Denton Company manufactures and sells a single product. Cost data for the product are given: Variable costs per unit: Direct materials $ 6 Direct labor 10 Variable manufacturing overhead 4 Variable selling and administrative 2 Total variable cost perunit $ 22 Fixed costs per month: Fixed manufacturing overhead $ 60, 000 Fixed selling and administrative 163,000 Total fixed cost per month $ 223,000 The product sells for $51 per unit. Production and sales data for July and August, the first twomonths of operations, follow: Units Produced Units Sold July 15, 000 11,000 August 15,000 19,000 The company's Accounting Department has prepared the following absorption costing income statements for July and August: July August Sales $561, 000 $ 969,000 Cost of goods sold 264,000 456, 000 Gross margin 297,000 513,000 Selling and administrative expenses 185,000 201,000 Net operating income $ 112,000 $ 312,000 Required: 1. Determine the unit product cost under: a.Absorption costing. b. Variable costing. 2. Prepare variable costing income statements for July and August. 3. Reconcile the variable costing and absorption costing net operating incomes.

Absorption costing: Under variable costing, product costs shall include all the manufacturing costs…

Answered: Denton Company manufactures and sells a…

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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The table below shows monthly data collected on production costs and on the number of units produced over a twelve month period. Month Total Production Costs Level of Activity (Units Produced) July $ 230,000 3,500 August 250,000 3,750 September 260,000 3,800 October 220,000 3,400 November 340,000 5,800 December 330,000 5,500 January 200,000 2,900 February 210,000 3,300 March 240,000 3,600 April 380,000 5,900 May 350,000 5,600 June 290,000 5,000 Required: Determine the variable cost per unit and the fixed cost using the high-low method. What is the equation of the total mixed cost function? 3. Prepare the scatter diagram, clearly showing any outliers
Salem Company has the following costs information for June where production volume is 2,000 units: 7. The variable cost and fixed cost per unit respectively are: A) $8.75 and $1.50. B) $8.75 and $0.25. C) $4.25 and $3.00. D) $8.50 and $12.00. B) fixed cost per unit. C) total variable cost. D) total cost per unit. A) 1,000 B) 1,800 Direct materials Direct labor 8. If production changes to 2.200 units, which cost will remain the same? A) variable cost per unit. C) 3,200 D) 2,600 Straight-line depreciation Rent expenses other fixed costs 9.The production budget shows expected unit sales of 16,000. Beginning finished goods units are 1,800. Required production units are 16,800. What are the desired ending finished goods units? A) B) D) 10. The production budget shows expected unit sales are 50,000. The required production units are 52,000. What are the beginning and desired ending finished goods units, respectively? Ending Units 2,000 5,000 $8,500 $9,000 5800 Beginning Units 5,000 3.000…
Subject : Cost Accounting
The table below shows monthly data collected on production costs and on the number of units produced over a twelve month period. Level of Activity (Units Produced) Month Total Production Costs July $230,000 3,500 August 250,000 3,750 September 260,000 3,800 October 220,000 3,400 November 340,000 5,800 December 330,000 5,500 January 200,000 2,900 February 210,000 3,300 March 240,000 3,600 April 380,000 5,900 Мay 350,000 5,600 June 290,000 5,000 a) Determine the variable cost per unit and the fixed cost using the high-low method. b) What is the equation of the total mixed cost function? c) Prepare the scatter diagram and insert the trendline or line of best-fit. use a scale of 2 cm to represent 1,000 units on the x-axis § 2 cm to represent $50,000 on the y- axís. d) Using the line of best-fit, determine the company's fixed cost per month and the variable cost per unit. (use og 5,000 units.) e) Which of the two methods appear more appropriate? Explain your answer.
The following is a summary of costs related to a month of manufacturing products: Direct Materials and Direct Labor = $225,000.00 Indirect Materials, Indirect Labor, and other actual FOH costs = $30,000.00 FOH costs applied to WIP during the month = $17,000.00 From the following, select the journal entry used to record the FOH applied to production during the month. Group of answer choices a) Debit FOH 17,000 and Credit WIP 17,000 b) Debit WIP 30,000 and Credit FOH 30,000 c) Debit FOH 30,000 and Credit Accounts Payable 30,000 d) Debit WIP 17,000 and Credit FOH 17,000
The table below shows monthly data collected on production costs and on the number of units produced over a twelve month period. Level of Activity (Units Produced) Month Total Production Costs July $230,000 3,500 August 250,000 3,750 September 260,000 3,800 October 220,000 3,400 November 340,000 5,800 December 330,000 5,500 January 200,000 2,900 February 210,000 3:300 March 240,000 3,600 Аpril 380,000 5,900 Мay 350,000 5,600 June 290,000 5,000 a) Determine the variable cost per unit and the fixed cost using the high-low method. b) What is the equation of the total mixed cost function? c) Prepare the scatter diagram, clearly showing any outliers. d) Using the line of best-fit, determine the company's fixed cost per month and the variable cost per unit. (use o 5 5,000 units.) e) In view of the department's cost behaviour pattern, which of the two methods appear more appropriate? Explain your answer.
Schoen Corp. manufactures three types of electrical motors. Type A is sold upon completion of the production assembly. Types B and C can be sold after production or sent to a different plant for further processing to add various capabilities to the motors. The following data are available for each of the three types of motors at the beginning of the month: Units to be produced Total costs to produce before further processing Total sales revenue if sold immediately Additional processing costs Total sales revenue if processed further Additional profit (or loss) if B is processed further: $ A 10,000 $240,000 300,000 0 0 B 8,000 $250,000 320,000 30,000 340,000 6,000 $240,000 300,000 20,000 360,000
Production workers for Benson Manufacturing Company provided 380 hours of labor in January and 660 hours in February. Benson expects to use 4,000 hours of labor during the year. The rental fee for the manufacturing facility is $16,000 per month. Required Based on this information, how much of the rental cost should be allocated to the products made in January and to those made in February? (Do not round intermediate calculations.) Month Allocated Cost January February
Betty DeRose, Inc. manufactures and sells a single product. Information related to the cost of producing this product for the past six months is provided below: Units Produced 5,360 4,840 7,580 4,930 6,110 7,620 Month June July August September October November Total Cost Incurred $126,017 $118,831 $155,833 $119,246 $136,932 $157, 195 Betty DeRose, Inc. expects to produce 6,495 units of this product during December. Using the high-low method, calculate Betty DeRose, Inc's expected total cost incurred for December.
The table below shows monthly data collected on production costs and on the number of units produced over a twelve month period. Month Total Production cost Lev)el of Activity (Units produce July $230,000 3,500 August 250,000 3,750 Septemer 260,000 3,800 October 220,000 3,400 November 340,000 5,800 December 330,000 5,500 January 200,000 2,900 February 210,000 3,300 March 240,000 3,600 April 380,000 5,900 May 350,000 5,600 June 290,000 5,000 a) Determine the variable cost per unit and the fixed cost using the high-low method.
Fresno Industries Inc. manufactures and sells high-quality camping tents. The company began operations on January 1 and operated at 100% of capacity (192,000 units) during the first month, creating an ending inventory of 21,000 units. During February, the company produced 171,000 units during the month but sold 192,000 units at $560 per unit. The February manufacturing costs and selling and administrative expenses were as follows: Number of Units Unit Cost TotalCost Manufacturing costs in February 1 beginning inventory: Variable 21,000 $280.00 $5,880,000 Fixed 21,000 24.00 504,000 Total $304.00 $6,384,000 Manufacturing costs in February: Variable 171,000 $280.00 $47,880,000 Fixed 171,000 27.70 4,736,700 Total $307.70 $52,616,700 Selling and administrative expenses in February: Variable 192,000 18.50 $3,552,000 Fixed 192,000 2.00 384,000 Total 20.50 $3,936,000 a. Prepare an income…

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