Produced Sold Year ended December 31, Year 1 50,000 40,000 Year ended December 31, Year 2 50,000 55,000 Production costs per unit have not changed over the two-year period. Under variable costing, what is the amount of cost of sales relative to the cost of sales shown on the GAAP income statement of the company? Year 1 Year 2 a. Higher b. Higher c. Lower Higher Lower Higher d. Lower Lower
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King Tooling has produced and sold the following number of units of their only product during their first two years in business:
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- On April 1, 2016, Mandy's Auto has $542,194 in partially completed cars and trucks in their inventory. During the month of April, they incur the following costs: $167,588 to finish the vehicles • $1,274,639 to complete another 75 vehicles • $388,642 to start 40 more vehicles. Write the equation to calculate the cost of goods manufactured for the month of April and then calculate the cost of goods manufactured for that month? Answer:Sunland Corporation manufactures a single product. Monthly production costs incurred in the manufacturing process are shown below for the production of 3,700 units. The utilities and maintenance costs are mixed costs. The fixed portions of these costs are $329 and $220, respectively. Production in Units 3,700 Production Costs Direct materials $8,235 Direct labor 23,084 Utilities 3,104 Property taxes 1,098 Indirect labor 4,941 Supervisory salaries 2,086 Maintenance 1,885 Depreciation 2,635 (A) Identify the above costs as variable, fixed, or mixed. Costs Direct materials FixedMixedVariable Direct labor FixedMixedVariable Utilities FixedMixedVariable Property taxes…Harris Company manufactures and sells a single product. A partially completed schedule of the company's total costs and costs per unit over the relevant range of 58,000 to 98,000 units is given below: Required: 1. Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. 2. Assume the company produces and sells 88,000 units during the year at a selling price of $9.74 per unit. Prepare a contribution format income statement for the year. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. Note: Round the per unit variable cost and fixed cost to 2 decimal places. Units Produced and Sold 58,000 78,000 98,000 Total cost: Variable cost $ 179,800 Fixed cost 440,000 Total cost $ 619,800 Cost per unit: Variable cost Fixed cost Total cost nor unit
- Custom Creations Furniture Company manufactures furniture at its Akron, Ohio, factory. Some of its costs from the past year include: Depreciation on sales office $ 9,800 Depreciation on factory equipment 16,700. Factory supervisor salary Sales commissions Lubricants used in factory equipment Insurance costs for factory Wages paid to maintenance workers Fabric used to upholster furniture Freight-in (on raw materials) Costs of delivery to customers Wages paid to assembly-line workers Lumber used to build product 50,200 23,400 3,800 21,400 115,600 10,900 3,200 9,200 A. $261,800. OB. $131,700. OC. $236,600. D. $325,100. 115,100 82,100 54,100 26,900 Utilities in factory Utilities in sales office Manufacturing overhead costs for Custom Creations Furniture Company totaledMcNeil, inc manufactures and sells guitars. During June, McNeil started and completed the production of 300 guitars. McNeil engaged in the following transaction in june: A) Paid $68,000 for materials that were used to make guitars in June. B) Paid $94,000 wages to production workers C) Recorded $34,000 of depreciation on factory equipment D) Sold 260 guitars on account in June for $900 each. Mcneil recorded the cost of goods sold at the time of sale. Required: record the above transactions using the horizontal financial statements model. Be sure to identify the specific accounts affected by the transaction.Ester Limited produces two products X and Y by producing a common raw material in a common production process. The production for the month of April was 8000 units of X and 6000 units of Y. Whereas sales were 7000 units and 4000 units of X and Y respectively. Following are the other details. Selling price per unit at split off point is $25 and $20 of X and Y respectively Selling price per unit after further processing is $60 for X and $80 for Y Other expenses are as follows: Further processing expense of X and Y is $29 and $38 respectively Total Joint cost for the month is $80,000 Allocate Joint cost on the basis of: (a) Market Value Split off method (b) Net realizable value method
- Montrose Instrumentation produces measurement equipment. One component, used in a variety of the company's products, is critical and the supply chain often breaks. For that reason, Montrose has a policy to hold in inventory enough of the component to produce three month's worth of sales (one component is used in each unit of product in which it is used). On February 1, the company has 40,000 components in stock. Sales of the units in which the component is used in each of the next six months are estimated to be as follows: February March April May June July 34,750 28,750 30,250 35,800 32,400 44,360 Parts are purchased at a wholesale price of $55. The vendor has a financing arrangement by which Montrose pays 40 percent of the purchase price in the month when the components are delivered and 60 percent in the following month. Montrose purchased 42,500 parts in January. Required: a. Estimate purchases of the component (in units) for February and March. b. Estimate the cash disbursements…O’Brien Company manufactures and sells one product. The following information pertains to each of the company’s first three years of operations: During its first year of operations, O’Brien produced 100,000 units and sold 80,000 units. During its second year of operations, it produced 75,000 units and sold 90,000 units. In its third year, O’Brien produced 80,000 units and sold 75,000 units. The selling price of the company’s product is $75 per unit. Required: Assume the company uses absorption costing and a FIFO inventory flow assumption (FIFO means first-in first-out. In other words, it assumes that the oldest units in inventory are sold first): Compute the unit product cost for Year 1, Year 2, and Year 3. Prepare an income statement for Year 1, Year 2, and Year 3. Assume the company uses absorption costing and a LIFO inventory flow assumption (LIFO means last-in, first-out. In other words, it assumes that the newest units in inventory are sold first): Compute the unit…Montrose Instrumentation produces measurement equipment. One component, used in a variety of the company's products, is critical and the supply chain often breaks. For that reason, Montrose has a policy to hold in inventory enough of the component to produce three month's worth of sales (one component is used in each unit of product in which it is used). On February 1, the company has 31,000 components in stock. Sales of the units in which the component is used in each of the next six months are estimated to be as follows: February 32,500 March 26,500 April 28,000 May 33,550 June 30,150 July 42,110 Parts are purchased at a wholesale price of $46. The vendor has a financing arrangement by which Montrose pays 40 percent of the purchase price in the month when the components are delivered and 60 percent in the following month. Montrose purchased 38,000 parts in January. Required: Estimate purchases of the component (in units) for February and March. Estimate the cash…
- During its first year of operations, Forrest Company paid $30,000 for direct materials and $50,000 in wages for production workers. Lease payments, utility costs, and depreciation on factory equipment totaled $15,000. General, selling, and administrative expenses were $20,000. The average cost to produce one unit was $2.50. How many units were produced during the period?Road Warrior Corporation began operations early in the current year, building luxury motor homes. During the year, the company started and completed 50 motor homes at a cost of $60,000 per unit. Of these, 48 were sold for $95,000 each and two remain in finished goods inventory. In addition, the company had six partially completed units in its factory at year-end. Total costs for the year (summarized alphabetically) were as follows: $ 737,000 900,000 Direct materials used Direct labor General and administrative 500,000 expenses Income tax expense Manufacturing overhead Selling expenses 100,000 1,520,000 500,000 Instructions a. Compute the total manufacturing costs charged to work in process for the current year: Total manufacturing costs b. Compute the cost of finished goods manufactured for the current year: Cost of finished goods manufacturedHarris Company manufactures and sells a single product. A partially completed schedule of the company's total costs and costs per unit over the relevant range of 55,000 to 95,000 units is given below: Required: 1. Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. 2. Assume that the company produces and sells 85,000 units during the year at a selling price of $8.90 per unit. Prepare a contribution format income statement for the year. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. (Round the per unit variable cost and fixed cost to 2 decimal places.) Total cost: Variable cost Fixed cost Total cost Cost per unit: Variable cost Fixed cost Total cost per unit 55,000 Units Produced and Sold $ $ $ 75,000 Units Produced and Sold 192,500 330,000 522,500 $ 0.00 $ 95,000 Units Produced and Sold…