Rooney Modems, Inc. makes modem cards that are used in notebook computers. The company completed the following transactions during year 1. All purchases and sales were made with cash.Acquired $815,000 of cash from the owners.Purchased $400,000 of manufacturing equipment. The equipment has a $44,000 salvage value and a four-year useful life.The company started and completed 6,400 modems. Direct materials purchased and used amounted to $53 per unit.Direct labor costs amounted to $38 per unit.The cost of manufacturing supplies used amounted to $9 per unit.The company paid $63,000 to rent the manufacturing facility.Magnificent sold all 6,400 units at a cash price of $185 per unit. (Hint: It will be necessary to determine the manufacturing costs in order to record the cost of goods sold.)The sales staff was paid a $7 per unit sales commission.Paid $52,000 to purchase equipment for administrative offices. The equipment was expected to have a $4,300 salvage value and a three-year useful life.Administrative expenses consisting of office rental and salaries amounted to $73,900.What is the Fixed Cost and Total (Cost of Goods Sold) given that the variable cost per unit is $100?

The COGS indicates the direct costs of the goods sold and produced by the company which includes…

Answered: Rooney Modems, Inc. makes modem cards…

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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Rooney Modems, Inc. makes modem cards that are used in notebook computers. The company completed the following transactions during year 1. All purchases and sales were made with cash.

Acquired $815,000 of cash from the owners.
Purchased $400,000 of manufacturing equipment. The equipment has a $44,000 salvage value and a four-year useful life.
The company started and completed 6,400 modems. Direct materials purchased and used amounted to $53 per unit.
Direct labor costs amounted to $38 per unit.
The cost of manufacturing supplies used amounted to $9 per unit.
The company paid $63,000 to rent the manufacturing facility.
Magnificent sold all 6,400 units at a cash price of $185 per unit. (Hint: It will be necessary to determine the manufacturing costs in order to record the cost of goods sold.)
The sales staff was paid a $7 per unit sales commission.
Paid $52,000 to purchase equipment for administrative offices. The equipment was expected to have a $4,300 salvage value and a three-year useful life.
Administrative expenses consisting of office rental and salaries amounted to $73,900.

What is the Fixed Cost and Total (Cost of Goods Sold) given that the variable cost per unit is $100?

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