Orchid's Olive Oil began business in 2015, during which 107,000 quarts of olive oil were produced. In 2015, the company sold 103,000 quarts of olive oil. Costs incurred during the year were as follows: Ingredients used Direct labor Variable overhead Fixed overhead Variable selling expenses $235,500 $110,500 $204,100 $105,300 $55,500 Fixed selling and administrative expenses $25,000 Total actual costs $735,900 a. What was the actual production cost per quart under variable costing? Under absorption costing? b. What was the variable cost of goods sold for 2015 under variable costing?

Orchid's Olive Oil began business in 2015, during which 107,000 quarts of olive oil were produced. In 2015, the company sold 103,000 quarts of olive oil. Costs incurred during the year were as follows: Ingredients used Direct labor Variable overhead Fixed overhead Variable selling expenses $235,500 $110,500 $204,100 $105,300 $55,500 Fixed selling and administrative expenses $25,000 Total actual costs $735,900 a. What was the actual production cost per quart under variable costing? Under absorption costing? b. What was the variable cost of goods sold for 2015 under variable costing?

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 22E: Ellerson Company provided the following information for the last calendar year: During the year,...

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Brody Company makes industrial cleaning solvents. Various chemicals, detergent, and water are mixed together and then bottled in 10-gallon drums. Brody provided the following information for last year: Last year, Brody completed 100,000 units. Sales revenue equaled 1,200,000, and Brody paid a sales commission of 5 percent of sales. Required: 1. Calculate the direct materials used in production for last year. 2. Calculate total prime cost. 3. Calculate total conversion cost. 4. Prepare a cost of goods manufactured statement for last year. Calculate the unit product cost. 5. Prepare a cost of goods sold statement for last year. 6. Prepare an income statement for last year. Show the percentage of sales that each line item represents.
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 = 543,000 + 1.34X, where X equals number of smokers. Last year, SmokeCity produced 20,000 smokers. Actual overhead costs for the year were as expected. Required: 1. What is the driver for the overhead activity? 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? 5. What is the overhead cost per unit produced? 6. What is the fixed overhead cost per unit? 7. What is the variable overhead cost per unit? 8. Recalculate Requirements 5, 6, and 7 for the following levels of production: (a) 19,500 units and (b) 21,600 units. (Round your answers to the nearest cent.) Explain this outcome.
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. Required: 1. Calculate the total cost of direct materials used in production. 2. Calculate the cost of goods manufactured. Calculate the unit manufacturing cost. 3. Of the unit manufacturing cost calculated in Requirement 2, 2.70 is direct materials and 5.30 is overhead. What is the prime cost per unit? Conversion cost per unit?
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