Leno Company manufactures toasters. For the first 8 months of 2020, the company reported the following operating results while operating at 75% of plant capacity: Sales revenue (350,000 units) $4,375,000 Cost of goods sold 2,600,000 Gross profit $1,775,000 Operating expense 840,000 Net income $ 935,000 Cost of goods sold was 70% variable and 30% fixed; operating expenses were 75% variable and 25% fixed. In September, Leno company receives a special order for 15,000 toasters at $7.60 each from Centro Company of Ciudad Juarz. Acceptance of the order would result in an additional $3,000 of shipping costs but no increase in fixed operating expenses. Instructions (a) Prepare an incremental analysis for the special order. (b) Should Leno company accept the special order? Why or why not?

Leno Company manufactures toasters. For the first 8 months of 2020, the company reported the following operating results while operating at 75% of plant capacity: Sales revenue (350,000 units) $4,375,000 Cost of goods sold 2,600,000 Gross profit $1,775,000 Operating expense 840,000 Net income $ 935,000 Cost of goods sold was 70% variable and 30% fixed; operating expenses were 75% variable and 25% fixed. In September, Leno company receives a special order for 15,000 toasters at $7.60 each from Centro Company of Ciudad Juarz. Acceptance of the order would result in an additional $3,000 of shipping costs but no increase in fixed operating expenses. Instructions (a) Prepare an incremental analysis for the special order. (b) Should Leno company accept the special order? Why or why not?

Name: Question 1Leno Company manufactures toasters. For the first 8 months
Uploaded: 2024-03-20T06:33:06.000Z
Channel: Bartleby
Description: Question 1Leno Company manufactures toasters. For the first 8 months of 2020, the companyreported the following operating results while operating at 75% of plant capacity:Sales revenue (350,000 units)$4,375,000Cost of goods sold2,600,000Gross profit

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Quality Company Limited is a leading producer of Trust-Me Bottled Water in Ghana. During the month of December, 2020, the following figures were extracted from their records. Selling price Direct material Direct labour Factory overhead (60% fixed) Selling and Distribution Cost (30% variable) Administrative cost (80% fixed) Opening Stock Units sold Units produced GHS 65.00 16.00 12.00 30,000.00 50,000.00 30,000.00 7,600.00 4000 bottles 5000 bottles You are required to prepare income statement for Quality Company Limited for the month of December, 2020 using absorption costing and marginal costing approaches With relevant examples, explain the following Primary appointment and secondary apportionment Direct cost and indirect cost
Cullumber Corporation has collected the following information after its first year of sales. Sales were $1,440,000 on 120,000 units, selling expenses $210,000 (40% variable and 60% fixed), direct materials $504,000, direct labor $169,400, administrative expenses $276,000 (20% variable and 80% fixed), and manufacturing overhead $382.000 ( 70% variable and 30% fixed). Top management has asked you to do a CVP analysis so that it can make plans for the coming year. It has projected that unit sales will increase by 10% next year. (a) Compute (1) the contribution margin for the current year and the projected year, and (2) the fixed costs for the current year. (Assume that fixed costs will remain the same in the projected year.) (1) (2) Contribution margin for current year Contribution margin for projected year Fixed Costs $ I $
Meow Foods had 2,000 25-pound bags of cat food in beginning inventory. During 2020, the company manufactured 16,000 bags and sold 15,000 units. Assume the same unit costs in all years. Each bag of food is sold for $17. The company experienced the following costs: Direct materials $5.00 per unit Direct labor $2.10 per unit Variable manufacturing overhead $1.90 per unit Variable selling $1.00 per unit Fixed manufacturing overhead $48,000 Fixed selling $24,000 Fixed administrative $30,000 If the company uses variable costing, how much will be reported as inventory on the December 31, 2020, balance sheet? $27,000 $30,000 $28,500 $34,500
The Casket Division of Saal Corporation had average operating assets of $1,020,000 and net operating income of $205,200 in January. The company uses residual income to evaluate the performance of its divisions, with a minimum required rate of return of 14%. Required: What was the Casket Division's residual income in January?
Astro Company sold 22,000 units of its only product and reported income of $70,200 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 46% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $154,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($54 per unit) Variable costs ($48 per unit) Contribution margin Fixed costs Income Sales level required in dollars Numerator: 3. Compute the sales level required in both dollars and units to earn $240,000 of target income for next year with the machine installed. (Do not round intermediate calculations. Round your answers to 2 decimal places. Round "Contribution margin ratio" to nearest whole percentage) Sales level required in units Numerator: $ 1,188,000 1,056,000 1…
On January 1 of the current year, Townsend Co. commenced operations. It operated its plant at 100% of capacity during January. The following data summarized the results for January: Units Production 50,000 Sales ($18 per unit) (42,000) Inventory, January 31 8,000 Manufacturing costs: Variable $575,000 Fixed 80,000 Total $655,000 Selling and administrative expenses: Variable $35,000 Fixed 10,500 Total $45,500 a. Prepare an income statement using absorption costing. Townsend Co. Absorption Costing Income Statement For the Month Ended January 31 Next
Joson Incorporated produces and sells two products. Data concerning those products for the most recent month appear below: Product A Product B Sales $ 30,000 $ 35,000 Variable expenses $ 11,800 $ 26,550 The fixed expenses of the entire company were $39,160. The break-even point for the entire company is closest to:
Throughout the financial year Dom Company incurs costs unevenly. On February 28, 2018, advertising costs of P200,000 were incurred and staff bonuses are paid at the year-end based on sales. Staff bonuses are expected to be around P3,000,000 for the year, based on sales of P30,000,000. Total sales for the quarter ending March 31, 2018 were P7,000,000. For the quarter ended March 31, 2018 how much advertising costs and staff bonuses should be included?
During December of the current year, Parker Company purchased $3,500,000 raw materials. During the month, Parker incurred $2,040,000 direct labor cost and applied 80% of direct labor cost. During the same month, there were changes in inventories as follows: Increase in raw materials $100,000; Decrease in work in process $150,000 and decrease in finished goods $75,000. If the goods available for sale is $7,500,000, what is the value of finished goods at December 31? $203,000 $578,000 $78,000 $75,000
Super Bike Manufacturing Company presents the following data for year 2022: Opening inventory: 0 Units Sales: 8,000 Units Production: 10,000 Units • Closing inventory: 2,000 Units Direct materials: $240 • Direct labor: $280 • Variable manufacturing overhead expenses: $100 • Variable selling and administrative expenses: $40 • Fixed manufacturing overhead expenses: $1200,000 • Fixed selling and administrative expenses: $800,000 Required: Using the data given above, compute the unit product cost of one bike under: 1. absorption costing system. 2. variable costing system.
Samy Inc. operated at its normal capacity during the current year, producing 75,000 units of its single product. Sales totalled 65,000 units at an average price of $20 per unit. Variable cost of goods sold amounted to $7 per unit, and sales commissions were paid out at $5 per unit sold. Fixed product costs, incurred uniformly throughout the year, amounted to $203,000 and fixed period costs, incurred uniformly, amounted to $33,000 per quarter. Required: 1. Compute Samy's break-even point in sales dollars for the current year. (Do not round intermediate calculations. Round your answer to the nearest whole number.) × Answer is complete but not entirely correct. Break-even point in sales in dollars $ 837,500 x 2. If Samy's fixed product costs unexpectedly increase by 15%, what is the new unit selling price that would yield the same break-even sales as before the cost increase? (Do not round intermediate calculations and round your answer to 2 decimal places.) Answer is complete and…
Astro Company sold 23,000 units of its only product and reported income of $264, 600 for the current year. During a planning session for next year's activities, the production manager notes that variable costs can be reduced 44% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $156,000. Total units sold and the selling price per unit will not change. ASTRO COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales ($56 per unit) $ 1, 288,000 Variable costs ($35 per unit ) 805, 000 Contribution margin 483,000 Fixed costs 218,400 Income $ 264,600 Problem 18 - 3A (Algo) Part 1 1. Compute the break - even point in dollar sales for next year assuming the machine is installed. (Round your answers to 2 decimal places.)