Spar Limited incurs the following costs to produce and sell a single product Varinble costs per unit: Direct materials Direct labour Variable manufacturing overhead Variable selling and administrative expenses Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses O Absorption costing O Variable costing 1-b. Show computations to support your answer. During the last year, 44,300 units were produced and 28.100 units were sold. The Finished Goods Inventory account at the end of the year shows a balance of $145.800 for the 5,400 unsold units. Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Unit product cost Total cost, 5,400 units S Required: 1-a. Is the company using absorption costing or variable costing to cost units in the Finished Goods Inventory account? A 16 Variable Absorption Costing Costing 7 4 6 265,800 421,500

Spar Limited incurs the following costs to produce and sell a single product Varinble costs per unit: Direct materials Direct labour Variable manufacturing overhead Variable selling and administrative expenses Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses O Absorption costing O Variable costing 1-b. Show computations to support your answer. During the last year, 44,300 units were produced and 28.100 units were sold. The Finished Goods Inventory account at the end of the year shows a balance of $145.800 for the 5,400 unsold units. Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Unit product cost Total cost, 5,400 units S Required: 1-a. Is the company using absorption costing or variable costing to cost units in the Finished Goods Inventory account? A 16 Variable Absorption Costing Costing 7 4 6 265,800 421,500

Name: 2. Assume that the company wishes to prepare financial statements for
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Description: 2. Assume that the company wishes to prepare financial statements for the year to issue to its shareholders.a. Is the $145.800 figure for finished goods inventory the correct amount to use on these statements for external reporting purposes?YesNob.

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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Royal Lawncare Company produces and sells two packaged products-Weedban and Greengrow. Revenue and cost information relating to the products follow: Selling price per unit Variable expenses per unit Traceable fixed expenses per year Weedban $ 12,00 $ 2.80 $ 129,000 Product Sales Variable expenses Contribution margin Traceable fixed expenses Product line segment margin Common fixed expenses not traceable to products Net operating income Greengrow $.33.00 $12.00 $ 41,000 Last year the company produced and sold 41,000 units of Weedban and 22.500 units of Greengrow. Its annual common fixed expenses are $100,000. Required: Prepare a contribution format income statement segmented by product lines. Product Line Total Weedban Greengrow Company $ 5,289,500 $4,502,000 $ 607,500 3,270,000 143,500 270,000 2,019,500 4,448,500 427,500 2,019,500 $4,448,500 $ 427,500 $ 2,019,500
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A condensed income statement by product line for British Beverage Inc. indicated the following for Royal Cola for the past year: Sales $233,300 Cost of goods sold 111,000 Gross profit $122,300 Operating expenses 145,000 Loss from operations $(22,700) It is estimated that 12% of the cost of goods sold represents fixed factory overhead costs and that 23% of the operating expenses are fixed. Since Royal Cola is only one of many products, the fixed costs will not be materially affected if the product is discontinued. a. Prepare a differential analysis, dated March 3, to determine whether Royal Cola should be continued (Alternative 1) or discontinued (Alternative 2). If an amount is zero, enter zero "0". Use a minus sign to indicate a loss. Differential Analysis Continue Royal Cola (Alt. 1) or Discontinue Royal Cola (Alt. 2) January 21 Continue RoyalCola (Alternative 1) Discontinue RoyalCola (Alternative 2) Differential Effecton Income(Alternative 2)…