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Random Inc. January-17 February-17 March-17 April-17 May-17 June-17 Surov July-17 August-17 September-17 October-17 tomber 47 November-17 December-17 January-18 February-18 March-18 April-18 Cost data for the last 3 years Overhead Costs Units Produced $78,000 $91,000 $100,000 $78,000 $70,000 $89,000 200.000 $93,000 $87,000 90.000 $94,000 $81,000 $85,000 $104,500 0401.000 $104,000 $100,000 $92,000 $104,000 $96,000 $77,000 5,679 6,751 7,539 5,335 6,480 200 7,630 000 6,331 7,998 5,943 7,081 1.004 7,694 8,903 7,485 9,062 8,189 5,410 Use regression and show the equation used for Random to separate overhead into fixed and variable components. How much of the change in costs will this equation predict? What is the variable cost per unit for overhead? Round to the nearest cent What is the fixed overhead cost per month? Round to the nearest dollar Random analyzes their other costs and finds the following (in addition to the overhead costs above): Direct Mat Each unit of inventory uses 2 gallons of materials and each gallon costs $3 Direct Labor On average a worker can produce 16 units of product in an 8 hour shift and gets paid $180 for that shift Each month Random spends $26,500 on selling and administration costs Sales price for 2021 is estimated at $36 per unit What is the contribution margin per unit? Round to the nearest cent

Random Inc. January-17 February-17 March-17 April-17 May-17 June-17 Surov July-17 August-17 September-17 October-17 tomber 47 November-17 December-17 January-18 February-18 March-18 April-18 Cost data for the last 3 years Overhead Costs Units Produced $78,000 $91,000 $100,000 $78,000 $70,000 $89,000 200.000 $93,000 $87,000 90.000 $94,000 $81,000 $85,000 $104,500 0401.000 $104,000 $100,000 $92,000 $104,000 $96,000 $77,000 5,679 6,751 7,539 5,335 6,480 200 7,630 000 6,331 7,998 5,943 7,081 1.004 7,694 8,903 7,485 9,062 8,189 5,410 Use regression and show the equation used for Random to separate overhead into fixed and variable components. How much of the change in costs will this equation predict? What is the variable cost per unit for overhead? Round to the nearest cent What is the fixed overhead cost per month? Round to the nearest dollar Random analyzes their other costs and finds the following (in addition to the overhead costs above): Direct Mat Each unit of inventory uses 2 gallons of materials and each gallon costs $3 Direct Labor On average a worker can produce 16 units of product in an 8 hour shift and gets paid $180 for that shift Each month Random spends $26,500 on selling and administration costs Sales price for 2021 is estimated at $36 per unit What is the contribution margin per unit? Round to the nearest cent

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Random Inc. Cost data for the last 3 years Overhead Costs Units Produced January-17 February-17 $78,000 Use regression and show the equation used for Random to separate overhead into fixed and variable components. How much of the change in costs will this equation predict? 5,679 $91,000 $100,000 6,751 7,539 March-17 April-17 Мay-17 June-17 $78,000 $89,000 5,335 What is the variable cost per unit for overhead? Round to the nearest cent 6,480 $93,000 $87,000 $94,000 June-17 7,630 What is the fixed overhead cost per month? Round to the nearest dollar July-17 August-17 September-17 October-17 6,331 7 998 7,998 5 043 5,943 Random analyzes their other costs and finds the following (in addition to the overhead costs above): Direct Mat $81,000 $85,000 $104,500 $104,000 Each unit of inventory uses 2 gallons of materials and each gallon costs $3 On average a worker can produce 16 units of product in an 8 hour shift and gets paid $180 for that shift Each month Random spends $26,500 on selling and administration costs Sales price for 2021 is estimated at $36 per unit 7 081 7,081 Direct Labor November-17 7,694 December-17 8,903 7,485 9,062 8,189 5,410 January-18 February-18 March-18 $92,000 $104,000 $96,000 $77,000 $83,000 $95,000 What is the contribution margin per unit? Round to the nearest cent April-18 May-18 6,556 7,850 4,836 6,828 How many units does Random need to sell in a month to break even in 2021? June-18 How many units does Random need to sell in a month to make $25,000 of profit before taxes? July-18 August-18 September-18 $65,000 $92,000 $77,000 6,221 8,238 7,842 8,086 6,887 How much in dollars must Random sell in a month to make $100,000 in profit before taxes? $105,000 $103,000 $96,000 October-18 November-18 December-18 Show the predicted contribution margin format income statement for January if production and sales are 7,100 units for January 2021 January-19 February-19 March-19 April-19 May-19 June-19 $84,500 $100,000 $83,000 $79,000 $74,000 $81,000 8,438 Show the predicted contribution margin format income statement for February 2021 if sales increase from January by 200 units. 5,829 5,639 5,703 6,455 6,370 Also in February, selling costs are increased by $2,000/month, a new machine increases fixed overhead by $6,000 and makes it so that workers can make 24 in a shift (changes the direct labor per unit) Other costs should be consistent with January. $82,000 $74,000 $72,000 July-19 August-19 September-19 October-19 November-19 December-19 5,684 4,906 5,026 7,630 $73,000 $92,000 $82,000 4,014
Transcribed Image Text:Random Inc. Cost data for the last 3 years Overhead Costs Units Produced January-17 February-17 $78,000 Use regression and show the equation used for Random to separate overhead into fixed and variable components. How much of the change in costs will this equation predict? 5,679 $91,000 $100,000 6,751 7,539 March-17 April-17 Мay-17 June-17 $78,000 $89,000 5,335 What is the variable cost per unit for overhead? Round to the nearest cent 6,480 $93,000 $87,000 $94,000 June-17 7,630 What is the fixed overhead cost per month? Round to the nearest dollar July-17 August-17 September-17 October-17 6,331 7 998 7,998 5 043 5,943 Random analyzes their other costs and finds the following (in addition to the overhead costs above): Direct Mat $81,000 $85,000 $104,500 $104,000 Each unit of inventory uses 2 gallons of materials and each gallon costs $3 On average a worker can produce 16 units of product in an 8 hour shift and gets paid $180 for that shift Each month Random spends $26,500 on selling and administration costs Sales price for 2021 is estimated at $36 per unit 7 081 7,081 Direct Labor November-17 7,694 December-17 8,903 7,485 9,062 8,189 5,410 January-18 February-18 March-18 $92,000 $104,000 $96,000 $77,000 $83,000 $95,000 What is the contribution margin per unit? Round to the nearest cent April-18 May-18 6,556 7,850 4,836 6,828 How many units does Random need to sell in a month to break even in 2021? June-18 How many units does Random need to sell in a month to make $25,000 of profit before taxes? July-18 August-18 September-18 $65,000 $92,000 $77,000 6,221 8,238 7,842 8,086 6,887 How much in dollars must Random sell in a month to make $100,000 in profit before taxes? $105,000 $103,000 $96,000 October-18 November-18 December-18 Show the predicted contribution margin format income statement for January if production and sales are 7,100 units for January 2021 January-19 February-19 March-19 April-19 May-19 June-19 $84,500 $100,000 $83,000 $79,000 $74,000 $81,000 8,438 Show the predicted contribution margin format income statement for February 2021 if sales increase from January by 200 units. 5,829 5,639 5,703 6,455 6,370 Also in February, selling costs are increased by $2,000/month, a new machine increases fixed overhead by $6,000 and makes it so that workers can make 24 in a shift (changes the direct labor per unit) Other costs should be consistent with January. $82,000 $74,000 $72,000 July-19 August-19 September-19 October-19 November-19 December-19 5,684 4,906 5,026 7,630 $73,000 $92,000 $82,000 4,014
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