Pteri Manufacturing makes a single product - the Pteri. Information for 2005 appears below:Sales in units: 200,000Production in units: 250,000Beginning inventory: 0Variable production cost per unit: $1.00Variable selling cost per unit: $0.30Fixed production cost per year: $100,000Fixed Selling and administrative cost per year: $50,000Selling price per unit $3.00What is the cost per unit of inventory using variable costing?

Step 1: Understand Variable Costing :Under variable costing, only variable production costs are…

Answered: Pteri Manufacturing makes a single…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter3: Cost Behavior

Section: Chapter Questions

Problem 26E: Starling Co. manufactures one product with a selling price of 18 and variable cost of 12. Starlings...

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Klamath Company produces a single product. The projected income statement for the coming year is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. 2. Suppose 10,000 units are sold above break-even. What is the operating income? 3. Compute the contribution margin ratio. Use the contribution margin ratio to compute the break-even point in sales revenue. (Note: Round the contribution margin ratio to four decimal places, and round the sales revenue to the nearest dollar.) Suppose that revenues are 200,000 more than expected for the coming year. What would the total operating income be?
1. Scent Fragrance Company manufactures and sells several ranges of perfumes. The Average revenue and cost of sales are as follows: Selling price per unit $20.00 Variable costs per unit: Direct materials $4.00 Direct manufacturing labor $1.60 Manufacturing overhead $0.40 Selling costs $2.00 Annual fixed costs $96,000 a) Calculate the contribution margin per unit. b) Calculate the number of units Scent Fragrance Company must sell each year to break even. c) Calculate the number of units Scent Fragrance Company must sell to yield a profit of $144,000.
Rongon Company manufactures twotypes of product. Selected information is given below:FantasyJoySelling price per unit$25$150Variable expenses per unit$15$35Number of units sold annually20,0005,000Fixed expenses total $480,800 per year. Required: i.Assuming the sales mix given above, do the following: a. Prepare a contribution format income statement showing both dollar and percent columns for each product and for the company as a whole. b. Compute the break-even point in dollars for the company as awhole and the margin of safety in both dollars and percent.ii.The company has developed a new product to be called Delight. Assume that the company could sell 10,000 units at $65each. The variable expenses would be $58each. The company’s fixed expenses would not change. a. Prepare another contribution format income statement, including sales of the Samoan Delight (sales of the other two products would not change). b. Compute the company’s new break-even point in dollars and the new margin…
Trez Company began operations this year. During this year, the company produced 100,000 units and sold 80,000 units. The absorption costing income statement for this year follows. Income Statement (Absorption Costing) Sales (80,000 units x $40 per unit) Cost of goods sold Gross profit Selling and administrative expenses Income Additional Information a. Selling and administrative expenses consist of $400,000 in annual fixed expenses and $2.25 per unit in variable selling and administrative expenses. b. The company's product cost of $20 per unit consists of the following. Direct materials Direct labor Variable overhead Fixed overhead ($600,000 / 100,000 units) $3,200,000 1,600,000 1,600,000 580,000 $1,020,000 TREZ Company Income Statement (Variable Costing) $ 4 per unit $6 per unit $ 4 per unit $ 6 per unit Required: Prepare an income statement for the company under variable costing.
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Trez Company began operations this year. During this year, the company produced 100,000 units and sold 80,000 units. The absorption costing income statement for this year follows. Income Statement (Absorption Costing) Sales (80,000 units x $40 per unit) Cost of goods sold Gross profit Selling and administrative expenses Income Additional Information a. Selling and administrative expenses consist of $400,000 in annual fixed expenses and $2 per unit in variable selling and administrative expenses. b. The company's product cost of $20 per unit consists of the following. Direct materials Direct labor Variable overhead Fixed overhead ($700,000 / 100,000 units) Required: Prepare an income statement for the company under variable costing. Sales Less: Variable expenses Variable selling and administrative expenses Variable cost of goods sold Contribution margin Less: Fixed expenses TREZ Company Income Statement (Variable Costing) $ 3,200,000 1,600,000 1,600,000 560,000 $ 1,040,000 Fixed…
Scent Fragrance Company manufactures and sells several ranges of perfumes. The Average revenue and cost of sales are as follows: Selling price per unit $20.00 Variable costs per unit: Direct materials $4.00 Direct manufacturing labor $1.60 Manufacturing overhead $0.40 Selling costs $2.00 Annual fixed costs $96,000 a) Calculate the contribution margin per unit. b) Calculate the number of units Scent Fragrance Company must sell each year to break even. c) Calculate the number of units Scent Fragrance Company must sell to yield a profit of$144,000. d) Managers may use Sensitivity analysis in their accounting system. i) What is sensitivity analysis? ii) How is Sensitivity analysis useful to managers?
Craig Co. sells two products, A and B. Last year, Craig sold 14,000 units of A and 21,000 units of B. Related data are as follows: Product Unit SellingPrice Unit VariableCost Unit ContributionMargin A $110 $70 $40 B 70 50 20 What was Craig Co.'s unit contribution margin?
Trez Company began operations this year. During this year, the company produced 100,000 units and sold 80.000 units. The absorption costing income statement for this year follows. Income Statement (Absorption Costing) Sales (80.000 units $45 per unit) Cost of goods sold Gross profit Selling and administrative expenses Income Additional Information a. Selling and administrative expenses consist of $400,000 in annual fixed expenses and $225 per unit in variable selling and administrative expenses. b. The company's product cost of $25 per unit consists of the following. Direct materials Direct labor Variable overhead Fixed overhead ($700,000/ 100,000 units) Required: Prepare an income statement for the company under variable costing. Sales Less: Variable expenses TREZ Company Income Statement (Variable Costing) Variable cost of goods sold Variable selling and administrative expenses Less: Fixed expenses Answer is not complete. Loss Fixed overhead Fixed selling and administrative costs $…
Northenscold Company sells several products. Information of average revenue and costs are as follows: Selling price per unit $20.00 Variable costs per unit: Direct materials $4.00 Direct manufacturing labor $2.00 ABC cost per unit $0.50 Fixed MOH $0.40 Variable MOH $0.30 Selling costs $2.00 Annual fixed costs $96,000 Calculate the number of units Northenscold's must sell to yield a profit of $144,000. (round to nearest whole unit).
Here are data regarding the three products that Acme Company makes and sells: Product P Product Q Product R Annual customer demand, in units Selling price, per unit 1,200 units 1,500 units 1,000 units $80 $83 $45 Variable operating costs, per unit Machine time to produce one unit $35 $26 $20 2.5 hours 3.0 hours 1.25 hours Acme's current capacity is 4,250 machine hours per year. What is the maximum amount that Acme should be willing to pay per machine hour to acquire an additional 100 hours of capacity? ○ $18 $20 ○ $23 ○ $19
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