Homework Help is Here – Start Your Trial Now!
Business
Accounting
The Gym Company produces weights in different sizes and sells them to gym equipment distribution companies who in turn sell them to various gyms such as Boston Sports Club or Gold's Gym. The manufacturing plant occupies 75% of the total buildings and grounds. Approximately 80% of the utilities are for the manufacturing plant. External vendors provide all of the materials and supplies. The sales force is paid entirely on commissions. Advertising spending is set by contract at beginning of the year. At full capacity, the plant is capable of producing 500,000 units per year, but 2006 production volumes are below this maximum capacity level. Total 2006 Product Cost per unit was $3.10, $0.60 of which was variable. Information on their 2006 costs and related inventory balances are listed in the table below. Raw materials inventory Work-in-process inventory Finished goods inventory Item 1-Jan-2006 $60,000 72.000 40,000 31-Dec-2006 $20,000 88,000 50,000 During the Year DE SED SEA

The Gym Company produces weights in different sizes and sells them to gym equipment distribution companies who in turn sell them to various gyms such as Boston Sports Club or Gold's Gym. The manufacturing plant occupies 75% of the total buildings and grounds. Approximately 80% of the utilities are for the manufacturing plant. External vendors provide all of the materials and supplies. The sales force is paid entirely on commissions. Advertising spending is set by contract at beginning of the year. At full capacity, the plant is capable of producing 500,000 units per year, but 2006 production volumes are below this maximum capacity level. Total 2006 Product Cost per unit was $3.10, $0.60 of which was variable. Information on their 2006 costs and related inventory balances are listed in the table below. Raw materials inventory Work-in-process inventory Finished goods inventory Item 1-Jan-2006 $60,000 72.000 40,000 31-Dec-2006 $20,000 88,000 50,000 During the Year DE SED SEA

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
icon
Concept explainers
Question

do not give solution in image format 

This question uses the same financial data as Questions 6 & 7, but it is a separate question. The Gym Company produces weights in different sizes and sells them to gym equipment distribution companies who in turn sell them to various gyms such as Boston Sports Club or Gold's Gym. The manufacturing plant occupies 75% of the total buildings and grounds. Approximately 80% of the utilities are for the manufacturing plant. External vendors provide all of the materials and supplies. The sales force is paid entirely on commissions. Advertising spending is set by contract at beginning of the year. At full capacity, the plant is capable of producing 500,000 units per year, but 2006 production volumes are below this maximum capacity level. Total 2006 Product Cost per unit was $3.10, $0.60 of which was variable. Information on their 2006 costs and related inventory balances are listed in the table below. Raw materials inventory Work-in-process inventory Finished goods inventory Total manufacturing costs Goods available for sale Lower Panama.com Cost of goods sold Purchases of raw materials Marketing salaries manevars Non factory administrative salaries Factory maintenance staff salaries Direct labor Building rental مسا Advertising UNlides/Elect Utilities (Electricity, water, phone...) Indirect labor Sales commissions (5% of sales) Factory equipment depreciation Item a) $1,319,300 & 459,250 b) $1.325,300 & 469,250 c) $1,294,750 & 417,500 d) $1,276,350,& 418,500 e) $1,319,600 & 459,750 fl None of the above 1-Jan-2006 $60,000 72.000 40,000 31-Dec-2006 $20,000 88,000 50,000 During the Year $1,310,250 1,334.250 1,284,250 164.500 236,500 235,000 154.000 ??? 250,000 $42.000 148,000 120,000 110,000 98,400 490,250 The company anticipates 2007 production volumes to increase by 10% over 2006. If total fixed costs and the variable product cost per unit in 2006 remain the same in 2007, what are the anticipated total manufacturing costs to be incurred and the anticipated total unit production volume in 2007?
Transcribed Image Text:This question uses the same financial data as Questions 6 & 7, but it is a separate question. The Gym Company produces weights in different sizes and sells them to gym equipment distribution companies who in turn sell them to various gyms such as Boston Sports Club or Gold's Gym. The manufacturing plant occupies 75% of the total buildings and grounds. Approximately 80% of the utilities are for the manufacturing plant. External vendors provide all of the materials and supplies. The sales force is paid entirely on commissions. Advertising spending is set by contract at beginning of the year. At full capacity, the plant is capable of producing 500,000 units per year, but 2006 production volumes are below this maximum capacity level. Total 2006 Product Cost per unit was $3.10, $0.60 of which was variable. Information on their 2006 costs and related inventory balances are listed in the table below. Raw materials inventory Work-in-process inventory Finished goods inventory Total manufacturing costs Goods available for sale Lower Panama.com Cost of goods sold Purchases of raw materials Marketing salaries manevars Non factory administrative salaries Factory maintenance staff salaries Direct labor Building rental مسا Advertising UNlides/Elect Utilities (Electricity, water, phone...) Indirect labor Sales commissions (5% of sales) Factory equipment depreciation Item a) $1,319,300 & 459,250 b) $1.325,300 & 469,250 c) $1,294,750 & 417,500 d) $1,276,350,& 418,500 e) $1,319,600 & 459,750 fl None of the above 1-Jan-2006 $60,000 72.000 40,000 31-Dec-2006 $20,000 88,000 50,000 During the Year $1,310,250 1,334.250 1,284,250 164.500 236,500 235,000 154.000 ??? 250,000 $42.000 148,000 120,000 110,000 98,400 490,250 The company anticipates 2007 production volumes to increase by 10% over 2006. If total fixed costs and the variable product cost per unit in 2006 remain the same in 2007, what are the anticipated total manufacturing costs to be incurred and the anticipated total unit production volume in 2007?
Expert Solution
steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Budgeting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS