Gates Manufacturing operations for 2021 are as follows: $ Per unit: Sales price 100 Direct material cost 36 Direct wages 8 Variable production overhead 6 Per month: Fixed production overhead 198 000 Fixed selling expenses 24 000 Fixed administration expenses 52 000 Variable selling expenses is 10% of sales value. Normal capacity was 11 000 units per month. January February Units Units Sales 20 000 24 000 Production 24 000 20 000 Using the two methods: C. Prepare the Marginal Income Statement and the Absorption Income Statement for March and April

Gates Manufacturing operations for 2021 are as follows: $ Per unit: Sales price 100 Direct material cost 36 Direct wages 8 Variable production overhead 6 Per month: Fixed production overhead 198 000 Fixed selling expenses 24 000 Fixed administration expenses 52 000 Variable selling expenses is 10% of sales value. Normal capacity was 11 000 units per month. January February Units Units Sales 20 000 24 000 Production 24 000 20 000 Using the two methods: C. Prepare the Marginal Income Statement and the Absorption Income Statement for March and April

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 22E: Ellerson Company provided the following information for the last calendar year: During the year,...

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Income Statements under Absorption and Variable Costing In the coming year, Kalling Company expects to sell 28,700 units at 32 each. Kallings controller provided the following information for the coming year: Required: 1. Calculate the cost of one unit of product under absorption costing. 2. Calculate the cost of one unit of product under variable costing. 3. Calculate operating income under absorption costing for next year. 4. Calculate operating income under variable costing for next year.
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.
West Island distributes a single product. The companys sales and expenses for the month of June are shown. Using the information presented, answer these questions: A. What is the break-even point in units sold and dollar sales? B. What is the total contribution margin at the break-even point? C. If West Island wants to earn a profit of $21,000, how many units would they have to sell? D. Prepare a contribution margin income statement that reflects sales necessary to achieve the target profit.
The cost data for BC Billing Solutions for the year 2020 is as follows: Using the high-low method, express the companys overtime wages as an equation where x represents number of invoices processed. Assume BC has monthly fixed costs of $3,800. Predict the overtime wages if 9,000 invoices are processed. Predict the overtime wages if 6,500 invoices are processed. Using Excel, create a scatter graph of the cost data and explain the relationship between the number of invoices processed and overtime wage expense.
Olivian Company wants to earn 420,000 in net (after-tax) income next year. Its product is priced at 275 per unit. Product costs include: Variable selling expense is 14 per unit; fixed selling and administrative expense totals 290,000. Olivian has a tax rate of 40 percent. Required: 1. Calculate the before-tax profit needed to achieve an after-tax target of 420,000. 2. Calculate the number of units that will yield operating income calculated in Requirement 1 above. (Round to the nearest unit.) 3. Prepare an income statement for Olivian Company for the coming year based on the number of units computed in Requirement 2. 4. What if Olivian had a 35 percent tax rate? Would the units sold to reach a 420,000 target net income be higher or lower than the units calculated in Requirement 3? Calculate the number of units needed at the new tax rate. (Round dollar amounts to the nearest dollar and unit amounts to the nearest unit.)
Gates Manufacturing operations for 2021 are as follows: $Per unit: Sales price 100 Direct material cost 36 Direct wages 8 Variable production overhead 6Per month: Fixed production overhead 198 000 Fixed selling expenses 24 000 Fixed administration expenses 52 000Variable selling expenses is 10% of sales value.Normal capacity was 11 000 units per month. January February Units UnitsSales 20 000 24 000Production 24 000 20 000 Using the two methods:D. Reconcile the net profits for March and April
Gates Manufacturing operations for 2021 are as follows: $Per unit: Sales price 100 Direct material cost 36 Direct wages 8 Variable production overhead 6Per month: Fixed production overhead 198 000 Fixed selling expenses 24 000 Fixed administration expenses 52 000Variable selling expenses is 10% of sales value.Normal capacity was 11 000 units per month. January February Units UnitsSales 20 000 24 000Production 24 000 20 000 Using the two methods:A. Compute the unit production cost B. Determine the value of the closing inventory
Presented here is the income statement for Big Sky Incorporated for the month of February: Sales $ 60,000 Cost of goods sold 51,900 Gross profit $ 8, 100 Operating expenses 15,200 Operating loss $ (7,100) Based on an analysis of cost behavior patterns, it has been determined that the company's contribution margin ratio is 19%. Required: Rearrange the preceding income statement to the contribution margin format. If sales increase by 10%, what will be the firm's operating income (or loss)? Calculate the amount of revenue required for Big Sky to break even.
Smithen Company, a wholesale distributor, has been operating for only a few months. The company sells three products-sinks, mirrors, and vanities. Budgeted sales by product and in total for the coming month are shown below based on planned unit sales as follows: Sinks Mirrors Vanities Total Units 1,000 500 500 2,000 Percentage of total sales Sales Variable expenses Contribution margin Contribution margin per unit Fixed expenses Operating income Break-even point in unit sales: Percentage sex 25% 25% 100% Break-even point in sales dollars: Total Fixed expenses. Weighted-average CM per unit Sinks 48% Product Mirrors 20% $264,000 100.00% $110,000 100.00% $176,000 100.00% $550,000 100.00% 80,000 30.30% 72,000 65.45% 82,000 46.59% 219,300 39.87% 53.41% 60.13% $184,000 $ 94,000 330,700 69.70% 38,000 34.55% S 76.00 $ 184.00 $ 188.00 Fixed expenses Overall CM ratio $293,300 $158.00 Vanities 32% $293,300 0.60 1,856.33 units Total 100% 293,300 $ 37,400 = $487,798.61 *($184.00 0.50) + ($76.00 x…
Maxim Manufacturing operations for 2022 are as follows: Per unit: $ Sales price 50 Direct material cost 18 Direct wages 4 Variable production overhead 3 Per month: Fixed production overhead 99 000 Fixed selling expenses 14 000 Fixed administration expenses 26 000 Variable selling expenses is 10% of sales value. Normal capacity was 11 000 units per month. October 2022 November 2022 Units Units Sales 10 000…
Given: The annual accounting data for 2018, presented below. : 1500K$ : 1000K$ Fixed factory overhead : 300K$ Variable factory overhead: 200KS Fixed admin costs : 500K$ Variable admin costs : 250KS : 400K$ 50KS :6000K$ Direct material Direct labour Sales salaries Sales commissions Sales Revenues Required: Write an income statement for the data given above, using a) the gross margin technique, and b) the contribution margin technique
Prepare an income statement of Mary's manufacturers the year ended 31 December using the: 1. Marginal costing method. 2. Absorption costing method.