Learning Objective 2Product Costs and Product Profitability Reports, using a Single Plantwide Factory Overhead RateIsaac Engines Inc. produces three products-pistons, valves, and cams-for the heavy equipmentindustry. Isaac Engines has a very simple production process and product line and uses a singleplantwide factory overhead rate to allocate overhead to the three products. The factory overheadrate is based on direct labor hours. Information about the three products for 20Y2 is as follows:PistonsValvesCamsBudgetedVolume(Units)6,00013,0001,000PistonsDirect LaborHours Per UnitValvesCamsIf required, round all per unit answers to the nearest cent.a. Determine the plantwide factory overhead rate.$28 ✔per dlh0.300.500.100.3 ✔ dlhThe estimated direct labor rate is $20 per direct labor hour. Beginning and ending inventories arenegligible and are, thus, assumed to be zero. The budgeted factory overhead for Isaac Engines is$235,200.0.5 dlh0.1 ✓dlhPrice PerUnitb. Determine the factory overhead and direct labor cost per unit for each product.Direct LaborFactory OverheadCost Per UnitHours Per Unit$$$4021558.40 ✔14Direct MaterialsPer Unit2.80$$9$$520Direct LaborCost Per Unit6102 ●Learning Objective 2c. Use the information provided to construct a budgeted gross profit report by product line for theyear ended December 31, 20Y2. Include the gross profit as a percent of sales in the last line of yourreport, rounded to one decimal place.RevenuesProduct CostsDirect materialsDirect laborFactory overheadTotal Product CostsIsaac Engines Inc.Product Line Budgeted Gross Profit ReportsFor the Year Ended December 31, 20Y2PistonsValvesGross profit (loss)Gross profit percentage of salesFeedback$$240,000 ✔54,000 ✔36,000✔50,400 ✔99,600 ✔$140,400 ✔ $66 X %$$273,00065,000 ✓✔130,000 ✔182,000377,000-104,000>-38 X %$$Cams55,00020,0002,0002,80024,80030,200<55 X %Check My Workc. Construct your report for each product as: Revenues - Direct Materials - Direct Labor - FactoryOverhead Gross ProfitRevenues Price x Unit VolumeDirect Materials = Direct Material Cost per Unit x Unit VolumeDirect Labor = Direct Labor Cost per Unit from Req. (b) x Unit VolumeFactory Overhead = Factory Overhead Cost per Unit from Req. (b) x Unit VolumeGross Profit Percentage of Sales = Gross Profit + Sales

Gross profit percentage :— It is the ratio between gross profit and net sales. It is calculated by…

Learning Objective 2 c. Use the information provided to construct a budgeted gross profit report by product line for the year ended December 31, 20Y2. Include the gross profit as a percent of sales in the last line of your report, rounded to one decimal place. Revenues Product Costs Direct materials Direct labor Factory overhead Total Product Costs Gross profit (loss) Gross profit percentage of sales Feedback Isaac Engines Inc. Product Line Budgeted Gross Profit Reports For the Year Ended December 31, 20Y2 Pistons Valves Check My Work $ $ $ 240,000 ✔ $ 54,000 36,000 ✔ 50,400 ✔ 140,400 ✔ $ 99,600 ✔ $ 66 X % $ 273,000 65,000 ✔ 130,000 182,000 ✔ 377,000 << -104,000 -38 X % $ $ $ Cams 55,000 20,000 2,000 2,800 24,800 30,200 55 X %

Learning Objective 2 c. Use the information provided to construct a budgeted gross profit report by product line for the year ended December 31, 20Y2. Include the gross profit as a percent of sales in the last line of your report, rounded to one decimal place. Revenues Product Costs Direct materials Direct labor Factory overhead Total Product Costs Gross profit (loss) Gross profit percentage of sales Feedback Isaac Engines Inc. Product Line Budgeted Gross Profit Reports For the Year Ended December 31, 20Y2 Pistons Valves Check My Work $ $ $ 240,000 ✔ $ 54,000 36,000 ✔ 50,400 ✔ 140,400 ✔ $ 99,600 ✔ $ 66 X % $ 273,000 65,000 ✔ 130,000 182,000 ✔ 377,000 << -104,000 -38 X % $ $ $ Cams 55,000 20,000 2,000 2,800 24,800 30,200 55 X %

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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The management of Zigby Manufacturing prepared the following balance sheet for March 31. Assets ZIGBY MANUFACTURING Balance Sheet March 31 Liabilities and Equity Cash Accounts receivable Raw materials inventory Finished goods inventory Equipment Less: Accumulated depreciation $ 1,680,000 420,000 Total assets $ 112,000 964,320 275,800 Liabilities Accounts payable Loan payable 911,512 Long-term note payable Equity 1,260,000 Common stock Retained earnings $ 3,523,632 Total liabilities and equity To prepare a master budget for April, May, and June, management gathers the following information. $ 562,800 12,000 1,400,000 938,000 610,832 $ 1,974,800 1,548,832 $ 3,523,632 a. Sales for March total 57,400 units. Budgeted sales in units follow: April, 57,400; May, 54,600; June, 56,000; and July, 57,400. The product's selling price is $24.00 per unit and its total product cost is $19.85 per unit. b. Raw materials inventory consists solely of direct materials that cost $20 per pound. Company…
Question 3 a) Why do successful companies tend to use the bottom-up approach to establish a master budget? b) Green Tea's data show the following information for the financial year, beginning July 2020: July Aug. Sept. Oct. Nov. Estimated sales (units) 25,000 25,000 27,000 27,500 28,000 Sales price per unit $31 $31 $31 $31 $31 Direct labour per unit $1.75 $1.75 $1.50 $1.50 $1.50 Labour rate per hour $21 $21 $24 $24 $24 New machinery will be added in September. This machine will reduce the labour required per unit and increase the labour rate for those employees qualified to operate the machinery. Finished goods inventory is required to be 20% of the next month's requirements. Direct material requires 2.5 kg per unit at a cost of $5 per kg. The ending inventory required for direct materials is 20% of the next month's needs. In July, the beginning inventory is 3,750 units of finished goods and 13,125 kg of materials. Required: i) Prepare a production budget for the first quarter of the…
Profit Center Responsibility Reporting Championship Sports Inc. operates two divisions-the Winter Sports Division and the Summer Sports Division. The following income and expense accounts were provided from the trial balance as of December 31, 20Y9, the end of the fiscal year, after all adjustments, including those for inventories, were recorded and posted: Sales-Winter Sports Division Sales-Summer Sports Division Cost of Goods Sold-Winter Sports Division Cost of Goods Sold-Summer Sports Division Sales Expense-Winter Sports Division Sales Expense-Summer Sports Division Administrative Expense-Winter Sports Division Administrative Expense-Summer Sports Division Advertising Expense Transportation Expense $28,350,000 31,320,000 17,010,000 18,090,000 4,860,000 4,320,000 2,835,000 2,781,000 990,000 524,800 252,000 2,700,000 Accounts Receivable Collection Expense Warehouse Expense The bases to be used in allocating expenses, together with other information, are as follows: a. Advertising…
S18-13 Preparing journal entry Learning Objective 5 The Mixing Department's production cost report for May shows $12,500 in total costs, of which $2,500 will remain in the department assigned to the units still in process at the end of the month. Prepare the journal entry to record the transfer of costs from the Mixing Department to the Packaging Department.
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1 - Merchandising companies prepare the production budget after preparing the sales budget. 2 - Budget preparation is best determined in a top-down managerial approach A. Statement 1 is True Statement 2 is True B. Statement 1 is True Statement 2 is False C. Statement 1 is False Statement 2 is True D. Statement 1 is False Statement 2 is False
Please answer parts 7, 8, and 9.
BUS 203: INTRODUCTION TO COST AND MANAGEMENT ACCOUNTING PROJECT: CASH BUDGETING ASSOCIATE DEGREE YEAR 2: SEMESTER 1 (2020/21)Ronstadt Limited’s budget for the four months from January to April includes the following data:1. MonthSalesMaterialsWagesOverheads $000$000$000$000January615115.030360February636120.033390March690135.036420April684130.040425 2. One-third of sales revenue is received one month after sale and the remainder is received two months after sale. The sales in the previous two months were: November $600 000; December $540 000.3. One-quarter of purchases of materials are paid for in the month of purchase. The remainder are paid for two months later. Purchases in the previous two months were: November $108 000; December $106 000.4. Two-thirds of the wages are paid in the month in which they are earned, and the balance is paid in the following month. The wages for the previous December amounted to $30 000.5. One-half of the overhead expenditure is paid in the month in…
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