Callister Manufacturing produces a specialized gear. The following is Callister's cost structure: Manufacturing cost Variable cost per gear Total fixed cost for the year $135 $1,248,000 $672,000 Selling and administrative $38 expense In its first year of operations, Callister produced 90,500 gears but only sold 86,300. What is the total cost that would be assigned to Callister's finished goods inventory at the end of the first year of operations under variable costing? a) $565,800 b) $540,000 c) $567,000 d) $585,400

Callister Manufacturing produces a specialized gear. The following is Callister's cost structure: Manufacturing cost Variable cost per gear Total fixed cost for the year $135 $1,248,000 $672,000 Selling and administrative $38 expense In its first year of operations, Callister produced 90,500 gears but only sold 86,300. What is the total cost that would be assigned to Callister's finished goods inventory at the end of the first year of operations under variable costing? a) $565,800 b) $540,000 c) $567,000 d) $585,400

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter2: Basic Managerial Accounting Concepts

Section: Chapter Questions

Problem 39E: Cost Classification Loring Company incurred the following costs last year: Required: 1. Classify...

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Ellerson Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 278,000, direct labor cost was 189,000, and overhead cost was 523,000. During the year, 100,000 units were completed. Refer to Exercise 2.21. Last calendar year, Ellerson recognized revenue of 1,312,000 and had selling and administrative expenses of 204,600. Required: 1. What is the cost of goods sold for last year? 2. Prepare an income statement for Ellerson for last year.
Pattison Products, Inc., began operations in October and manufactured 40,000 units during the month with the following unit costs: Fixed overhead per unit = 280,000/40,000 units produced = 7. Total fixed factory overhead is 280,000 per month. During October, 38,400 units were sold at a price of 24, and fixed marketing and administrative expenses were 130,500. Required: 1. Calculate the cost of each unit using absorption costing. 2. How many units remain in ending inventory? What is the cost of ending inventory using absorption costing? 3. Prepare an absorption-costing income statement for Pattison Products, Inc., for the month of October. 4. What if November production was 40,000 units, costs were stable, and sales were 41,000 units? What is the cost of ending inventory? What is operating income for November?
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