Exercise 18-5 Measuring costs using high-low method P1 Felix & Co. reports the following information. (1) Use the high-low method to estimate the fixed and variable components of total costs. (2) Estimate total costs if 3,000 units are produced. Period 3 5 Units Produced Total Costs 0 $2,500 400 3,100 800 3,700 4,300 4,900 1,200 1,600 Period 6...... 7...... 8. 10...... Units Produced Total Costs 2,000 $5,500 2,400 6,100 2,800 6,700 3,200 3,600 7,300 7,900

Exercise 18-5 Measuring costs using high-low method P1 Felix & Co. reports the following information. (1) Use the high-low method to estimate the fixed and variable components of total costs. (2) Estimate total costs if 3,000 units are produced. Period 3 5 Units Produced Total Costs 0 $2,500 400 3,100 800 3,700 4,300 4,900 1,200 1,600 Period 6...... 7...... 8. 10...... Units Produced Total Costs 2,000 $5,500 2,400 6,100 2,800 6,700 3,200 3,600 7,300 7,900

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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EXERCISE 1-11 Cost Behavior; Contribution Format Income Statement L01-4, L01-6 Harris Company manufactures and sells a single product. A partially completed schedule of the com- pany's total costs and costs per unit over the relevant range of 30,000 to 50,000 units is given below: Vist Jumsch Total costs: Variable cost. Fixed cost Total cost. Costs per unit: Variable cost. Fixed cost Total cost per unit. Units Produced and Sold 40,000 30,000 $180,000 300,000 $480,000 ? ? ? ? ? ? ? ? ? 50,000 ? ? ? ? ? ? Required: 1. Complete the above schedule of the company's total costs and costs per unit. 2. Assume that the company produces and sells 45,000 units during the year at a selling price of $16 per unit. Prepare a contribution format income statement for the year. 6 107
Exercise 18-13 (Algo) Computing sales to achieve target income LO C2 Sunn Company manufactures a single product that sells for $145 per unit and whose variable costs are $87 per unit. The company's annual fixed costs are $916,400. Management targets an annual income of $1,450,000. (1) Compute the unit sales to earn the target income. Numerator: 1 1 Denominator: (2) Compute the dollar sales to earn the target income. Numerator: 1 1 Denominator: = || = = || Units to Achieve Target Units to achieve target 0 Dollars to Achieve Target Dollars to achieve target 0
Exercises 4 Event Company produces a single product with the following characteristics: price per unit, $30.00; variable material cost per unit, $9.20; variable labor cost per unit, $4.40; variable overhead cost per unit, $2.20; and fixed overhead cost per unit, $3.00. Event Company's manufacturing fixed costs are $5 million, and selling, general, and administration fixed costs are $1.5 million. What dollar sales are required for Event Company to earn a target profit of $600,000? Exercises 5 The following information pertains to Torasic Company's budgeted income statement for the month of June: Sales (1,500 units at $300) $450,000 Variable cost 200,000 250,000 280,000 $(30,000) Contribution margin Fixed cost Net loss Required a) Determine the company's breakeven point in both units and dollars. b) The sales manager believes that a $25,000 increase in the monthly advertising expenses will result in a considerable increase in sales. How much of an increase in sales must result from…
EXERCISE 1-7 Direct and Indirect Costs L01-1 2.000.81 10 Kubin Company's relevant range of production is 18,000 to 22,000 units. When it produces and sells 20,000 units, its average costs per unit are as follows: Juris Required: 1. 2. 3. 4. a. b. a. b. the Untus ha babubong asin Direct materials.. Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense.. Sales commissions...... Variable administrative expense. b. Average Cost per Unit $7.00 $4.00 $1.50 $5.00 $3.50 $2.50 $1.00 $0.50 Assume the cost object is units of production: What is the total direct manufacturing cost incurred to make 20,000 units? What is the total indirect manufacturing cost incurred to make 20,000 units? Assume the cost object is the Manufacturing Department and that its total output is 20,000 units. How much total manufacturing cost is directly traceable to the Manufacturing Department? How much total manufacturing cost is an indirect cost that…
Question 19?
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Problem 19-4AA (Algo) Converting variable costing income to absorption costing income LO A2 Dowell Company produces a single product. Its income under variable costing for its first two years of operation follow. Variable Costing Income Income Additional Information a. Sales and production data for these first two years follow. Unite Units produced Units sold Direct materials Direct labor Year 1. Year 2 $ 47,000 $ 650,000 Year 1 48,700 37,000 b. The company's $37 per unit product cost (for both years) using absorption costing consists of the following. Year 2 48,700 60,400 Variable overhead Fixed overhead ($470,000/47,000 units) Total product cost per unit Variable costing income Absorption costing income $7 11 9 Required: Prepare a statement to convert variable costing income to absorption costing income for both years. (Leave no cells blank - be certain to enter "0" wherever required.) 10 $ 37 Dowell Company Convert Variable Costing Income to Absorption Costing Income Year 1 $ 47,000…
Exercise 18 -8 (Static) Computing missing amounts in contribution margin income statements LO A1 Compute the missing amounts in the contribution income statement shown below: (Round "Per Unit" answers to 2 decimal places.) \table[[Number of units sold, Company A, Company B], [,,,, 1,975, ], [,, otal,,unit, Total, Per unit], [Sales, $, 208, 000, $, 65.00,, ], [Variable costs,, 150, 400,,, 39, 500, ], [Contribution margin,,,,, 43, 450, ], [Fixed costs,,,,,19, 750, ], [ Income, $, 46, 400,,,,]]
Exercise 17-12 (Algo) Cost drivers for activity-based costing LO P3 A manufacturer reports three activities: finishing production; product design; and sales order processing. Determine whether each of the following cost drivers relates to finishing production, design, or order processing. Cost Driver 1. Direct labor hours to finish production 2. Number of design changes 3. Finishing machine hours 4. Number of design hours 5. Number of shipments made 6. Number of sales orders processed Activity