Variable Costing Managers frequently use variable costing for internal purposes for taking decision making. The cost of goods manufactured includes direct materials, direct labor, and variable factory overhead. Fixed factory overhead considered as period (fixed) expense. The manufacturing margin for the month of March of Company M.

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Answer 1

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Chapter 6, Problem 1BE

(a)

To determine

Variable Costing

Managers frequently use variable costing for internal purposes for taking decision making. The cost of goods manufactured includes direct materials, direct labor, and variable factory overhead. Fixed factory overhead considered as period (fixed) expense.

The manufacturing margin for the month of March of Company M.

(b)

To determine

The contribution margin for the month of March of Company M.

(c)

To determine

The Income from operations for the month of March of Company M.

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L.L. Bean operates two factories that produce its popular Bean boots (also known as "duck boots") in its home state of Maine. Since L.L. Bean prides itself on manufacturing its boots in Maine and not outsourcing, backorders for its boots can be high. In 2014, L.L. Bean sold about 450,000 pairs of the boots. At one point during 2014, it had a backorder level of about 100,000 pairs of boots. L.L. Bean can manufacture about 2,200 pairs of its duck boots each day with its factories running 24/7. In 2015, L.L. Bean expects to sell more than 500,000 pairs of its duck boots. As of late November 2015, the backorder quantity for Bean Boots was estimated to be about 50,000 pairs. Question:

The standard rate per direct labor hour should

L.L. Bean operates two factories that produce its popular Bean boots (also known as "duck boots") in its home state of Maine. Since L.L. Bean prides itself on manufacturing its boots in Maine and not outsourcing, backorders for its boots can be high. In 2014, L.L. Bean sold about 450,000 pairs of the boots. At one point during 2014, it had a backorder level of about 100,000 pairs of boots. L.L. Bean can manufacture about 2,200 pairs of its duck boots each day with its factories running 24/7. In 2015, L.L. Bean expects to sell more than 500,000 pairs of its duck boots. As of late November 2015, the backorder quantity for Bean Boots was estimated to be about 50,000 pairs. Question: 1. Assume that 5% of the L.L. Bean boots are returned by customers for various reasons. L. Bean has a 100% refund policy for returns, no matter what the reason. What would the journal entry be to accrue L.L. Bean's sales returns for this one pair of boots? (Note: L.L. Bean most likely will make…

Answer 2

Question

Chapter 6, Problem 1BE

(a)

To determine

Variable Costing

Managers frequently use variable costing for internal purposes for taking decision making. The cost of goods manufactured includes direct materials, direct labor, and variable factory overhead. Fixed factory overhead considered as period (fixed) expense.

The manufacturing margin for the month of March of Company M.

(b)

To determine

The contribution margin for the month of March of Company M.

(c)

To determine

The Income from operations for the month of March of Company M.

Expert Solution & Answer

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Answer 3

Question

Chapter 6, Problem 1BE

(a)

To determine

Variable Costing

Managers frequently use variable costing for internal purposes for taking decision making. The cost of goods manufactured includes direct materials, direct labor, and variable factory overhead. Fixed factory overhead considered as period (fixed) expense.

The manufacturing margin for the month of March of Company M.

(b)

To determine

The contribution margin for the month of March of Company M.

(c)

To determine

The Income from operations for the month of March of Company M.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 6, Problem 1BE

(a)

To determine

Variable Costing

Managers frequently use variable costing for internal purposes for taking decision making. The cost of goods manufactured includes direct materials, direct labor, and variable factory overhead. Fixed factory overhead considered as period (fixed) expense.

The manufacturing margin for the month of March of Company M.

(b)

To determine

The contribution margin for the month of March of Company M.

(c)

To determine

The Income from operations for the month of March of Company M.

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 5

Chapter 6, Problem 1BE

(a)

To determine

Variable Costing

Managers frequently use variable costing for internal purposes for taking decision making. The cost of goods manufactured includes direct materials, direct labor, and variable factory overhead. Fixed factory overhead considered as period (fixed) expense.

The manufacturing margin for the month of March of Company M.

(b)

To determine

The contribution margin for the month of March of Company M.

(c)

To determine

The Income from operations for the month of March of Company M.

Answer 6

Chapter 6, Problem 1BE

(a)

To determine

Variable Costing

Managers frequently use variable costing for internal purposes for taking decision making. The cost of goods manufactured includes direct materials, direct labor, and variable factory overhead. Fixed factory overhead considered as period (fixed) expense.

The manufacturing margin for the month of March of Company M.

Answer 7

Chapter 6, Problem 1BE

(a)

To determine

Variable Costing

Managers frequently use variable costing for internal purposes for taking decision making. The cost of goods manufactured includes direct materials, direct labor, and variable factory overhead. Fixed factory overhead considered as period (fixed) expense.

The manufacturing margin for the month of March of Company M.

Answer 8

(b)

To determine

The contribution margin for the month of March of Company M.

Answer 9

(b)

To determine

The contribution margin for the month of March of Company M.

Answer 10

(c)

To determine

The Income from operations for the month of March of Company M.

Answer 11

(c)

To determine

The Income from operations for the month of March of Company M.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 6 - What types of costs are customarily included in...Ch. 6 - Which type of manufacturing cost (direct...Ch. 6 - Which of the following costs would be included in...Ch. 6 - In the variable costing income statement, how are...Ch. 6 - Prob. 5DQ Ch. 6 - Discuss how financial data prepared on the basis...Ch. 6 - Prob. 7DQ Ch. 6 - Explain why rewarding sales personnel on the basis...Ch. 6 - Prob. 9DQ Ch. 6 - Prob. 10DQ

Solution Summary: The author calculates the manufacturing margin for the month of March of Company M by deducting fixed manufacturing costs.

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The contribution margin for the month of March of Company M.

The Income from operations for the month of March of Company M.

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