Blizzard, LLC manufactures snowboards. BLLC began 2020 with an inventory of 250 boards. During the year, it produced 1,200 boards and sold 1,400 for $300 each. Fixed production costs were $169,020, and variable production costs were $112 per unit. Fixed advertising, marketing, and other general and administrative expenses were $75,000, and variable shipping costs were $20 per board. Assume that the cost of each unit in beginning inventory is equal to 2020 inventory cost. Blizzard uses a denominator level of 1,200 units. • Prepare an income statement assuming Blizzard uses variable costing. • Prepare an income statement assuming Blizzard uses absorption costing. • Compute the breakeven in units under variable and absorption costing.

Blizzard, LLC manufactures snowboards. BLLC began 2020 with an inventory of 250 boards. During the year, it produced 1,200 boards and sold 1,400 for $300 each. Fixed production costs were $169,020, and variable production costs were $112 per unit. Fixed advertising, marketing, and other general and administrative expenses were $75,000, and variable shipping costs were $20 per board. Assume that the cost of each unit in beginning inventory is equal to 2020 inventory cost. Blizzard uses a denominator level of 1,200 units. • Prepare an income statement assuming Blizzard uses variable costing. • Prepare an income statement assuming Blizzard uses absorption costing. • Compute the breakeven in units under variable and absorption costing.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

! Required information [The following information applies to the questions displayed below.] Shadee Corporation expects to sell 560 sun shades in May and 330 in June. Each shade sells for $151. Shadee's beginning and ending finished goods inventories for May are 80 and 50 shades, respectively. Ending finished goods inventory for June will be 70 shades. Each shade requires a total of $55.00 in direct materials that includes 4 adjustable poles that cost $10.00 each. Shadee expects to have 130 in direct materials inventory on May 1, 100 poles in inventory on May 31, and 110 poles in inventory on June 30. Suppose that each shade takes three direct labor hour to produce and Shadee pays its workers $14 per hour. Additionally, Shadee's fixed manufacturing overhead is $12,000 per month, and variable manufacturing overhead is $14 per unit produced. Additional information: Selling costs are expected to be 7 percent of sales. • Fixed administrative expenses per month total $1,700. Required:…
! Required information [The following information applies to the questions displayed below.) Shadee Corporation expects to sell 610 sun shades in May and 350 in June. Each shade sells for $144. Shadee's beginning and ending finished goods inventories for May are 70 and 60 shades, respectively. Ending finished goods inventory for June will be 55 shades. Each shade requires a total of $45.00 in direct materials that includes 4 adjustable poles that cost $5.00 each. Shadee expects to have 130 in direct materials inventory on May 1, 90 poles in inventory on May 31, and 110 poles in inventory on June 30. Suppose that each shade takes three direct labor hour to produce and Shadee pays its workers $15 per hour. Additionally, Shadee's fixed manufacturing overhead is $9,000 per month, and variable manufacturing overhead is $13 per unit produced. Use the information and solutions presented to complete the requirements. Required: 1. Determine Shadee's budgeted manufacturing cost per shade. (Note:…
Shadee Corp. expects to sell 590 sun visors in May and 430 in June. Each visor sells for $21. Shadee’s beginning and ending finished goods inventories for May are 70 and 45 units, respectively. Ending finished goods inventory for June will be 70 units. Each visor requires a total of $5.50 in direct materials that includes an adjustable closure that the company purchases from a supplier at a cost of $2.00 each. Shadee wants to have 27 closures on hand on May 1, 16 closures on May 31, and 24 closures on June 30. Additionally, Shadee’s fixed manufacturing overhead is $1,300 per month, and variable manufacturing overhead is $2.50 per unit produced. Required: 1. Determine Shadee's budgeted cost of closures purchased for May and June. 2. Determine Shadee's budget manufacturing overhead for May and June.
tamarisk, Inc. is a company that manufactures and sells a single product. Unit sales for each of the four quarters of 2020 are projected as follows. Quarter Units First 96,000 Second 180,000 Third 660,000 Fourth 144,000 Annual total 1,080,000 Tamarisk incurs variable manufacturing costs of $0.40 per unit and variable nonmanufacturing costs of $0.35 per unit. Tamarisk will incur fixed manufacturing costs of $864,000 and fixed nonmanufacturing costs of $1,296,000. Tamarisk will sell its product for $4 per unit. (a) Determine the amount of net income Tamarisk will report in each of the four quarters of 2020, assuming actual sales are as projected and employing the integral approach to interim financial reporting. (Ignore income taxes.) Repeat the analysis under the discrete approach. 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Net income (Integral Approach) $ $ $ $…
Estrada Corporation produced 200,000 watches that it sold for $20 each during 2019. The company determined that fixed manufacturing cost per unit was $9 per watch. The company reported a $1,200,000 gross margin on its 2019 financial statements. Required Determine the variable cost per unit, the total variable cost, and the total contribution margin.
Sarasota, Inc. is a company that manufactures and sells a single product. Unit sales for each of the four quarters of 2020 are projected as follows. Quarter Units First 64,000 Second 120,000 Third 440,000 Fourth 96,000 Annual total 720,000 Sarasota incurs variable manufacturing costs of $0.40 per unit and variable nonmanufacturing costs of $0.35 per unit. Sarasota will incur fixed manufacturing costs of $576,000 and fixed nonmanufacturing costs of $864,000. Sarasota will sell its product for $4 per unit. 1. Determine the amount of net income Sarasota will report in each of the four quarters of 2020, assuming actual sales are as projected and employing the integral approach to interim financial reporting. (Ignore income taxes.) Repeat the analysis under the discrete approach. (Round answers to 0 decimal places) 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Net income (Integral Approach) Net income (Discrete Approach)…
! Required information [The following information applies to the questions displayed below.] Shadee Corporation expects to sell 500 sun shades in May and 390 in June. Each shade sells for $144. Shadee's beginning and ending finished goods inventories for May are 80 and 60 shades, respectively. Ending finished goods inventory for June will be 70 shades. Each shade requires a total of $50.00 in direct materials that includes 4 adjustable poles that cost $10.00 each. Shadee expects to have 130 in direct materials inventory on May 1, 100 poles in inventory on May 31, and 100 poles in inventory on June 30. Suppose that each shade takes three direct labor hour to produce and Shadee pays its workers $15 per hour. Additionally, Shadee's fixed manufacturing overhead is $8,000 per month, and variable manufacturing overhead is $12 per unit produced. Additional information: . Selling costs are expected to be 11 percent of sales. • Fixed administrative expenses per month total $1,600. Required:…
You are required show ALL supportingworkings where necessary and state any assumption(s) made. _C-V-P AnalysisGreek Manufacturing Company produces and sells a line of product that are sold usually all year round. Thecompany has a maximum production capacity of 100,000 units per year. Operating at normal capacity, thebusiness earned Operating Income of $600,000 in 2020. The following cost data has been prepared for theyear ended December 31, 2020.Selling price per unit……………………………………… $50.00Production Costs:Direct Materials …………………………………. $10.00Direct Labour ……………………………………. $8.00Variable Manufacturing Overhead ……………. $7.00Fixed Manufacturing Overhead…………....................... $450,000Fixed Selling & Administrative Expenses……………… $300,000Variable selling expense per unit ………………………. $10.00Required: a. Using the equation method calculate the normal capacity of the business b.Assuming sales equal to the normal capacity calculated in (a) above, prepare a contribution margin income…
Iguana, Inc., manufactures bamboo picture frames that sell for $30 each. Each frame requires 4 linear feet of bamboo, which costs $2.50 per foot. Each frame takes approximately 30 minutes to build, and the labor rate averages $12 per hour. Iguana has the following inventory policies: Ending finished goods inventory should be 40 percent of next month’s sales. Ending direct materials inventory should be 30 percent of next month’s production. Expected unit sales (frames) for the upcoming months follow: March 280 April 260 May 310 June 410 July 385 August 435 Variable manufacturing overhead is incurred at a rate of $0.40 per unit produced. Annual fixed manufacturing overhead is estimated to be $7,800 ($650 per month) for expected production of 3,000 units for the year. Selling and administrative expenses are estimated at $700 per month plus $0.50 per unit sold. Iguana, Inc., had $10,900 cash on hand on April 1. Of its sales, 80 percent is in cash. Of the credit…
Faber Manufacturing, Inc., of St. Paul, Minnesota has an economic order quantity considering backordering of 763, a maximum backordering quantity in units of 480, annual holding cost/unit = $3.5; lead time = 1.4 month (the firm operates 12 months per year). If the firm's customers do not object to backordering and each unit backordered costs $ 4.5/year, then: What is the maximum inventory level?
The Hurley Hat Company manufactures baseball hats. Hurley’s primary customers are sporting goods stores that supply uniforms to youth baseball teams. Following is Hurley’s income statement for 2018: In 2018, Hurley produced and sold 200,000 baseball hats. Of the Cost of Goods gold, $150,000 is fixed; 80% of the Selling and Administrative Expenses are fixed. There were no beginning inventories on January 1, 2018. The company is considering two options to increase sales. Option 1: The company is operating at 100,000 hats below full production capacity and is considering increasing advertising to increase sales to the production capacity level in 2019. The marketing director predicts that an additional $100,000 expenditure for advertising Would increase sales to 300,000 hats per year. Option 2: The sales manager has been negotiating with buyers for several national sporting goods retailers and recommends the company expand production capacity to 400,000 hats in order to secure long-term…
The Hame Company manufactures trendy, good-looking, moderately priced umbrellas. The following data are for the year ended December 31, 2020: 100,000 units Beginning inventory, January 1, 2020 50,000 units Ending inventory, December 31, 2020 2020 Sales 400,000 units Selling price $25 per unit Variable manufacturing cost per unit, including direct materials $6 per unit Variable selling & admin. cost per unit sold S2 per unit sold Fixed manufacturing costs $1,625,000 Fixed selling & admin. costs $1,100,000 Required: Assume standard costs per unit are the same for units in beginning inventory and units produced during the year. Also, assume no price, spending, or efficiency variances. Prepare income statement under variable costing for the year ended December 31, 2020.