Manta Ray Company manufactures diving masks with a variable cost of $28. The masks sell for $37. Budgeted fixed manufacturingoverhead for the most recent year was $841,500. Actual production was equal to planned production.Required:State whether operating income is higher under variable or absorption costing and the amount of the difference in reported operatingincome under the two methods. Treat each condition as an independent case. (Do not round intermediate calculations.)1. ProductionSales2. ProductionSales3. ProductionSales112,200 units109,300 units99,000 units104,900 units80,600 units80,600 unitsIncome Higher Under(Method)1. Absorption costing2. Variable costingAmount ofDifference3. Same under both2$

The absorption costing method includes variable costs as well as fixed costs. Whereas, variable…

Answered: Manta Ray Company manufactures diving…

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

Facts and circumstances: A company produces three different products on several identical machines. The annual capacity is restricted to 12,000 machine hours. The controller has prepared the following overview. Please help her to find out the product mix with the maximum contribution possible using the form below: Required: Which quantities of X, Y and Z should be produced and what would be the maximum contribution? Components Sales price Variable costs Allocated fixed costs Total cost Machine hours per unit Estimated sales demand (units) X 90 40 30 70 3 2,50 0 Y Z Control 80 70 20 40 30 30 50 70 2.5 1,00 0 2 2,50 0
Current Attempt in Progress In Robert's manufacturing plant, the estimated monthly overhead cost function is provided in the Y = m(X) + b format: Total monthly overhead costs = $1.15(number of machine hours) + $6,500. Given this cost function, specify (a) the variable cost, (b) the fixed cost, (c) the cost driver, and (d) whether these monthly overhead costs are considered variable, fixed, or mixed in total. (Round variable cost to 2 decimal places, e.g. 15.25.) Variable cost Fixed cost Cost driver Cost type $ $
Domestic
Spock Company incurs the following costs to produce and sell a single product. Variable costs per unit: Direct materials. $9 $10 Direct labor.. Variable manufacturing overhead.. Variable selling and administrative expenses.. Fixed costs per year: Fixed manufacturing overhead... Fixed selling and administrative expenses. $5 $3 $150,000 $40,000 Is the company using absorption costing or variable costing to cost units in the Finished Goods inventory account? Show computations to support your answer.
Cost Behavior SmokeCity, Inc., manufactures barbeque smokers. Based on past experience, SmokeCity has found that its total annual overhead costs can be represented by the following formula: Overhead cost = $539,780 + $1.32X, where X equals number of smokers. Last year, SmokeCity produced 19,700 smokers. Actual overhead costs for the year were as expected. Required: 1. What is the driver for the overhead activity? For questions 2-4, Enter the final answers rounded to the nearest dollar. 2. What is the total overhead cost incurred by SmokeCity last year? 3. What is the total fixed overhead cost incurred by SmokeCity last year? 4. What is the total variable overhead cost incurred by SmokeCity last year?
Required information [The following information applies to the questions displayed below.] Martinez Company's relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense Total variable cost 2 5. If 8,000 units are produced and sold, what is the total amount of variable costs related to the units produced and sold? (Do not round intermediate calculations.) W S X H # 3 E D C $ 4 - 2023-01...0.40 PM 2023-01...2.52 PM 2022-12...6.4. - 9 M AO < K -0 ) O O V H I' P A command
Gelb Company currently makes a key part for its main product. Making this part incurs per unit variable costs of $1.80 for direct materials and $1.35 for direct labor. Incremental overhead to make this part is $1.64 per unit. The company can buy the part for $5.06 per unit. (a) Prepare a make or buy analysis of costs for this part. (Enter your answers rounded to 2 decimal places.) (b) Should Gelb make or buy the part? (a) Make or Buy Analysis Direct materials Direct labor Overhead Cost to buy Cost per unit Cost difference (b) Company should: Make Buy
Required information [The following information applies to the questions displayed below.] Martinez Company's relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: @ 2 6. If 12,500 units are produced and sold, what is the total amount of variable costs related to the units produced and sold? (Do not round intermediate calculations.) Direct materials Direct labor S Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense Total variable cost W 00 Xx # 3 E D C $ 4 R FL 1 1 ( 2023-01...0.40 PM 2023-01...2.52 PM 2022-12 9 M A ^ K O 0 J € Ch P
Mussatto Corporation produces snowboards. The following per unit cost information is available: direct materials $12, direct labor $4, variable manufacturing overhead $9, fixed manufacturing overhead $10, variable selling and administrative expenses $5, and fixed selling and administrative expenses $12. Using a 45% markup percentage on total per unit cost, compute the target selling price. (Round answer to 2 decimal places, e.g. 10.50.) Target selling price $
Therapeutic Systems sells its products for $23 per unit. It has the following costs Rent Factory labor Executives under contract Raw material $ 195,000 $9.00 per unit $365,500 $ 2.20 per unit Separate the expenses between fixed and variable costs per unit. Using this information and the sales price per unit of $23, compute the break-even point. Note: Do not round intermediate calculations. Break-even point hits
SmokeCity, Inc., manufactures barbeque smokers. Based on past experience, SmokeCity has found that its total annual overhead costs can be represented by the following formula: Overhead cost = $520,475 + $1.49X, where X equals number of smokers. Last year, SmokeCity produced 19,100 smokers. Actual overhead costs for the year were as expected. Required: 1. What is the driver for the overhead activity? For questions 2-4, Enter the final answers rounded to the nearest dollar. 2. What is the total overhead cost incurred by SmokeCity last year? $fill in the blank 2 3. What is the total fixed overhead cost incurred by SmokeCity last year? $fill in the blank 3 4. What is the total variable overhead cost incurred by SmokeCity last year? $fill in the blank 4 For questions 5-7, round your answers to the nearest cent. Use those rounded figures in subsequent computations, if necessary. 5. What is the overhead cost per unit produced? $fill in the blank 5 per unit 6. What is the fixed overhead cost…
Tashiro Inc. has decided to use the high-low method to estimate the total cost and the fixed and variable cost components of the total cost. The data for various levels of production are as follows: Units Produced Total Costs 7,095 $252,840 2,795 162,540 4,350 186,920 a. Determine the variable cost per unit and the total fixed cost. Variable cost (Round to two decimal places.) $fill in the blank 1 per unit Total fixed cost $fill in the blank 2 b. Based on part (a), estimate the total cost for 3,560 units of production. Total cost for 3,560 units: $fill in the blank 3

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS