Absorption costing is a technique for calculating cost of product by taking indirect expense and direct cost into consideration. To calculate: Net operating income using absorption costing.

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Answer 1

Question

Chapter IE, Problem 3E

1.

To determine

Introduction: Absorption costing is a technique for calculating cost of product by taking indirect expense and direct cost into consideration.

To calculate: Net operating income using absorption costing.

2.

To determine

Introduction: The variability between present value of all cash outflow and present value of all cash inflow is known as net present value (NPV). The discount rate at which the net present value is equal to zero is knows as Internal rate of return (IRR). The ratio of income and capital gain is known as simple rate of return.

To calculate: Income statement using absorption costing, after improving quality of raw material.

3.

To determine

Introduction: The variability between present value of all cash outflow and present value of all cash inflow is known as net present value (NPV). The discount rate at which the net present value is equal to zero is knows as Internal rate of return (IRR). The ratio of income and capital gain is known as simple rate of return.

To calculate: Income statement using absorption costing, after increasing selling price.

4.

To determine

Introduction: The variability between present value of all cash outflow and present value of all cash inflow is known as net present value (NPV). The discount rate at which the net present value is equal to zero is knows as Internal rate of return (IRR). The ratio of income and capital gain is known as simple rate of return.

To prepare: Income statement using absorption costing

5.

To determine

Introduction: The variability between present value of all cash outflow and present value of all cash inflow is known as net present value (NPV). The discount rate at which the net present value is equal to zero is knows as Internal rate of return (IRR). The ratio of income and capital gain is known as simple rate of return.

To calculate: Income statement using absorption costing, after improving quality of raw material.

6.

To determine

Introduction: The variability between present value of all cash outflow and present value of all cash inflow is known as net present value (NPV). The discount rate at which the net present value is equal to zero is knows as Internal rate of return (IRR). The ratio of income and capital gain is known as simple rate of return.

To calculate: Income statement using absorption costing, after increasing selling price.

7.

To determine

Introduction: Break even analysis is used to determine the number of product or service a company has to sell to cover its total cost. Above the breakeven point the company will earn profit while below it the company will earn loss.

To calculate: BEP in units and in $.

8.

To determine

Introduction: Break even analysis is used to determine the number of product or service a company has to sell to cover its total cost. Above the breakeven point the company will earn profit while below it the company will earn loss.

To calculate: The margin of safety.

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Exxarro Llimited is considering pricing and costing for the year ahead. The following data based on expected production and sales of 15 000 units are provided for analysis:Variable manufacturing costR1 185 000Fixed manufacturing costR510 000Sales commissionR5 per unit soldFixed administration costR130 000SalesR210 per unit Study the information provided above and answer the following questions independently:4.1 Calculate the break-even sales value. 4.2 Calculate the sales volume required to achieve a profit of R 800 000. 4.3 Suppose Exxaro Limited is considering a decrease of 10% per unit in the selling price of the product with the expectation that it would increase sales volume by 10%. Is this a good idea? Motivate your answer with relevant calculations.

How many units of product Y must be sold in oder for the firm to earn operating income of P85,200?

Answer 2

Question

Chapter IE, Problem 3E

1.

To determine

Introduction: Absorption costing is a technique for calculating cost of product by taking indirect expense and direct cost into consideration.

To calculate: Net operating income using absorption costing.

2.

To determine

Introduction: The variability between present value of all cash outflow and present value of all cash inflow is known as net present value (NPV). The discount rate at which the net present value is equal to zero is knows as Internal rate of return (IRR). The ratio of income and capital gain is known as simple rate of return.

To calculate: Income statement using absorption costing, after improving quality of raw material.

3.

To determine

Introduction: The variability between present value of all cash outflow and present value of all cash inflow is known as net present value (NPV). The discount rate at which the net present value is equal to zero is knows as Internal rate of return (IRR). The ratio of income and capital gain is known as simple rate of return.

To calculate: Income statement using absorption costing, after increasing selling price.

4.

To determine

Introduction: The variability between present value of all cash outflow and present value of all cash inflow is known as net present value (NPV). The discount rate at which the net present value is equal to zero is knows as Internal rate of return (IRR). The ratio of income and capital gain is known as simple rate of return.

To prepare: Income statement using absorption costing

5.

To determine

Introduction: The variability between present value of all cash outflow and present value of all cash inflow is known as net present value (NPV). The discount rate at which the net present value is equal to zero is knows as Internal rate of return (IRR). The ratio of income and capital gain is known as simple rate of return.

To calculate: Income statement using absorption costing, after improving quality of raw material.

6.

To determine

Introduction: The variability between present value of all cash outflow and present value of all cash inflow is known as net present value (NPV). The discount rate at which the net present value is equal to zero is knows as Internal rate of return (IRR). The ratio of income and capital gain is known as simple rate of return.

To calculate: Income statement using absorption costing, after increasing selling price.

7.

To determine

Introduction: Break even analysis is used to determine the number of product or service a company has to sell to cover its total cost. Above the breakeven point the company will earn profit while below it the company will earn loss.

To calculate: BEP in units and in $.

8.

To determine

Introduction: Break even analysis is used to determine the number of product or service a company has to sell to cover its total cost. Above the breakeven point the company will earn profit while below it the company will earn loss.

To calculate: The margin of safety.

Expert Solution & Answer

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Answer 3

Question

Chapter IE, Problem 3E

1.

To determine

Introduction: Absorption costing is a technique for calculating cost of product by taking indirect expense and direct cost into consideration.

To calculate: Net operating income using absorption costing.

2.

To determine

Introduction: The variability between present value of all cash outflow and present value of all cash inflow is known as net present value (NPV). The discount rate at which the net present value is equal to zero is knows as Internal rate of return (IRR). The ratio of income and capital gain is known as simple rate of return.

To calculate: Income statement using absorption costing, after improving quality of raw material.

3.

To determine

Introduction: The variability between present value of all cash outflow and present value of all cash inflow is known as net present value (NPV). The discount rate at which the net present value is equal to zero is knows as Internal rate of return (IRR). The ratio of income and capital gain is known as simple rate of return.

To calculate: Income statement using absorption costing, after increasing selling price.

4.

To determine

Introduction: The variability between present value of all cash outflow and present value of all cash inflow is known as net present value (NPV). The discount rate at which the net present value is equal to zero is knows as Internal rate of return (IRR). The ratio of income and capital gain is known as simple rate of return.

To prepare: Income statement using absorption costing

5.

To determine

Introduction: The variability between present value of all cash outflow and present value of all cash inflow is known as net present value (NPV). The discount rate at which the net present value is equal to zero is knows as Internal rate of return (IRR). The ratio of income and capital gain is known as simple rate of return.

To calculate: Income statement using absorption costing, after improving quality of raw material.

6.

To determine

Introduction: The variability between present value of all cash outflow and present value of all cash inflow is known as net present value (NPV). The discount rate at which the net present value is equal to zero is knows as Internal rate of return (IRR). The ratio of income and capital gain is known as simple rate of return.

To calculate: Income statement using absorption costing, after increasing selling price.

7.

To determine

Introduction: Break even analysis is used to determine the number of product or service a company has to sell to cover its total cost. Above the breakeven point the company will earn profit while below it the company will earn loss.

To calculate: BEP in units and in $.

8.

To determine

Introduction: Break even analysis is used to determine the number of product or service a company has to sell to cover its total cost. Above the breakeven point the company will earn profit while below it the company will earn loss.

To calculate: The margin of safety.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Chapter IE, Problem 3E

1.

To determine

Introduction: Absorption costing is a technique for calculating cost of product by taking indirect expense and direct cost into consideration.

To calculate: Net operating income using absorption costing.

2.

To determine

Introduction: The variability between present value of all cash outflow and present value of all cash inflow is known as net present value (NPV). The discount rate at which the net present value is equal to zero is knows as Internal rate of return (IRR). The ratio of income and capital gain is known as simple rate of return.

To calculate: Income statement using absorption costing, after improving quality of raw material.

3.

To determine

Introduction: The variability between present value of all cash outflow and present value of all cash inflow is known as net present value (NPV). The discount rate at which the net present value is equal to zero is knows as Internal rate of return (IRR). The ratio of income and capital gain is known as simple rate of return.

To calculate: Income statement using absorption costing, after increasing selling price.

4.

To determine

Introduction: The variability between present value of all cash outflow and present value of all cash inflow is known as net present value (NPV). The discount rate at which the net present value is equal to zero is knows as Internal rate of return (IRR). The ratio of income and capital gain is known as simple rate of return.

To prepare: Income statement using absorption costing

5.

To determine

Introduction: The variability between present value of all cash outflow and present value of all cash inflow is known as net present value (NPV). The discount rate at which the net present value is equal to zero is knows as Internal rate of return (IRR). The ratio of income and capital gain is known as simple rate of return.

To calculate: Income statement using absorption costing, after improving quality of raw material.

6.

To determine

Introduction: The variability between present value of all cash outflow and present value of all cash inflow is known as net present value (NPV). The discount rate at which the net present value is equal to zero is knows as Internal rate of return (IRR). The ratio of income and capital gain is known as simple rate of return.

To calculate: Income statement using absorption costing, after increasing selling price.

7.

To determine

Introduction: Break even analysis is used to determine the number of product or service a company has to sell to cover its total cost. Above the breakeven point the company will earn profit while below it the company will earn loss.

To calculate: BEP in units and in $.

8.

To determine

Introduction: Break even analysis is used to determine the number of product or service a company has to sell to cover its total cost. Above the breakeven point the company will earn profit while below it the company will earn loss.

To calculate: The margin of safety.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 5

Chapter IE, Problem 3E

1.

To determine

Introduction: Absorption costing is a technique for calculating cost of product by taking indirect expense and direct cost into consideration.

To calculate: Net operating income using absorption costing.

2.

To determine

Introduction: The variability between present value of all cash outflow and present value of all cash inflow is known as net present value (NPV). The discount rate at which the net present value is equal to zero is knows as Internal rate of return (IRR). The ratio of income and capital gain is known as simple rate of return.

To calculate: Income statement using absorption costing, after improving quality of raw material.

3.

To determine

Introduction: The variability between present value of all cash outflow and present value of all cash inflow is known as net present value (NPV). The discount rate at which the net present value is equal to zero is knows as Internal rate of return (IRR). The ratio of income and capital gain is known as simple rate of return.

To calculate: Income statement using absorption costing, after increasing selling price.

4.

To determine

Introduction: The variability between present value of all cash outflow and present value of all cash inflow is known as net present value (NPV). The discount rate at which the net present value is equal to zero is knows as Internal rate of return (IRR). The ratio of income and capital gain is known as simple rate of return.

To prepare: Income statement using absorption costing

5.

To determine

Introduction: The variability between present value of all cash outflow and present value of all cash inflow is known as net present value (NPV). The discount rate at which the net present value is equal to zero is knows as Internal rate of return (IRR). The ratio of income and capital gain is known as simple rate of return.

To calculate: Income statement using absorption costing, after improving quality of raw material.

6.

To determine

Introduction: The variability between present value of all cash outflow and present value of all cash inflow is known as net present value (NPV). The discount rate at which the net present value is equal to zero is knows as Internal rate of return (IRR). The ratio of income and capital gain is known as simple rate of return.

To calculate: Income statement using absorption costing, after increasing selling price.

7.

To determine

Introduction: Break even analysis is used to determine the number of product or service a company has to sell to cover its total cost. Above the breakeven point the company will earn profit while below it the company will earn loss.

To calculate: BEP in units and in $.

8.

To determine

Introduction: Break even analysis is used to determine the number of product or service a company has to sell to cover its total cost. Above the breakeven point the company will earn profit while below it the company will earn loss.

To calculate: The margin of safety.

Answer 6

Chapter IE, Problem 3E

1.

To determine

Introduction: Absorption costing is a technique for calculating cost of product by taking indirect expense and direct cost into consideration.

To calculate: Net operating income using absorption costing.

Answer 7

Chapter IE, Problem 3E

1.

To determine

Introduction: Absorption costing is a technique for calculating cost of product by taking indirect expense and direct cost into consideration.

To calculate: Net operating income using absorption costing.

Answer 8

2.

To determine

Introduction: The variability between present value of all cash outflow and present value of all cash inflow is known as net present value (NPV). The discount rate at which the net present value is equal to zero is knows as Internal rate of return (IRR). The ratio of income and capital gain is known as simple rate of return.

To calculate: Income statement using absorption costing, after improving quality of raw material.

Answer 9

2.

To determine

Introduction: The variability between present value of all cash outflow and present value of all cash inflow is known as net present value (NPV). The discount rate at which the net present value is equal to zero is knows as Internal rate of return (IRR). The ratio of income and capital gain is known as simple rate of return.

To calculate: Income statement using absorption costing, after improving quality of raw material.

Answer 10

3.

To determine

Introduction: The variability between present value of all cash outflow and present value of all cash inflow is known as net present value (NPV). The discount rate at which the net present value is equal to zero is knows as Internal rate of return (IRR). The ratio of income and capital gain is known as simple rate of return.

To calculate: Income statement using absorption costing, after increasing selling price.

Answer 11

3.

To determine

Introduction: The variability between present value of all cash outflow and present value of all cash inflow is known as net present value (NPV). The discount rate at which the net present value is equal to zero is knows as Internal rate of return (IRR). The ratio of income and capital gain is known as simple rate of return.

To calculate: Income statement using absorption costing, after increasing selling price.

Answer 12

4.

To determine

Introduction: The variability between present value of all cash outflow and present value of all cash inflow is known as net present value (NPV). The discount rate at which the net present value is equal to zero is knows as Internal rate of return (IRR). The ratio of income and capital gain is known as simple rate of return.

To prepare: Income statement using absorption costing

Answer 13

4.

To determine

Introduction: The variability between present value of all cash outflow and present value of all cash inflow is known as net present value (NPV). The discount rate at which the net present value is equal to zero is knows as Internal rate of return (IRR). The ratio of income and capital gain is known as simple rate of return.

To prepare: Income statement using absorption costing

Answer 14

5.

To determine

Introduction: The variability between present value of all cash outflow and present value of all cash inflow is known as net present value (NPV). The discount rate at which the net present value is equal to zero is knows as Internal rate of return (IRR). The ratio of income and capital gain is known as simple rate of return.

To calculate: Income statement using absorption costing, after improving quality of raw material.

Answer 15

5.

To determine

Introduction: The variability between present value of all cash outflow and present value of all cash inflow is known as net present value (NPV). The discount rate at which the net present value is equal to zero is knows as Internal rate of return (IRR). The ratio of income and capital gain is known as simple rate of return.

To calculate: Income statement using absorption costing, after improving quality of raw material.

Answer 16

6.

To determine

Introduction: The variability between present value of all cash outflow and present value of all cash inflow is known as net present value (NPV). The discount rate at which the net present value is equal to zero is knows as Internal rate of return (IRR). The ratio of income and capital gain is known as simple rate of return.

To calculate: Income statement using absorption costing, after increasing selling price.

Answer 17

6.

To determine

Introduction: The variability between present value of all cash outflow and present value of all cash inflow is known as net present value (NPV). The discount rate at which the net present value is equal to zero is knows as Internal rate of return (IRR). The ratio of income and capital gain is known as simple rate of return.

To calculate: Income statement using absorption costing, after increasing selling price.

Answer 18

7.

To determine

Introduction: Break even analysis is used to determine the number of product or service a company has to sell to cover its total cost. Above the breakeven point the company will earn profit while below it the company will earn loss.

To calculate: BEP in units and in $.

Answer 19

7.

To determine

Introduction: Break even analysis is used to determine the number of product or service a company has to sell to cover its total cost. Above the breakeven point the company will earn profit while below it the company will earn loss.

To calculate: BEP in units and in $.

Answer 20

8.

To determine

Introduction: Break even analysis is used to determine the number of product or service a company has to sell to cover its total cost. Above the breakeven point the company will earn profit while below it the company will earn loss.

To calculate: The margin of safety.

Answer 21

8.

To determine

Introduction: Break even analysis is used to determine the number of product or service a company has to sell to cover its total cost. Above the breakeven point the company will earn profit while below it the company will earn loss.

To calculate: The margin of safety.

Answer 22

Expert Solution & Answer

Answer 23

Expert Solution & Answer

Answer 24

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Check out a sample textbook solution

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Answer 25

Ch. IE - Activity Variance, Spending Variance, Materials...Ch. IE - Prob. 2E Ch. IE - Prob. 3E Ch. IE - Capital Budgeting, Return on Investment, Residual...Ch. IE - Prob. 6E Ch. IE - Cost-Volume-Profit Relationships, Variable Costing...

Absorption costing is a technique for calculating cost of product by taking indirect expense and direct cost into consideration. To calculate: Net operating income using absorption costing.

Solution Summary: The author explains that absorption costing is a technique for calculating cost of product by taking indirect expense and direct cost into consideration.

Concept explainers

Videos

Introduction: Absorption costing is a technique for calculating cost of product by taking indirect expense and direct cost into consideration.

To calculate: Net operating income using absorption costing.

Introduction: Break even analysis is used to determine the number of product or service a company has to sell to cover its total cost. Above the breakeven point the company will earn profit while below it the company will earn loss.

To calculate: BEP in units and in $.

Introduction: Break even analysis is used to determine the number of product or service a company has to sell to cover its total cost. Above the breakeven point the company will earn profit while below it the company will earn loss.

To calculate: The margin of safety.

Want to see the full answer?

Chapter IE Solutions

Absorption costing is a technique for calculating cost of product by taking indirect expense and direct cost into consideration. To calculate: Net operating income using absorption costing.

Solution Summary: The author explains that absorption costing is a technique for calculating cost of product by taking indirect expense and direct cost into consideration.

Concept explainers

Videos

Introduction: Absorption costing is a technique for calculating cost of product by taking indirect expense and direct cost into consideration. To calculate: Net operating income using absorption costing.

Introduction: Break even analysis is used to determine the number of product or service a company has to sell to cover its total cost. Above the breakeven point the company will earn profit while below it the company will earn loss. To calculate: BEP in units and in $.

Introduction: Break even analysis is used to determine the number of product or service a company has to sell to cover its total cost. Above the breakeven point the company will earn profit while below it the company will earn loss. To calculate: The margin of safety.

Want to see the full answer?

Chapter IE Solutions

Introduction: Absorption costing is a technique for calculating cost of product by taking indirect expense and direct cost into consideration.

To calculate: Net operating income using absorption costing.

Introduction: Break even analysis is used to determine the number of product or service a company has to sell to cover its total cost. Above the breakeven point the company will earn profit while below it the company will earn loss.

To calculate: BEP in units and in $.

Introduction: Break even analysis is used to determine the number of product or service a company has to sell to cover its total cost. Above the breakeven point the company will earn profit while below it the company will earn loss.

To calculate: The margin of safety.