Monex reported $65,000 of net income for the year by using absorption costing. The company had no beginning inventory, planned and actual production of 20,000 units, and sales of 18,000 units. Variable manufacturing costs were $20 per unit, and the total budgeted fixed manufacturing overhead was $100,000. Net income under variable costing would be: A. $15,000 B. $55,000 C. $65,000 D. $75,000 E. $115,000

Monex reported $65,000 of net income for the year by using absorption costing. The company had no beginning inventory, planned and actual production of 20,000 units, and sales of 18,000 units. Variable manufacturing costs were $20 per unit, and the total budgeted fixed manufacturing overhead was $100,000. Net income under variable costing would be: A. $15,000 B. $55,000 C. $65,000 D. $75,000 E. $115,000

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 24E: Last year, Orsen Company produced 25,000 juicers and sold 26,500 juicers for 60 each. The actual...

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Last year, Orsen Company produced 25,000 juicers and sold 26,500 juicers for 60 each. The actual variable unit cost is as follows: Fixed overhead was 320,000. Fixed selling expenses consisted of advertising copayments totaling 110,000. Fixed administrative expenses were 236,000. There were no beginning and ending work-in-process inventories. Beginning finished goods inventory was 148,000 for 4,000 juicers. The value of ending inventory reported on the financial statements was Refer to the information in 2.24. The gross margin percentage for last year was a. 12.57% b. 55.67% c. 28.95% d. 38.33%
Evans Company had total sales of 3,000,000 for fiscal 20x5. The costs of quality-related activities are given below. Required: 1. Prepare a quality cost report, classifying costs by category and expressing each category as a percentage of sales. What message does the cost report provide? 2. Prepare a bar graph and pie chart that illustrate each categorys contribution to total quality costs. Comment on the significance of the distribution. 3. What if, five years from now, quality costs are 7.5 percent of sales, with control costs being 65 percent of the total quality costs? What would your conclusion be?
Suppose that a company is spending 60,000 per year for inspecting, 30,000 for purchasing, and 40,000 for reworking products. A good estimate of nonvalue-added costs would be a. 70,000. b. 130,000. c. 40,000. d. 90,000. e. 100,000.
Ellerson Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 278,000, direct labor cost was 189,000, and overhead cost was 523,000. During the year, 100,000 units were completed. Refer to Exercise 2.21. Last calendar year, Ellerson recognized revenue of 1,312,000 and had selling and administrative expenses of 204,600. Required: 1. What is the cost of goods sold for last year? 2. Prepare an income statement for Ellerson for last year.
Nabors Company had actual quality costs for the year ended June 30, 20x5, as given below. At the zero-defect state, Nabors expects to spend 375,000 on quality engineering, 75,000 on vendor certification, and 50,000 on packaging inspection. Assume sales to be 25,000,000. Required: 1. Prepare a long-range performance report for 20x5. What does this report tell the management of Nabors? 2. Explain why quality costs still are present for the zero-defect state. 3. What if Nabors achieves the zero-defect state reflected in the report? What are some of the implications of this achievement?
Monex reported $65,000 of net income for the year by using absorption costing. The company had no beginning inventory, planned and actual production of 20,000 units, and sales of 18,000 units. Variable manufacturing costs were $20 per unit, and the total budgeted fixed manufacturing overhead was $100,000. Net income under variable costing would be: A. $15,000 B. $55,000 C. $65,000 D. $75,000 E. $115,000
Smith, which began business at the start of the current year, had the following data: Planned and actual production: 40,000 units Sales: 37,000 units at $15 per unit Production costs: Variable: $4 per unit Fixed: $260,000 Selling and administrative costs: Variable: $1 per unit Fixed: $32,000 The gross margin that the company would disclose on an absorption- costing income statement is: A. $97,500. B. $147,000. C. $166,500. D. $370,000. E. some other amount.
BRISTLEBACK CORP. reported P70,000 of operating income for the year by using absorption costing. The company had no beginning inventory, planned production is 10,000 units while actual production of 8,000 units, and sales of 5,500 units. Standard variable manufacturing costs were P15 per unit, and total budgeted fixed manufacturing overhead was P40,000. All actual costs are equal to their budgeted costs, net income under variable costing would 56. be P60,000 P52,000 P49,500 а. C. b. P57,500 d.
For the current year, Power Cords Corp. expected to sell 40,700 industrial power cords. Fixed costs were expected to total $1,643,500; unit sales price was expected to be $3,650; and unit variable costs were budgeted at $2,100. Power Cord Corp.'s margin of safety (MOS) in sales dollars is: (Do not round intermediate calculations.
During the current year, Mute Corporation expected to sell 24,600 telephone switches. Fixed costs for the year were expected to be $12,147,000, the unit sales price was budgeted at $3,500, and unit variable costs were budgeted at $1,680. Mute's margin of safety (MOS) in units is Multiple Choice O O 17,925. 21,705. 23,015. 19,095. 17,795.
Kirchoff, Inc., manufactures a product with the following costs: Direct materials Per Unit Per Year P18.00 Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable SG&A expenses P11.90 P2.10 P1,422,000 P3.60 Fixed SG&A expenses The pricing calculations are based on budgeted production and sales P1,540,500
Sepgu Unlimited expects to produce 150,000 units of Product B during the year. The sales demand is expected to be 140,000 units. The following data were provided for pricing computations: Standard cost per unit: Direct Material P8.20 Direct labor 4.50 Variable factory overhead 2.30 Fixed factory overhead 2.00 Total standard product cost P17.00 Variable selling and administrative expenses P2.50 Budgeted annual fixed selling & administrative expenses P200,000 Total capital employed 800,000 Expected rate of return on investment 30% REQUIRED: Compute the expected selling price. Compute the expected selling price if…