 Fixed selling and administrative 181,800 Total fixed cost per month $ 424,200 The product sells for $61 per unit. Production and sales data for May and June, the first two months of operations, are as follows: Units Produced Units Sold May 20,200 15,600 June 20,200 24,800 Income statements prepared by the Accounting Department using absorption costing are presented below: May June Sales $ 951,600 $ 1,512,800 Cost of goods sold: Beginning inventory 0…
Make-or-Buy Decision Companion Technologies Company has been purchasing carrying cases for its portable tablets at a delivered cost of $57 per unit. The company, which is currently operating below full capacity, charges factory overhead to production at the rate of 42% of direct labor cost. The fully absorbed unit costs to produce comparable carrying cases are expected to be as follows: Direct materials Direct labor $24.00 21.00 Factory overhead (42% of direct labor). Total cost per unit 8.82 $53.82 < If Companion Technologies Company manufactures the carrying cases, fixed factory overhead costs will not increase and variable factory overhead costs associated with the cases are expected to be 12% of the direct labor costs. a. Prepare a differential analysis report for the make-or-buy decision. Enter your final answer as a positive amount if it represents a net cost savings; enter a negative amount if it represents an increase in cost. COMPANION TECHNOLOGIES COMPANY Manufacture Carrying…
Zap Video Inc. produces two basic types of video games, Clash and Slash. Pertinent data follow (DLH = direct labor hour): Clash Slash Sales price (per unit) $ 420 $ 348 Costs (per unit): Direct materials 85 49 Direct labor 72 96 Variable factory overhead (@ $15 per DLH) 60 30 Allocated fixed factory overhead (based on DLHs) 24 12 Marketing expenses (all variable) 53 42 Total costs 294 229 Operating income (per unit) $ 126 $ 119 There is insufficient labor capacity (i.e., DLHs) in the plant to meet the combined demand for both Clash and Slash. Both products are produced through the same production departments. In view of the labor shortage, which of the two products is most profitable, and how much is the contribution margin, per DLH?
The Widget Company produces two types of widgets, Standard and Deluxe. Data related to the two products is presented below. Standard Deluxe Annual production in units 25,000 50,000 Direct material costs $75,000 $150,000 Direct manufacturing labor costs $25,000 $50,000 Direct manufacturing labor-hours 1,250 2,500 Machine hours 12,500 25,000 Number of production runs 25 25 Inspection hours 500 250 Both products pass through Departments A and Department B. The departments’ combined manufacturing overhead costs are: Total Machine Costs $187,500 Setup Costs 60,000 Inspection Costs 52,500 Required: Using Activity Based Costing, Compute the…
Activity Cost Pool Supporting direct labor Machine processing Machine setups Production orders Shipments Product sustaining Activity data have been supplied for the following two products: Number of units produced per year Direct labor-hours Machine-hours Machine setups Production orders Shipments Product sustaining Activity Cost Pool Supporting direct labor Machine processing Machine setups Production orders Shipments Product sustaining Total overhead cost Activity Rates $9 per direct labor-hour $3 per machine-hour $45 per setup $150 per order $ 130 per shipment $ 875 per product K425 0 $ Total Expected Activity K425 M67 2,000 M67 200 1,000 2,800 Required: How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system? 0 7 7 14 2 50 40 2 NNNN 2
A company has the following overhead costs and activities: Estimated Expected Activity Product V Product W Product X Overhead Activities and Activity Measures Machine setups (setups) Processing customer orders (orders) Assembling products (assembly-hours) $9,178.00 Cost S7,234.50 $3,565.50 69 12 10 20 21 492 697 111 4. A company sells two products, one with sales of $10,000 and variable expenses of $2,500, another with sales of $46,000 and variable expenses of $15,420. Fixed expenses are $33,100. Breakeven point for the whole company is close to: А. 833,100 В. $22,900 C. $51,020 D. $48,676 A company that reduces the proportion of variable costs in its cost structure will: A. enjoys higher stability in profits. B. increase its profits more when the economy is good. C. have a loss more easily when the economy is bad. D. be indifferent. 5. 6. is normally recorded on any financial statement but irrelevant in decision making which is not. A. Sunk cost B. Incremental cost C. Differential…