COST ACCOUNTING
16th Edition
ISBN: 9781323694008
Author: Horngren
Publisher: PEARSON C
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Chapter 18, Problem 18.18MCQ
Healthy Dinners Co. produces frozen dinners for the health conscious consumer. During the quarter ended September 30, the company had the following cost data:
| Dinner ingredients | $3,550,000 |
| Preparation labor | 900,000 |
| Sales and marketing costs | 125,000 |
| Plant production |
50,000 |
| Normal food spoilage | 60,000 |
| Abnormal food spoilage | 40,000 |
| General and administrative expenses | 75,000 |
Based on the above, what is the total amount of period expenses reflected in the company’s income statement for the quarter ended September 30?
- a. $200,000
- b. $240,000
- c. $290,000
- d. $300,000
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Mark's Meals produces frozen meals, which it sells for $9 each. The company uses the FIFO inventory costing method, and it computes a new monthly fixed manufacturing overhead rate based on the actual number of meals produced that month. All costs and production levels are exactly as planned. The following data are from the company's first two months in business:
(Click the icon to view the data.)
Read the requirements.
Requirement 1. Compute the product cost per meal produced under absorption costing and under variable costing. Do this first for January and then for February.
February
Less:
Less
January
Less:
Absorption
costing
Total product cost
Requirement 2a. Prepare separate monthly income statements for January and for February, using absorption costing.
Mark's Meals
Income Statement (Absorption Costing)
Month Ended
Less:
Variable
costing
Absorption
costing
Variable
costing
Requirement 2b. Prepare Mark's Meals' January and February income statements using variable costing.
Mark's…
Mario’s Foods produces frozen meals, which it sells for $8 each. The company uses the FIFO inventory costing method, and it computes a new monthly fixed manufacturing overhead rate based on the actual number of meals produced that month. All costs and production levels are exactly as planned. The following data are from the company’s first two months in business: (picture chart 1)
Compute the product cost per meal produced under absorption costing and under variable costing. Do this first for January and then for February.
Prepare separate monthly income statements for January and for February, using the following: a. Absorption costing b. Variable costing
Is operating income higher under absorption costing or variable costing in January? In February? Explain the pattern of differences in operating income based on absorption costing versus variable costing.
Maria's Food Service provides meals that nonprofit organizations distribute to handicapped and elderly people. The following is her forecasted income statement for April, when she expects to produce and sell 2,200 meals:
Amount
Per Unit
Sales revenue
$
11,440
$
5.20
Costs of meals produced
9,020
4.10
Gross profit
$
2,420
$
1.10
Administrative costs
1,100
0.50
Operating profit
$
1,320
$
0.60
Fixed costs included in this income statement are $3,124 for meal production and $440 for administrative costs. Maria has received a special request from an organization sponsoring a picnic to raise funds for the Special Olympics. This organization is willing to pay $3.10 per meal for 300 meals on April 10. Maria has sufficient idle capacity to fill this special order. These meals will incur all of the variable costs of meals produced, but variable administrative costs and total fixed costs will not be affected.
Required:
a. What…
Chapter 18 Solutions
COST ACCOUNTING
Ch. 18 - Why is there an unmistakable trend in...Ch. 18 - Distinguish among spoilage, rework, and scrap.Ch. 18 - Normal spoilage is planned spoilage. Discuss.Ch. 18 - Costs of abnormal spoilage are losses. Explain.Ch. 18 - What has been regarded as normal spoilage in the...Ch. 18 - Units of abnormal spoilage are inferred rather...Ch. 18 - In accounting for spoiled units, we are dealing...Ch. 18 - Total input includes abnormal as well as normal...Ch. 18 - Prob. 18.9QCh. 18 - The unit cost of normal spoilage is the same as...
Ch. 18 - In job costing, the costs of normal spoilage that...Ch. 18 - The costs of rework are always charged to the...Ch. 18 - Abnormal rework costs should be charged to a loss...Ch. 18 - When is a company justified in inventorying scrap?Ch. 18 - How do managers use information about scrap?Ch. 18 - Prob. 18.16MCQCh. 18 - Which of the following is a TRUE statement...Ch. 18 - Healthy Dinners Co. produces frozen dinners for...Ch. 18 - Fresh Products, Inc. incurred the following costs...Ch. 18 - Normal and abnormal spoilage in units. The...Ch. 18 - Weighted-average method, spoilage, equivalent...Ch. 18 - Weighted-average method, assigning costs...Ch. 18 - FIFO method, spoilage, equivalent units. Refer to...Ch. 18 - FIFO method, assigning costs (continuation of...Ch. 18 - Weighted-average method, spoilage. LaCroix Company...Ch. 18 - FIFO method, spoilage. 1. Do Exercise 18-25 using...Ch. 18 - Spoilage, journal entries. Plastique produces...Ch. 18 - Recognition of loss from spoilage. Spheres Toys...Ch. 18 - Weighted-average method, spoilage. LogicCo is a...Ch. 18 - FIFO method, spoilage. Refer to the information in...Ch. 18 - Standard-costing method, spoilage. Refer to the...Ch. 18 - Spoilage and job costing. (L. Bamber) Barrett...Ch. 18 - Reworked units, costs of rework. Heyer Appliances...Ch. 18 - Scrap, job costing. The Russell Company has an...Ch. 18 - Weighted-average method, spoilage. World Class...Ch. 18 - FIFO method, spoilage. Refer to the information in...Ch. 18 - Weighted-average method, shipping department...Ch. 18 - FIFO method, shipping department (continuation of...Ch. 18 - Physical units, inspection at various levels of...Ch. 18 - Spoilage in job costing. Jellyfish Machine Shop is...Ch. 18 - Rework in job costing, journal entry (continuation...Ch. 18 - Scrap at time of sale or at time of production,...Ch. 18 - Physical units, inspection at various stages of...Ch. 18 - Weighted-average method, inspection at 80%...Ch. 18 - Job costing, classifying spoilage, ethics....
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