Radial Sound Systems produces high-end amplifiers. The selling price per unit is $4,200. There is no beginning inventory. Costs involved in production are: Cost Component Direct material Direct labor Variable manufacturing overhead Amount $410 $405 $240 Total variable manufacturing cost per unit $1,055 Fixed manufacturing overhead per year $615,000 In addition, the company has fixed selling and administrative costs: • Fixed selling costs per year: $225,000 Fixed administrative costs per year: $140,000 During the year, Radial produces 3,600 units and sells 3,300 units. What is the value of ending inventory using variable costing?

Radial Sound Systems produces high-end amplifiers. The selling price per unit is $4,200. There is no beginning inventory. Costs involved in production are: Cost Component Direct material Direct labor Variable manufacturing overhead Amount $410 $405 $240 Total variable manufacturing cost per unit $1,055 Fixed manufacturing overhead per year $615,000 In addition, the company has fixed selling and administrative costs: • Fixed selling costs per year: $225,000 Fixed administrative costs per year: $140,000 During the year, Radial produces 3,600 units and sells 3,300 units. What is the value of ending inventory using 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 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 a. 55,500 b. 92,500 c. 66,500 d. 39,900
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%
Bethany Company has just completed the first month of producing a new product but has not yet shipped any of this product. The product incurred variable manufacturing costs of 5,000,000, fixed manufacturing costs of 2,000,000, variable marketing costs of 1,000,000, and fixed marketing costs of 3,000,000. Under the variable costing concept, the inventory value of the new product would be: a. 5,000,000. b. 6,000,000. c. 8,000,000. d. 11,000,000.
Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The cost of placing an order is 30. The cost of holding one unit of inventory for one year is 15.00. Currently, Ottis places 160 orders of 4,000 plastic housing units per year. Required: 1. Compute the economic order quantity. 2. Compute the ordering, carrying, and total costs for the EOQ. 3. How much money does using the EOQ policy save the company over the policy of purchasing 4,000 plastic housing units per order?
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Summit Manufacturing produces snow shovels. The selling price per snow shovel is $30. There is no beginning inventory. Costs involved in production are: Direct materials $5.00 Direct labor 4.00 Variable manufacturing overhead 3.00 Total variable manufacturing costs per unit $12.00 Fixed manufacturing overhead per year $180,000 In addition, the company has fixed selling and administrative costs of $160,000 per year. During the year, Summit produces 40,000 snow shovels and sells 37,000 show shovels. What is net income use variable costing?
Sierra Company incurs the following costs to produce and sell its only product. Variable costs per unit: Direct materials $ 9 Direct labor $ 8 Variable manufacturing overhead $ 3 Variable selling and administrative expenses $ 4 Fixed costs per year: Fixed manufacturing overhead $ 60,000 Fixed selling and administrative expenses $ 305,000 During this year, 30,000 units were produced and 25,250 units were sold. The Finished Goods inventory account at the end of this year shows a balance of $95,000 for the 4,750 unsold units. Required: 1-a. Calculate this year's ending balance in Finished Goods inventory two ways—using variable costing and using absorption costing. 1-b. Does it appear that the company is using variable costing or absorption costing to assign costs to the 4,750 units in its Finished Goods inventory? 2. Assume that the company wishes to prepare this year's financial statements for its stockholders. a. Is Finished Goods inventory…
Pinecrest Manufacturing produces only one product. The company's normal capacity is 25,000 units per year, and the unit sales price is $6. Relevant Costs: Variable Costs per Unit: . Materials: $1.50 • Direct Labor: $1.80 • Factory Overhead: $0.70 • Marketing Expenses: $0.40 Total Fixed Costs: • Factory Overhead: $20,000 • Marketing Expenses: $6,000 Administrative Expenses: $8,000 Required: Compute the following: a) The break-even point in units of product b) The break-even point in dollars of sales c) The number of units that must be produced and sold to achieve a profit of $12,000 d) The sales revenue required to achieve a profit of $12,000
Ovation Company has a single product called a Bit. The company normally produces and sells 64,800 Bits each year at a selling price of $47 per unit. The company's unit costs at this level of activity are given below: Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Total cost per unit $10.50 7.50 3.60 4.80 ($311,040 total) 6.60 2.70 ($174,960 total) $35.70 A number of questions relating to the production and sale of Bits follow. Each question is independent. Required. 1. Assume that Ovation Company has sufficient capacity to produce 97,200 Bits each year without any increase in fixed manufacturing overhead costs. The company could increase its sales by 25% above the current 64,800 units each year if it were willing to increase the fixed selling expenses by $105,000. a. Calculate the incremental net operating income. Incremental operating income $ 199,560 b. Would the increased fixed selling…
Andretti Company has a single product called a Dak. The company normally produces and sells 85,000 Daks each year at a selling price of $64 per unit. The company's unit costs at this level of activity are given below: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses. Total cost per unit $ 8.50 11.00 3.20 6.00 ($510,000 total) 2.70 3.00 ($255,000 total) $ 34.40 A number of questions relating to the production and sale of Daks follow. Each question is independent. Required: 1-a. Assume Andretti Company has sufficient capacity to produce 110,500 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 30% above the present 85,000 units each year if it increased fixed selling expenses by $140,000. What is the financial advantage (disadvantage) of investing an additional $140,000 in fixed selling expenses? 1-b. Would the additional…
Andretti Company has a single product called a Dak. The company normally produces and sells 88,000 Daks each year at a selling price of $56 per unit. The company's unit costs at this level of activity are given below: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses $ 7.50 11.00 2.10 5.00 ($440,000 total). 3.70 3.00 ($264,000 total) Total cost per unit $ 32.30
Summit Electronics produces and sells 3,500 units of a product. The following cost data is available: Sales Price: $600.00 per unit Fixed Costs: • Marketing and administrative: $250,000 per period Manufacturing overhead: $150,000 per period Variable Costs (per unit): Marketing and administrative: $40.00 Manufacturing overhead: $55.00 • • Direct labor: $75.00 . Direct material: $140.00 What is the full cost per unit of making and selling the product?