GRFN6215 & BUADG002 Online Classroom 09:05 Question 1 Foxwood Company is a metal and woodcutting manufacturer, selling products to tome construction market. Consider the following data for 2017: Sandpaper Materials-handling costs Lubricants and coolants $2,000 70,000 5.000 Miscellaneous indirect manufacturing labor Direct manufacturing labor 300,000 Direct materials inventory, Jan 1, 2017 Direct materials inventory, Dec. 31, 2017 Finishad-goods inventory, Jan. 1, 2017 Finished goods inventory, Dec. 21, 2017 Work-in-process inventory, Jan. 1, 2017 40,000 50,000 100,000 150,000 35,000 4.000 2,000 10,000 Work-in-process inventory, Dec. 31, 2017 14,000 Plane-leasing costs 54,000 Depreciation-plant equipment Property taxes on plant equipment Fire insurance on plant equipment Direct materials purchased 460,000 Revenues 1,360,000 Marketing promotions Marketing salaries 100,000 Distribution costs 70,000 Customer-service cost 00 1. Prepare an income statement with a separate supporting schedule of cost of goods manu- factured. For all manufacturing items, classify costs as direct costs or indirect costs and indicate by V or F whether each is a variable cost or a fixed cost (when the cost object is a product unit). If in doubt, decide on the basis of whether the total cost will change sub- stantially over a wide range of units produced. 2. Suppose that both the direct material costs and the plant-leasing costs are for the produc tion of 900,000 units. What is the direct material cost of each unit produced? What is the plant-leasing cost per unit? Assume that the plant-leasing cost is a fixed cost. 3. Suppose Foxwood Company manufactures 1,000,000 units next year. Repeat the compu- tation in requirement 2 for direct materials and plant-leasing costs. Assume the implied cost-behavior patterns persist. 4. As a management consultant, explain concisely to the company president why the unit cost for direct materials did not change in requirements 2 and 3 but the unit cost for plant- leasing costs did change. Note: for Part 1, ignore the V and F classification. Balraj Kistow zm C 1 O D ENG 18:11 E 18/11/2024

GRFN6215 & BUADG002 Online Classroom 09:05 Question 1 Foxwood Company is a metal and woodcutting manufacturer, selling products to tome construction market. Consider the following data for 2017: Sandpaper Materials-handling costs Lubricants and coolants $2,000 70,000 5.000 Miscellaneous indirect manufacturing labor Direct manufacturing labor 300,000 Direct materials inventory, Jan 1, 2017 Direct materials inventory, Dec. 31, 2017 Finishad-goods inventory, Jan. 1, 2017 Finished goods inventory, Dec. 21, 2017 Work-in-process inventory, Jan. 1, 2017 40,000 50,000 100,000 150,000 35,000 4.000 2,000 10,000 Work-in-process inventory, Dec. 31, 2017 14,000 Plane-leasing costs 54,000 Depreciation-plant equipment Property taxes on plant equipment Fire insurance on plant equipment Direct materials purchased 460,000 Revenues 1,360,000 Marketing promotions Marketing salaries 100,000 Distribution costs 70,000 Customer-service cost 00 1. Prepare an income statement with a separate supporting schedule of cost of goods manu- factured. For all manufacturing items, classify costs as direct costs or indirect costs and indicate by V or F whether each is a variable cost or a fixed cost (when the cost object is a product unit). If in doubt, decide on the basis of whether the total cost will change sub- stantially over a wide range of units produced. 2. Suppose that both the direct material costs and the plant-leasing costs are for the produc tion of 900,000 units. What is the direct material cost of each unit produced? What is the plant-leasing cost per unit? Assume that the plant-leasing cost is a fixed cost. 3. Suppose Foxwood Company manufactures 1,000,000 units next year. Repeat the compu- tation in requirement 2 for direct materials and plant-leasing costs. Assume the implied cost-behavior patterns persist. 4. As a management consultant, explain concisely to the company president why the unit cost for direct materials did not change in requirements 2 and 3 but the unit cost for plant- leasing costs did change. Note: for Part 1, ignore the V and F classification. Balraj Kistow zm C 1 O D ENG 18:11 E 18/11/2024

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter11: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 11.2E: Identify cost graphs The following cost graphs illustrate various types of cost behavior: For each...

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