Cost of goods sold (COGS): It relates to the direct costs related to the production of the goods sold in a company. It also includes the cost of the materials used in the development of the good and the direct labor costs used to develop the good. It does not include indirect expenses, such as allocation costs and sales force costs. Cost of goods sold is also termed as "cost of sales." Computation of the ratio of the cost of goods sold(COGS) to total expenses.
Cost of goods sold (COGS): It relates to the direct costs related to the production of the goods sold in a company. It also includes the cost of the materials used in the development of the good and the direct labor costs used to develop the good. It does not include indirect expenses, such as allocation costs and sales force costs. Cost of goods sold is also termed as "cost of sales." Computation of the ratio of the cost of goods sold(COGS) to total expenses.
Solution Summary: The author analyzes the ratio of the cost of goods sold (COGS) to total expenses.
Cost of goods sold (COGS): It relates to the direct costs related to the production of the goods sold in a company. It also includes the cost of the materials used in the development of the good and the direct labor costs used to develop the good. It does not include indirect expenses, such as allocation costs and sales force costs. Cost of goods sold is also termed as "cost of sales."
Computation of the ratio of the cost of goods sold(COGS) to total expenses.
To determine
Concept introduction:
Cost of goods sold (COGS) is a combination of direct material and direct labor used in the manufacturing of goods. Total expenses related to cost incurred for the production and sale of the goods.
Differences and similarities in the ratio calculated in part 1 and Bt: the 3-2 ratio of companies in subsequent years.
Scarce resource; discontinued product lines; negative contribution marginThe officers of Bardwell Company are reviewing the profitability of the company’s four products and the potential effects of several proposals for varying the product mix. The following is an excerpt from the income statement and other data.
Total
Product P
Product Q
Product R
Product S
Sales
$62,600
$10,000
$18,000
$12,600
$22,000
Cost of goods sold
(44,274)
(4,750)
(7,056)
(13,968)
(18,500)
Gross profit
$18,326
$5,250
$10,944
$(1,368)
$3,500
Operating expenses
(12,004)
(1,990)
(2,968)
(2,826)
(4,220)
Income before taxes
6,322
$3,260
$7,976
$(4,194)
$(720)
Units sold
1,000
1,200
1,800
2,000
Sales price per unit
$10.00
$15.00
$7.00
$11.00
Variable cost of goods sold
2.50
3.00
6.50
6.00
Variable operating expenses
1.17
1.25
1.00
1.20
Each of the following proposals is to be considered independently of the other proposals. Consider only the product changes stated in each…
Analyzing one company's make or buy and special order proposals
OneCo is a retail organization in the Northeast that sells upscale clothing. Each year, store managers (in consultation with their supervisors) establish financial goals; a monthly reporting system captures actual performance.
OneCo Inc. produces a single product. Cost per unit, based on the manufacture and sale of 10,000 units per month at full capacity, is shown below.
Product costs
Direct materials
$4.00
Direct labor
1.30
Variable overhead
2.50
Fixed overhead
3.40
Sales commission
0.90
$12.10
The $0.90 sales commission is paid for every unit sold through regular channels. Market demand is such that OneCo is operating at full capacity, and the firm has found it can sell all it can produce at the market price of $16.50.
Currently, OneCo is considering two separate proposals:
· Gatsby, Inc. has offered to buy 1,000 units at $14.35 each. Sales commission would be $0.35 on this special order.
·…
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[The following information applies to the questions displayed below.]
The first production department in a process manufacturing system reports the following unit data.
Beginning work in process inventory
Units started and completed
35,200 units
52,800 units
Units completed and transferred out
Ending work in process inventory
88,000 units
17,900 units
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Exercise 16-4 (Algo) Weighted average: Computing equivalent units LO P1
Prepare the production department's equivalent units of production for direct materials under each of the following three separate
assumptions using the weighted average method for process costing.
Equivalent Units of Production (EUP)-Weighted Average Method
1. All direct materials are added to products when…
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