Baja Corp is a manufacturing company that produces phones to the tech savvy consumer. The company pays bonuses to its managers based on the operating income of the division the manager is responsible for. In 2022, the Z-Phone operating division provided the following information: Unit Production Information Beginning Inventory Units Produced 42,000 Units Sold 34,000 Ending Inventory 8,000 Manufacturing Information (in units) Selling Price 52.00 Variable Manufacturing Costs 8.50 Variable Selling Costs 2.50 Other Information Fixed Overhead 900,000

Baja Corp is a manufacturing company that produces phones to the tech savvy consumer. The company pays bonuses to its managers based on the operating income of the division the manager is responsible for. In 2022, the Z-Phone operating division provided the following information: Unit Production Information Beginning Inventory Units Produced 42,000 Units Sold 34,000 Ending Inventory 8,000 Manufacturing Information (in units) Selling Price 52.00 Variable Manufacturing Costs 8.50 Variable Selling Costs 2.50 Other Information Fixed Overhead 900,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: What type of cost drivers do modern costing systems use and how does it differ from the cost drivers…

A: Cost Driver Business activities are influenced by a cost driver . Cost drivers are the factors…

Q: Following GAAP, the income statement issued to in OA. be prepared in the contribution margin forma…

A: The three most important financial statements are enumerated as below:Income Statement Balance…

Q: Compute the unit product cost for 2019, 2020, and 2021 for variable and absorption costing. Assume…

A: The unit product cost is calculated as total cost divided by number of units produced. Using…

Q: A typical planning decision would be described as: Select one: O A. Monitoring actual sales…

A: Typically planning is Process of making a detailed proposal for doing or achieving something. In…

Q: When making special order decisions, if there is not available capacity to complete the special…

A: When making special order decisions, managers need to consider various factors before accepting or…

Q: Relevant costs. Ace Cleaning Service is considering expanding into one or more new market areas.…

Q: Define incremental cost, opportunity cost, and sunk cost. How do these costs impact decision-making?…

A: Incremental Cost: Incremental cost is the additional cost incurred to produce one additional…

Q: In preparing a relevant cost analysis when operating a full capacity, the analysis should consider…

A: Relevant cost analysis is use to choose one alternative out of available alternatives, this is…

Q: o alternatives for prod

A: The two alternatives for product costing systems are job costing and process costing. Job Costing:…

Q: “Activity-based costing is the wave of the present and the future. All companies should adopt it.”…

Q: Fixed costs depend on the: Select one: a. amount of resources acquired b. amount of resources used…

A: Since you have posted multiple questions, we will do the first one for you. Please post the other…

Q: 15) Which of the following statements is true of ABC systems? A) ABC systems are time-driven cost…

A: Please find the answer to the above question below:

Q: Requirement 3. How can you obtain better estimates of fixed and variable costs? Why would these…

A: Fixed cost are those cost which are fixed cost for current period they don't change with change in…

Q: Consider the following statements about absorption costing and variable costing: Variable costing…

A: Absorption costing and variable costing are managerial accounting and financial reporting cost…

Q: S 18-4 (Algo) Measuring costs using high-low method LO P1 he following information is available for…

A: The total costs of production are classified as fixed and variable costs. The fixed and variable…

Q: The contribution income statement would require a firm to: Restructure its accounting system…

A: The objective of the question is to identify the requirements for a firm to prepare a contribution…

Q: When selling a product, marketing plays a crucial role. Marketing costs are classified as period…

A: Product: Organic skincare productsfollowing techniques and concepts will be used to optimize the…

Q: Which of the following would not be a period cost? Group of answer choices Research and development…

A: Solution: Period cost is the cost that is expensed in the income statement and same is not…

Q: Why do most companies use normal or standard costing? After all, actual costing gives the actual…

A: The standard costing is a costing system that is used to estimate the expenses of the production…

Q: Need Solution with Calculation of this Question pls. Provide

A: Approach to solving the question: Detailed explanation: Variable Costing and the Contribution…

Q: Which costing system is helpful for internal managers when they're trying to make a short- term…

A: Cost Accounting is a process of identification, classification, measurement, and assignment of costs…

Question

a)Calculate the operating income for 2022 using absorption costing

b)Calculate the operating income for 2022 using variable costing

c) If the manager of the Z-Phone division had to choose between absorption and variable costing, which would they choose? Briefly explain.

Baja Corp is a manufacturing company that produces phones to the tech savvy consumer. The company pays bonuses to its managers based on the operating income of the division
the manager is responsible for. In 2022, the Z-Phone operating division provided the following information:
Unit Production Information
Beginning Inventory
Units Produced
42,000
Units Sold
34,000
Ending Inventory
8,000
Manufacturing Information (in units)
Selling Price
Variable Manufacturing Costs
$
52.00
8.50
Variable Selling Costs
2.50
Other Information
Fixed Overhead
$
900,000

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Explanation -

VIEW

Solution -

VIEW

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Which of these costs would be the most difficult to estimate when you know exactly how many units will be produced? Group of answer choices rent insurance utilities materials used in the product
Discuss the limitations of cost volume profit analysis for planning and decision making. Nb: please do answer this question in three paragraphs.
Answer full question
Cost-estimating relationships (CER) have been defined that allow design variables (like speed, horsepower, and size) to predict costs: C2 = C(Q2/Q1)* Question: To successfully use this type of Cost-estimating relationship to estimate the cost of a similar piece of equipment, C2, which of the following must be true? O You need to know the size // capacity and the cost of a similar piece of equipment. O You need the CER correlating exponent value O The Size Range for the CER must include the size of the equipment you have the cost value for and the size of the equipment who's cost you want to estimate. O You must find a source that publishes correlating exponent values for the type of equipment you are interested in. • Previous Next 6. 80
You have been asked by management to classify the costs associated with the start-up of this new product line. Using the cost information provided below, classify each cost under the appropriate heading according to the chart provided below. Note that some costs may be classified under more than one heading. For example, a cost may be a fixed cost and a period cost. Name of cost Variable Cost Fixed Cost Direct Materials Direct Labor Factory Overhead Period Cost Prime Cost Conversion Cost Carlson “New Product” Cost Information Cost Amount Cost Type Depreciation on Building (annual) $ 10,000 Direct Labor Cost (per unit) $ 75 Direct Materials Cost (per unit) $ 60 Factory Utilities (per unit) $ 8 Indirect Materials (per unit) $ 4 Interest on Investments (annual) $3,000 Machinery Rental (monthly) $ 6,000 Marketing (annual) $ 35,000 Rent from Tenant (annual) $40,000…
Which of the following is the format of the income statement that is MOST useful in decision-making? Select one: A. Multiple-step format B. Absorption costing format C. Single-step format D. Contribution margin format
1. Select two decisions-one common to a manufacturer and the other common to a service organization-and give two examples of irrelevant future costs for each decision. Why are they irrelevant.
Please provide this Question solution with explanation and Proper solution
Which of the following is not an application of cost-volume-profit analysis? Setting prices for products and services. Performing strategic “what-if” analyses. Deciding whether to cut a product line. Determining the short-term cost or profit implications of many decisions. Deciding whether to make or buy a given product or service.
PLEASE USE THIS TIME TO ANSWER THIS. AYAW NA PAGHULAT UG DEADLINE, TOMORROW IS ANOTHER DAY. PLEASE DEFINE AND GIVE THE FORMULA OF THE FOLLOWING (IF THERE IS ANY): PLEASE ANSWER HERE DIRECTLY 1. absorption costing 2. activity bases (drivers) 3. break-even polnt 4. contributlon margin 5. contributlon margin ratlo 6. cost behavlor 7. cost-volume-profit analysls 8. cost-volume-profit chart
What are the drivers of manufacturing cost? Of product cost?
In detail discuss what are the advantages and disadvantages of using FIFO for process costing. In periods when costs are increasing how will FIFO affect reported net income? What about in periods of declining costs? Explain.