Garrison Polymers produces synthetic materials used in the manufacturing of electronic components. In 2015, its first year of operations, Garrison produced 5,000 tons of synthetic material and sold 3,200 tons. In 2016, the company produced the same amount and sales were 6,000 tons (i.e., the company sold all of its inventory). In each year, the selling price per ton was $2,500, variable manufacturing costs per ton were $500, and variable selling expenses were $700 per ton. Fixed manufacturing costs were $5,000,000, and fixed administrative expenses were $600,000. What is the net income under variable costing in year 2015? Help

Garrison Polymers produces synthetic materials used in the manufacturing of electronic components. In 2015, its first year of operations, Garrison produced 5,000 tons of synthetic material and sold 3,200 tons. In 2016, the company produced the same amount and sales were 6,000 tons (i.e., the company sold all of its inventory). In each year, the selling price per ton was $2,500, variable manufacturing costs per ton were $500, and variable selling expenses were $700 per ton. Fixed manufacturing costs were $5,000,000, and fixed administrative expenses were $600,000. What is the net income under variable costing in year 2015? Help

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter9: Responsibility Accounting And Decentralization

Section: Chapter Questions

Problem 8EA: Using the information in the previous exercises about Marleys Manufacturing, determine the operating...

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Garrison Polymers produces synthetic materials used in the manufacturing of electronic components. In 2015, its first year of operations, Garrison produced 5,000 tons of synthetic material and sold 3,200 tons. In 2016, the company produced the same amount and sales were 6,000 tons (i.e., the company sold all of its inventory). In each year, the selling price per ton was $2,500, variable manufacturing costs per ton were $500, and variable selling expenses were $700 per ton. Fixed manufacturing costs were $5,000,000, and fixed administrative expenses were $600,000. What is the net income under variable costing in year 2015?
Jackson Company produces plastic that is used for injection-molding applications such as gears for small motors. In 2016, the first year of operations, Jackson produced 6,000 tons of plastic and sold 4,500 tons. In 2017, the production and sales results were exactly reversed. In each year, the selling price per ton was $2,000, variable manufacturing costs were 19% of the sales price of units produced, variable selling expenses were 8% of the selling price of units sold, fixed manufacturing costs were $4,380,000, and fixed administrative expenses were $540,000. Prepare income statements for each year using variable costing. JACKSON COMPANYIncome Statement Variable Costing $…
Harper Manufacturing produces a special type of polymer used in medical devices. In 2022, the first year of operations, Harper produced 5,500 tons of polymer and sold 3,200 tons. In 2023, the company produced the same amount but sold 6,500 tons (i.e., selling all of its inventory). The selling price per ton was $1,800, variable manufacturing costs per ton were $350, and variable selling expenses were $500 per ton. Fixed manufacturing costs were $3,500,000, and fixed administrative expenses were $600,000. Compute net income under variable costing for 2022.
In 2012, Grant Co. sold 160,000 units of its product at a selling price of $40. The variable cost per unit was $30, and Grant reported net income for the year of $200,000. What was the amount of Grant's fixed costs for the year?
Jordon Company produced and sold 50,000 units in 2014. The units sold for $140 each. During the period, the following cost were incurred. Variable selling and administrative expenses per unit Variable manufacturing overhead per unit Direct labor per unit $ 15 20 30 Direct materials per unit 25 Fixed selling and administrative expenses $ 5,50,000 Fixed manufacturing overhead 6,50,000 Tax rate is 40%. Calculate the gross margin per unit for Jordon Company.
Carney Company manufactures cappuccino makers. For the first eight months of 2010, the company reported the following operating results while operating at 80% of plant capacity: Sales (500,000 units) Cost of goods sold Gross profit Operating expenses Net income Revenues Cost of Goods Sold Operating Expense $90,000,000 54,000,000 36,000,000 An analysis of costs and expenses reveals that variable cost of goods sold is $95 per unit and variable operating expenses are $35 per unit. In September, Carney Company receives a special order for 30,000 machines at $135 each from a major coffee shop franchise. Acceptance of the order would result in $10,000 of shipping costs but no increase in fixed expenses. Prepare an incremental analysis for the special order Reject Order Net Income 24,000,000 $12,000,000 Accept Order
Sheffield Corp. sells its product for $75 per unit. During 2016, it produced 70,000 units and sold 55000 units (there was no beginning inventory). Costs per unit are: direct materials $16, direct labor $15, and variable overhead $4. Fixed costs are: $910,000 manufacturing overhead, and $93,000 selling and administrative expenses. The per-unit manufacturing cost under absorption costing is__.
Partial-productivity measurement. Gable Company manufactures wallets from fabric. In 2016, Gable made 2,160,000 wallets using 1,600,000 yards of fabric. In 2016, Gable has capacity to make 2,448,000 wallets and incurs a cost of $8,568,000 for this capacity. In 2017, Gable plans to make 2,203,200 wallets, make fabric use more efficient, and reduce capacity. Suppose that in 2017 Gable makes 2,203,200 wallets, uses 1,440,000 yards of fabric, and reduces capacity to 2,295,000 wallets at a cost of $7,803,000. Assume the fabric costs $4.00 per yard in 2017 and $4.10 per yard in 2016. Q.What additional information does TFP provide that partial-productivity measures do not?
Partial-productivity measurement. Gable Company manufactures wallets from fabric. In 2016, Gable made 2,160,000 wallets using 1,600,000 yards of fabric. In 2016, Gable has capacity to make 2,448,000 wallets and incurs a cost of $8,568,000 for this capacity. In 2017, Gable plans to make 2,203,200 wallets, make fabric use more efficient, and reduce capacity. Suppose that in 2017 Gable makes 2,203,200 wallets, uses 1,440,000 yards of fabric, and reduces capacity to 2,295,000 wallets at a cost of $7,803,000. Q. Calculate the partial-productivity ratios for materials and conversion (capacity costs) for 2017, and compare them to a benchmark for 2016 calculated based on 2017 output.
Partial-productivity measurement. Gable Company manufactures wallets from fabric. In 2016, Gable made 2,160,000 wallets using 1,600,000 yards of fabric. In 2016, Gable has capacity to make 2,448,000 wallets and incurs a cost of $8,568,000 for this capacity. In 2017, Gable plans to make 2,203,200 wallets, make fabric use more efficient, and reduce capacity. Suppose that in 2017 Gable makes 2,203,200 wallets, uses 1,440,000 yards of fabric, and reduces capacity to 2,295,000 wallets at a cost of $7,803,000.
Gorham, Inc., a manufacturer of plastic products, reports the following manufacturing costs and account analysis classification for the year ended December 31, 2017. Gorham, Inc., produced 70,000 units of product in 2017. Gorham's management is estimating costs for 2018 on the basis of 2017 numbers. The following additional information is available for 2018. - X Data Table More Info Account Classification Amount a. Direct materials prices in 2018 are expected to increase by 8% compared with 2017. b. Under the terms of the labor contract, direct manufacturing labor wage rates are expected to increase by 4% in 2018 compared with 2017. Direct materials All variable $ 367,500 c. Power rates and wage rates for supervision, materials handling, and maintenance are not expected to change from 2017 to 2018. Direct manufacturing labor All variable 297,500 Power All variable 87,500 d. Depreciation costs are expected to increase by 9%, and rent, property taxes, and administration costs are…
Rundle Corporation makes and sells state-of-the-art electronics products. One of its segments produces The Math Machine, an inexpensive calculator. The company's chief accountant recently prepared the following income statement showing annual revenues and expenses associated with the segment's operating activities. The relevant range for the production and sale of the calculators is between 32,000 and 72,000 units per year. Revenue (35,000 units x $12.00) Unit-level variable costs Materials cost (35,000 x $3.00) Labor cost (35,000 x $2.00) Manufacturing overhead (35,000 x $0.20) Shipping and handling (35,000 x $0.28) Sales commissions (35,000 × $2.00) Contribution margin Fixed expenses Advertising costs Salary of production supervisor Allocated companywide facility-level expenses Net loss Required $ 420,000 (105,000) (70,000) (7,000) (9,800) (70,000) 158,200 (27,000) (67,000) (83,000) $ (18,800) a. A large discount store has approached the owner of Rundle about buying 6,000…