ABC Manufacturing produces a single product with the following data for March: • Selling price: $200/unit Beginning inventory: 0 units ⚫ Units produced: 3,000 Units sold: 2,800 ⚫ Ending inventory: 200 units Variable costs per unit: ⚫ Direct materials: $60 • Direct labor: $25 ⚫ Variable manufacturing overhead: $15 ⚫ Variable selling and administrative: $12 Fixed costs: ⚫ Fixed manufacturing overhead: $120,000 ⚫ Fixed selling and administrative: $25,000 Calculate the total gross margin under absorption costing. A. $84,000 B. $98,000 C. $168,000 D. $126,000

Identify cost graphs The following cost graphs illustrate various types of cost behavior: For each of the following costs, identify the cost graph that best illustrates its cost behavior as the number of units produced increases: A. Total direct materials cost B. Electricity costs of 1,000 per month plus 0.10 per kilowatt-hour C. Per-unit cost of straight-line depreciation on factory equipment D. Salary of quality control supervisor, 20,000 per month E. Per-unit direct labor cost

During the week of August 21, Parley Manufacturing produced and shipped 4,000 units of its machine tools: 1,500 units of Tool SK1 and 2,500 units of Tool SK3. The cycle time for SK1 is 0.73 hour, and the cycle time for SK3 is 0.56 hour. The following costs were incurred: Required: 1. Assume that the value-stream costs and total units shipped apply only to one model (a single-product value stream). Calculate the unit cost, and comment on its accuracy. 2. Assume that Tool SK1 is responsible for 60% of the materials cost. Calculate the unit cost for Tool SK 1 and Tool SK3, and comment on its accuracy. Explain the rationale for using units shipped instead of units produced in the calculation. 3. Calculate the unit cost for the two models, using DBC. Explain when and why this cost is more accurate than the unit cost calculated in Requirement 2.

During the week of May 10, Hyrum Manufacturing produced and shipped 16,000 units of its aluminum wheels: 4,000 units of Model A and 12,000 units of Model B. The cycle time for Model A is 1.09 hours and for Model B is 0.47 hour. The following costs and production hours were incurred: Required: 1. Assume that the value-stream costs and total units shipped apply only to one model (a single-product value stream). Calculate the unit cost, and comment on its accuracy. 2. Assume that Model A is responsible for 40% of the materials cost. Calculate the unit cost for Models A and B, and comment on its accuracy. Explain the rationale for using units shipped instead of units produced in the calculation. 3. Calculate the unit cost for the two models, using DBC. Explain when and why this cost is more accurate than the unit cost calculated in Requirement 2.

The following product costs are available for Kellee Company on the production of eyeglass frames: direct materials, $32,125; direct labor, $23.50; manufacturing overhead, applied at 225% of direct labor cost; selling expenses, $22,225; and administrative expenses, $31,125. The direct labor hours worked for the month are 3,200 hours. A. What are the prime costs? B. What are the conversion costs? C. What is the total product cost? D. What is the total period cost? E. If 6.425 equivalent units are produced, what is the equivalent material cost per unit? F. What is the equivalent conversion cost per unit?

A company sells mulch by the cubic yard. Grade A much sells for $150 per cubic yard and has variable costs of $65 per cubic yard. The company has fixed expenses of $15,000 per month. In August, the company sold 240 cubic yards of Grade A mulch. A. Calculate the contribution margin per unit for Grade A mulch. B. Calculate the contribution margin ratio of the Grade A mulch. C. Prepare a contribution margin income statement for the month of August.

Standard unit cost and journal entries The normal capacity of Algonquin Adhesives Inc. is 40,000 direct labor hours and 20,000 units per month. A finished unit requires 6 lb of materials at an estimated cost of 2 per pound. The estimated cost of labor is 10.00 per hour. The plant estimates that overhead (all variable) for a month will be 40,000. During the month of March, the plant totaled 34,800 direct labor hours at an average rate of 9.50 an hour. The plant produced 18,000 units, using 105,000 lb of materials at a cost of 2.04 per pound. 1. Prepare a standard cost summary showing the standard unit cost. 2. Make journal entries to charge materials and labor to Work in Process.

On March 31, the end of the first month of operations, Barnard Inc. manufactured 15,000 units and sold 12,000 units. The following income statement was prepared, based on the variable costing concept: Determine the unit cost of goods manufactured, based on (a) the variable costing concept and (b) the absorption costing concept.

Entity Blue makes and sells two products, X and Y. Data for production and sales each month are as follows: Product X Product Y Sales demand 4,000 units 8,000 units Direct material cost/unit GHȼ20 GHȼ10 Direct labour hours/unit 0.1 hour 0.2 hours Direct labour cost/unit GHȼ2 GHȼ4 Production overheads are GHȼ500,000 each month. These are absorbed on a direct labour hour basis. An analysis of overhead costs suggests that there are four main activities that cause overhead expenditure. Activity Total cost Cost driver Total number Product X Product Y GHȼ Batch setup 100,000 No. of set-ups 20 10 10 Order handling 200,000 No. of orders 40 24 16 Machining 120,000 Machine hours 15,000 6,000 9,000 Quality control 80,000 No. of checks 32 18 14 500,000 Required: Calculate the full production costs for Product X and Product Y, using: (a) traditional absorption costing (b) activity based costing.

Intercontinental, inc., provides you with the following data for its single product   Sales price per unit                                                                                                           $ 50.00 Fixed costs (per month)   Selling, general, and administrative (SG&A)                                                              1,350,000   Manufacturing overhead                                                                                             2,700,000 Variable costs (per unit)   Direct labor                                                                                                                           7.00   Direct materials                                                                                                                   12.00   Manufacturing overhead                                                                                                      10.00   SG&A…