Please do not give solution in image format thanku Variable and Absorption Costing-Service CompanyLawn RX, Inc. prepares a variable costing income statement for internal management and an absorption costing incomestatement for its bank. Lawn RX provides a quarterly lawn care service that is sold for $150. The variable and fixed costdata are as follows:Direct labor.OverheadVariable cost per unitFixed costa. Calculate reported income for management.Do not use negative signs with any answers..SalesCost of Goods Sold:Beginning InventoryVariable CostsFixed CostLess: Ending InventoryCost of Goods SoldMarketing, general and administrativeVariable cost (per service contract completed)Administrative expenses (fixed - per month)During 2016, 10,000 service contracts were signed and 9,500 service contracts were completed. Lawn RX had no servicecontracts at the beginning of the year.b. Calculate reported income for the bank.Do not use negative signs with any answers.SalesCost of Goods Sold:Beginning InventoryVariable Costs$100.00$5.00Answer Contribution marginGross profitLess: Ending inventorySelling expenseOverhead costAnswerContribution marginGross profitLess: Ending inventory Selling expenseOverhead costAdministrative expenseNet Income$100,000Administrative ExpenseTotal Fixed CostNet Income$6.00$42,000Absorption Costing Income StatementVariable Costing Income StatementAnswerContribution marginGross profitLess: Ending inventory Overhead cost Variable selling expenseVariable cost of goods sold$AnswerContribution marginGross profitLess: Ending inventoryOverhead costVariable selling expenseAnswerContribution marginGross profitLess: Ending inventory Overhead costVariable selling expenseFixed costs:AnswerContribution marginGross profitLess: Ending inventoryOverhead costVariable selling expense$$$$$

The income statement is one of the important financial statements of the business. It records the…

Variable and Absorption Costing-Service Company Lawn RX, Inc. prepares a variable costing income statement for internal management and an absorption costing income statement for its bank. Lawn RX provides a quarterly lawn care service that is sold for $150. The variable and fixed cost data are as follows: Direct labor Overhead Variable cost per unit Fixed cost a. Calculate reported income for management. Do not use negative signs with any answers. $100.00 Marketing, general and administrative Variable cost (per service contract completed) Administrative expenses (fixed - per month) During 2016, 10,000 service contracts were signed and 9,500 service contracts were completed. Lawn RX had no service contracts at the beginning of the year. Sales $5.00 $100,000 $6.00 $42,000 Absorption Costing Income Statement $

Variable and Absorption Costing-Service Company Lawn RX, Inc. prepares a variable costing income statement for internal management and an absorption costing income statement for its bank. Lawn RX provides a quarterly lawn care service that is sold for $150. The variable and fixed cost data are as follows: Direct labor Overhead Variable cost per unit Fixed cost a. Calculate reported income for management. Do not use negative signs with any answers. $100.00 Marketing, general and administrative Variable cost (per service contract completed) Administrative expenses (fixed - per month) During 2016, 10,000 service contracts were signed and 9,500 service contracts were completed. Lawn RX had no service contracts at the beginning of the year. Sales $5.00 $100,000 $6.00 $42,000 Absorption Costing Income Statement $

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter5: Activity-based Costing And Management

Section: Chapter Questions

Problem 57P: Customers as a Cost Object Morrisom National Bank has requested an analysis of checking account...

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Inventory Valuation under Absorption Costing Refer to the data for Judson Company above. Required: 1. How many units are in ending inventory? 2. Using absorption costing, calculate the per-unit product cost. 3. What is the value of ending inventory under absorption costing? Use the following information for Brief Exercises 3-21 and 3-22: During the most recent year, Judson Company had the following data associated with the product it makes:
Inventory Valuation under Variable Costing Refer to the data for Judson Company above. Required: 1. How many units are in ending inventory? 2. Using variable costing, calculate the per-unit product cost. 3. What is the value of ending inventory under variable costing? Use the following information for Brief Exercises 3-21 and 3-22: During the most recent year, Judson Company had the following data associated with the product it makes:
Inventory Valuation under Variable Costing Refer to the data for Pelham Company on the previous page. Required: 1. How many units are in ending inventory? 2. Using variable costing, calculate the per-unit product cost. 3. What is the value of ending inventory under variable costing? Use the following information for Brief Exercises 3-30 and 3-31: During the most recent year, Pelham Company had the following data associated with the product it makes:
Variable-Costing Income Statement Refer to the data for Osterman Company on the previous page. Required: 1. Calculate the cost of goods sold under variable costing. 2. Prepare an income statement using variable costing. Use the following information for Brief Exercises 3-23 and 3-24: During the most recent year, Osterman Company had the following data:
Customers as a Cost Object Morrisom National Bank has requested an analysis of checking account profitability by customer type. Customers are categorized according to the size of their account: low balances, medium balances, and high balances. The activities associated with the three different customer categories and their associated annual costs are as follows: Additional data concerning the usage of the activities by the various customers are also provided: Required: (Note: Round answers to two decimal places.) 1. Calculate a cost per account per year by dividing the total cost of processing and maintaining checking accounts by the total number of accounts. What is the average fee per month that the bank should charge to cover the costs incurred because of checking accounts? 2. Calculate a cost per account by customer category by using activity rates. 3. Currently, the bank offers free checking to all of its customers. The interest revenues average 90 per account; however, the interest revenues earned per account by category are 80, 100, and 165 for the low-, medium-, and high-balance accounts, respectively. Calculate the average profit per account (average revenue minus average cost from Requirement 1). Then calculate the profit per account by using the revenue per customer type and the unit cost per customer type calculated in Requirement 2. 4. CONCEPTUAL CONNECTION After the analysis in Requirement 3, a vice president recommended eliminating the free checking feature for low-balance customers. The bank president expressed reluctance to do so, arguing that the low-balance customers more than made up for the loss through cross-sales. He presented a survey that showed that 50% of the customers would switch banks if a checking fee were imposed. Explain how you could verify the presidents argument by using ABC.
Method of Least Squares, Predicting Cost for Different Time Periods from the One Used to Develop a Cost Formula Refer to the information for Farnsworth Company on the previous page. However, assume that Tracy has used the method of least squares on the receiving data and has gotten the following results: Required: 1. Using the results from the method of least squares, prepare a cost formula for the receiving activity. 2. Using the formula from Requirement 1, what is the predicted cost of receiving for a month in which 1,450 receiving orders are processed? (Note: Round your answer to the nearest dollar.) 3. Prepare a cost formula for the receiving activity for a quarter. Based on this formula, what is the predicted cost of receiving for a quarter in which 4,650 receiving orders are anticipated? Prepare a cost formula for the receiving activity for a year. Based on this formula, what is the predicted cost of receiving for a year in which 18,000 receiving orders are anticipated?
Summarized data for Walrus Co. for its first year of operations are: A. Prepare an income statement under absorption costing B. Prepare an income statement under variable costing
Evaluating selling and administrative cost allocations Gordon Gecco Furniture Company has two major product lines with the following characteristics: Commercial office furniture: Few large orders, little advertising support, shipments in full truckloads, and low handling complexity Home office furniture: Many small orders, large advertising support, shipments in partial truckloads, and high handling complexity The company produced the following profitability report for management: The selling and administrative expenses are allocated to the products on the basis of relative sales dollars. Evaluate the accuracy of this report and recommend an alternative approach.
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Absorption and Variable Costing Income Statements for Two Months and Analysis During the first month of operations ended July 31, Head Gear Inc. manufactured 25,400 hats, of which 23,600 were sold. Operating data for the month are summarized as follows: Sales $179,360 Manufacturing costs: Direct materials $109,220 Direct labor 27,940 Variable manufacturing cost 12,700 Fixed manufacturing cost 12,700 162,560 Selling and administrative expenses: Variable $9,440 Fixed 6,890 16,330 During August, Head Gear Inc. manufactured 21,800 hats and sold 23,600 hats. Operating data for August are summarized as follows: Sales $179,360 Manufacturing costs: Direct materials $93,740 Direct labor 23,980 Variable manufacturing cost 10,900 Fixed manufacturing cost 12,700 141,320 Selling and administrative expenses: Variable $9,440 Fixed 6,890 16,330 Required: 1a. Prepare income statement for July using the absorption costing concept. Head Gear Inc. Absorption Costing Income Statement For the Month Ended…
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