Grainger Company produces only one product and sells that product for $110 per unit. Cost information for the product is as follows: Direct Material $15 per Unit Direct Labor $25 per Unit Variable Overhead $6 per Unit Fixed Overhead $33,500 Selling expenses are $3 per unit and are all variable. Administrative expenses of $15,000 are all fixed. Grainger produced 5,000 units; sold 4,000; and had no beginning inventory. A. Compute net income under i. Absorption Costing ii. Variable Costing B. Which costing method provide higher net income? By how much? The method provided more net income by $

Grainger Company produces only one product and sells that product for $110 per unit. Cost information for the product is as follows: Direct Material $15 per Unit Direct Labor $25 per Unit Variable Overhead $6 per Unit Fixed Overhead $33,500 Selling expenses are $3 per unit and are all variable. Administrative expenses of $15,000 are all fixed. Grainger produced 5,000 units; sold 4,000; and had no beginning inventory. A. Compute net income under i. Absorption Costing ii. Variable Costing B. Which costing method provide higher net income? By how much? The method provided more net income by $

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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Grainger Company produces only one product and sells that product for $90 per unit. Cost information for the product is as follows: Direct Material $15 per Unit Direct Labor $26 per Unit Variable Overhead $4 per Unit Fixed Overhead $34,000 Selling expenses are $3 per unit and are all variable. Administrative expenses of $15,000 are all fixed. Grainger produced 5,000 units; sold 4,000; and had no beginning inventory. A. Compute net income under i. Absorption Costing $fill in the blank 1 ii. Variable Costing $fill in the blank 2 B. Which costing method provide higher net income? By how much? The method provided more net income by $fill in the blank 4 .
arded ed Krepps Corporation produces a single product. Last year, Krepps manufactured 26,160 units and sold 20,900 units. Production costs for the year were as follows: Mc Graw Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Sales totaled $971,850 for the year, variable selling and administrative expenses totaled $108,680, and fixed selling and administrative expenses totaled $190,968. There was no beginning inventory. Assume that direct labor is a variable cost. Under variable costing, the company's net operating income for the year would be: Multiple Choice O $32,086 lower than under absorption costing. $ 188,352 $ 112,488 $ 224,976 $ 470,880 O $32,086 higher than under absorption costing. O $94,680 lower than under absorption costing.
Wang Company manufactures and sells a single product that sells for $640 per unit; variable costs are $352 per unit. Annual fixed costs are $985,500. Current sales volume is $4,390,000. Management targets an annual income of $1,315,000. Compute the unit sales to earn the target income. Select one: a. 6.164. Ob. 7,988. O c. 19,383. O d. 3,422. Oe. 4,934.
Findus Foods company produced 370,000 units and sold 310,000 units at a sales price of $50 per unit. There were no units in beginning inventory. Cost information for this period is shown in the following table: Production costs Direct materials Direct labor Variable overhead Fixed overhead Non production costs Variable selling and administrative Fixed selling and administrative Costs $2.00 per unit $.80 per unit $814,000 in total $481,000 in total 65 $78,000 in total $210,000 in total What is the product cost per unit under absorption costing?
Chandler Company sells its product for $108 per unit. Variable manufacturing costs per unit are $49, and fixed manufacturing costs at the normal operating level of 12,000 units are $240,000. Variable selling expenses are $17 per unit sold. Fixed administrative expenses total S104,000. Chandler had no beginning inventory for the year. During the year, the company produced 12,000 units and sold 9,000. Would net income for Chandler Company be higher if calculated using variable costing or using absorption costing? Calculate reported income using each method. Do not use negative signs with any answers. Absorption Costing Income Statement Sales Answer Cost of Goods Sold: Beginning Inventory Answer Variable Costs Answer Fixed Costs Answer Less: Ending Inventory Answer Cost of Goods Sold Answer Answer Answer Answer Answer Administrative expense Answer Net Income Answer Variable Costing Income Statement Sales Answer Cost of Goods Sold: Beginning Inventory Answer Variable Costs Answer Answer…
Jackson Manufacturing, Inc., makes two types of industrial component parts—the XT-100 and the LT-200. An absorption costing income statement for the most recent period is shown: Jackson Manufacturing Inc. Income Statement Sales $2,100,000 Cost of goods sold 1,600,000 Gross margin 500,000 Selling and administrative expenses 550,000 Net operating loss $ (50,000) Table Summary: Income statement with two-line heading. Descriptions of income items are in first column and dollar values in second column. Jackson produced and sold 70,000 units of XT-100 at a price of $20 per unit and 17,500 units of LT-200 at a price of $40 per unit. The company’s traditional cost system allocates manufacturing overhead to products using a plantwide overhead rate and direct labor dollars as the allocation base. Additional information relating to the company’s two product lines is shown below:XT-100 LT-200 Total Direct materials $436,300 $251,700 $ 688,000 Direct labor $200,000 $104,000 304,000 Manufacturing…
Jax Incorporated reports the following data for its only product. The company had no beginning finished goods inventory and it uses absorption costing. Sales price $ 56.70 per unit Direct materials $ 9.70 per unit Direct labor $ 7.20 per unit Variable overhead $ 11.70 per unit Fixed overhead $ 944,700 per year 1. Compute gross profit assuming (a) 67,000 units are produced and 67,000 units are sold and (b) 94,000 units are produced and 67,000 units are sold.2. By how much would the company’s gross profit increase or decrease from producing 27,000 more units than it sells?
Krepps Corporation produces a single product. Last year, Krepps manufactured 33,930 units and sold 28,300 units. Production costs for the year were as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Sales totaled $1,287,650 for the year, variable selling and administrative expenses totaled $164,140, and fixed selling and administrative expenses totaled $206,973. There was no beginning inventory. Assume that direct labor is a variable cost. The contribution margin per unit was: (Round your Intermediate calculations to 2 decimal places.) Multiple Choice $19.50 per unit $24.20 per unit O $18.40 per unit $288,405 $145,899 $288,405 $542,880 $13.90 per unit
Grainger Company produces only one product and sells that product for $110 per unit. Cost information for the product is as follows: Direct Material $16 per Unit Direct Labor $26 per Unit Variable Overhead $6 per Unit Fixed Overhead $27,200 Selling expenses are $5 per unit and are all variable. Administrative expenses of $20,000 are all fixed. Grainger produced 4,000 units; sold 3,200; and had no beginning inventory. A. Compute net income under i. Absorption Costing $fill in the blank 1 ii. Variable Costing $fill in the blank 2 B. Which costing method provide higher net income? By how much? The method provided more net income by $fill in the blank 4 .
Ross Corporation manufactures and sells one product. The following information pertains to the company's first year of operations: Variable costs per unit: Direct materials $81 Fixed costs per year Direct labor $1,008,000 Fixed manufacturing overhead $2,520,000 Fixed selling and administrative $1,440,000 The company does not have any variable manufacturing overhead costs or variable selling and administrative costs. During its first year of operations, the company produced 36,000 units and sold 30,000 units. There was no ending work-in-process inventory. The company's only product is sold for $251 per unit. 9.1 What is the unit product cost under super-variable costing? 9.2 What is the net operating income under super-variable costing? 9.3 Assume that the company uses a variable costing system that assigns $28 of direct labor cost to each unit that is produced. How much higher or lower is variable costing income compared to that under super-variable costing? 9.4 Assume that the company…
A condensed income statement by product line for Crown Beverage Inc. indicated the following for King Cola for the past year: Sales $236,100 Cost of goods sold 112,000 Gross profit $124,100 Operating expenses 142,000 Loss from operations $(17,900) It is estimated that 13% of the cost of goods sold represents fixed factory overhead costs and that 21% of the operating expenses are fixed. Since King Cola is only one of many products, the fixed costs will not be materially affected if the product is discontinued. Question Content Area a. Prepare a differential analysis, dated March 3, to determine whether King Cola should be continued (Alternative 1) or discontinued (Alternative 2). If an amount is zero, enter zero "0". Use a minus sign to indicate a loss. Differential AnalysisContinue King Cola (Alt. 1) or Discontinue King Cola (Alt. 2)January 21 Continue KingCola (Alternative 1) Discontinue KingCola (Alternative 2) Differential Effecton Income(Alternative 2)…
The Southern Corporation manufactures a single product and has the following cost structure: Variable costs per unit: Production $ 33 Selling and administrative $ 16 Fixed costs per year: Production $ 130,830 Selling and administrative $ 107,280 Last year, 6,230 units were produced and 6,030 units were sold. There was no beginning inventory. The carrying value on the balance sheet of the ending inventory of finished goods under variable costing would be: