Blazer Chemical produces and sells an ice-melting granular used on roadways and sidewalks in winter. It annually produces and sells20,000 tons of its granular. Because of this year's mild winter, projected demand for its product is only 15,000 tons. Based onprojected production and sales of 15,000 tons, the company estimates the following income using absorption costing.Sales (15,000 tons at $80 per ton)Cost of goods sold (15,000 tons at $60 per ton)Gross profitSelling and administrative expensesIncomeIts product cost per ton follows and consists mainly of fixed overhead because its automated production process uses expensiveequipment.Direct materials.Direct laborVariable overheadFixed overhead ($600,000/15,000 tons)Selling and administrative expenses consist of variable selling and administrative expenses of $6 per ton and fixed selling andadministrative expenses of $210,000 per year. The company's president will not earn a bonus unless a positive income is reported.The controller mentions that because the company has large storage capacity, it can report a positive income by setting production atthe usual 20,000 ton level even though it expects to sell only 15,000 tons. The president is surprised that the company can reportincome by producing more without increasing sales.Required:1. Prepare an income statement using absorption costing based on production of 20,000 tons and sales of 15,000 tons. Can thecompany report a positive income by increasing production to 20,000 tons and storing the 5,000 tons of excess production ininventory?2. By how much does income increase by when producing 20,000 tons and storing 5,000 tons in inventory compared to onlyproducing 15,000 tons?Complete this question by entering your answers in the tabs below.Required 1 Required 2$ 13 per ton$ 4 per ton$3 per ton$ 40 per tonBLAZER CHEMICALIncome Statement (Absorption Costing)Prepare an income statement using absorption costing based on production of 20,000 tons and sales of 15,000 tons. Can thecompany report a positive income by increasing production to 20,000 tons and storing the 5,000 tons of excess production ininventory?Did the company report a positive income?$ 1,200,000900,000300,000300,000$< Required 100Required 2 > Blazer Chemical produces and sells an ice-melting granular used on roadways and sidewalks in winter. It annually produces and sells20,000 tons of its granular. Because of this year's mild winter, projected demand for its product is only 15,000 tons. Based onprojected production and sales of 15,000 tons, the company estimates the following income using absorption costing.Sales (15,000 tons at $80 per ton)Cost of goods sold (15,000 tons at $60 per ton)Gross profitSelling and administrative expensesIncomeIts product cost per ton follows and consists mainly of fixed overhead because its automated production process uses expensiveequipment.Direct materials.Direct laborVariable overheadFixed overhead ($600,000/15,000 tons)$ 13 per ton$ 4 per ton$3 per ton$ 40 per tonSelling and administrative expenses consist of variable selling and administrative expenses of $6 per ton and fixed selling andadministrative expenses of $210,000 per year. The company's president will not earn a bonus unless a positive income is reported.The controller mentions that because the company has large storage capacity, it can report a positive income by setting production atthe usual 20,000 ton level even though it expects to sell only 15,000 tons. The president is surprised that the company can reportincome by producing more without increasing sales.$ 1,200,000900,000300,000300,000Required:1. Prepare an income statement using absorption costing based on production of 20,000 tons and sales of 15,000 tons. Can thecompany report a positive income by increasing production to 20,000 tons and storing the 5,000 tons of excess production ininventory?2. By how much does income increase by when producing 20,000 tons and storing 5,000 tons in inventory compared to onlyproducing 15,000 tons?Complete this question by entering your answers in the tabs below.Required 1 Required 2< Required 1By how much does income increase by when producing 20,000 tons and storing 5,000 tons in inventory compared to onlyproducing 15,000 tons?Increase in incomeRequired 2 >

Required: 1. Prepare an income statement using absorption costing based on production of 20,000 tons and sales of 15,000 tons. Can the company report a positive income by increasing production to 20,000 tons and storing the 5,000 tons of excess production in inventory? 2. By how much does income increase by when producing 20,000 tons and storing 5,000 tons in inventory compared to only producing 15,000 tons?

Required: 1. Prepare an income statement using absorption costing based on production of 20,000 tons and sales of 15,000 tons. Can the company report a positive income by increasing production to 20,000 tons and storing the 5,000 tons of excess production in inventory? 2. By how much does income increase by when producing 20,000 tons and storing 5,000 tons in inventory compared to only producing 15,000 tons?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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units?
By using the information given below calculate the net income under the traditional costing method. Show your calculations. (No beginning finished goods inventory.) Variable cost of goods sold per unit Fixed cost of goods sold per unit Variable operating expenses per unit Fixed operating expenses per unit Selling price Number of units sold Number of units produced 18,000 20,000 $4.00 $ 3.00 $1.50 $1.25 $12.00
What are the expected average quarterly costs of running a consulting practice if fixed costs are expected to be $4,000 a month and variable costs are expected to be $100 per client for each quarter? Expected number of clients for the year are: Jan - March April - June July - Sep Oct - Dec 110 140 150 100 A. $12,500 B. $24, 500 C. $16, 500 D. $19,500
REQUIRED: How much is the company's overall income?
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1. Compute the unit product cost under absorption costing. 2. Compute the net income under absorption costing. 3. What will be the value of the ending inventory if the company is using absorption costing?
! Required information [The following information applies to the questions displayed below] Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units) $ 10,000 5,500 4,500 2,250 Sales Variable expenses Contribution margin Fixed expenses Net operating income 2,250 6. If the selling price increases by $2 per unit and the sales volume decreases by 100 units, what would be the net operating income? Net operating income %24
7. Which one of these is not an objective of cost accounting? a.Assisting shareholders in decision making b.Cost control and reduction c.Ascertainment of cost d.Determination of selling price 8. Calculate EOQ from the following details: Consumption per month is 2,000 units, ordering cost is RO 10 per order, purchase price is RO 100 per unit and annual carrying cost is 6%. a.283 units b.245 units c.219 units d.310 units
I ONLY NEED #4, 5, & 6 Contribution Margin, Break-Even Sales, Cost-Volume-Profit Chart, Margin of Safety, and Operating Leverage Belmain Co. expects to maintain the same inventories at the end of 20Y7 as at the beginning of the year. The total of all production costs for the year is therefore assumed to be equal to the cost of goods sold. With this in mind, the various department heads were asked to submit estimates of the costs for their departments during the year. A summary report of these estimates is as follows: Estimated Fixed Cost Estimated Variable Cost (per unit sold) Production costs: Direct materials — $26 Direct labor — 17 Factory overhead $265,400 13 Selling expenses: Sales salaries and commissions 55,200 6 Advertising 18,700 — Travel 4,100 —…