Pane Inc. manufactures hair brushes that sell at wholesale for $2.60 per unit. Budgeted production in both 2015 and 2016 was 2,500 units. There was no beginning inventory in 2015. The following data summarized the 2015 and 2016 operations: Year Units sold Units produced Sales price per unit 2015 2016 2,500 3,000 3,000 2,500 $2.60 $2.60 Costs: Direct materials per unit $ 0.10 $ 0.10 Direct labor per unit $ 0.20 $ 0.20 Variable factory overhead per unit $ 0.40 $ 0.40 Fixed factory overhead $ 1,200.00 $ 1,200.00 Variable selling per unit sold $ 0.90 $ 0.90 Fixed administrative $ 650.00 $ 650.00 Compute: 1. Absorption costing operating income for 2015. 2. Variable costing operating income for 2015.

Pane Inc. manufactures hair brushes that sell at wholesale for $2.60 per unit. Budgeted production in both 2015 and 2016 was 2,500 units. There was no beginning inventory in 2015. The following data summarized the 2015 and 2016 operations: Year Units sold Units produced Sales price per unit 2015 2016 2,500 3,000 3,000 2,500 $2.60 $2.60 Costs: Direct materials per unit $ 0.10 $ 0.10 Direct labor per unit $ 0.20 $ 0.20 Variable factory overhead per unit $ 0.40 $ 0.40 Fixed factory overhead $ 1,200.00 $ 1,200.00 Variable selling per unit sold $ 0.90 $ 0.90 Fixed administrative $ 650.00 $ 650.00 Compute: 1. Absorption costing operating income for 2015. 2. Variable costing operating income for 2015.

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter7: The Master Budget And Flexible Budgeting

Section: Chapter Questions

Problem 5E: Prepare a cost of goods sold budget for MacLaren Manufacturing Inc. for the year ended December 31,...

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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.
The Sales Department of Minimus Inc. has forecast sales for May 2016 to be 40,000 units. Additional information follows: Materials used in production: Direct labor hours required in production: Prepare the following: a. A production budget for May. b. A direct materials budget for May. c. A direct labor budget for May.
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Prepare a cost of goods sold budget for the Crest Hills Manufacturing Co. for the year ended December 31, 2016, from the following estimates. Inventories of production units: Direct materials purchased during the year, 854,000; beginning inventory of direct materials, 31,000; and ending inventory of direct materials, 26,000. Totals from other budgets included:
Salisbury Bottle Company manufactures plastic two-liter bottles for the beverage industry. The cost standards per 100 two-liter bottles are as follows: At the beginning of March, Salisburys management planned to produce 500,000 bottles. The actual number of bottles produced for March was 525,000 bottles. The actual costs for March of the current year were as follows: a. Prepare the March manufacturing standard cost budget (direct labor, direct materials, and factory overhead) for Salisbury, assuming planned production. b. Prepare a budget performance report for manufacturing costs, showing the total cost variances for direct materials, direct labor, and factory overhead for March. c. Interpret the budget performance report.
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