Biblio Files Company is the chief competitor of Cover-to-Cover Company in the bookshelf business. Biblio Files is analyzing its manufacturing costs, and has compiled the following data for the first six months of the year. After reviewing the data, answer questions (1) through (3) that follow. Month Number of Units Produced Total Cost January 4,360 $65,600 February 250 $6,250 March 1,000 $15,000 April 5,000 $77,500 May 1,750 $32,500 June 3,015 $48,000 1. From the data previously provided, help Biblio Files Company estimate the fixed and variable portions of its total costs using the High-Low Method. Recall that Total Costs = (Variable Cost Per Unit x Units Produced) + Fixed Cost. Complete the following table. Total Fixed Cost Variable Cost per Unit $750 X $20.00 X

Biblio Files Company is the chief competitor of Cover-to-Cover Company in the bookshelf business. Biblio Files is analyzing its manufacturing costs, and has compiled the following data for the first six months of the year. After reviewing the data, answer questions (1) through (3) that follow. Month Number of Units Produced Total Cost January 4,360 $65,600 February 250 $6,250 March 1,000 $15,000 April 5,000 $77,500 May 1,750 $32,500 June 3,015 $48,000 1. From the data previously provided, help Biblio Files Company estimate the fixed and variable portions of its total costs using the High-Low Method. Recall that Total Costs = (Variable Cost Per Unit x Units Produced) + Fixed Cost. Complete the following table. Total Fixed Cost Variable Cost per Unit $750 X $20.00 X

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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High Country, Incorporated, produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant’s operation: Beginning inventory 0 Units produced 49,000 Units sold 44,000 Selling price per unit $ 84 Selling and administrative expenses: Variable per unit $ 4 Fixed (per month) $ 561,000 Manufacturing costs: Direct materials cost per unit $ 15 Direct labor cost per unit $ 6 Variable manufacturing overhead cost per unit $ 3 Fixed manufacturing overhead cost (per month) $ 735,000 Management is anxious to assess the profitability of the new camp cot during the month of May. Required: 1. Assume that the company uses absorption costing. a. Calculate the unit product cost. b. Prepare an income statement for May. 2. Assume that the company uses variable costing. a. Calculate the…
Kenzi, a manufacturer of kayaks, began operations this year. During this year, the company produced 1,050 kayaks and sold 800 at a price of $1,050 each. At year-end, the company reported the following income statement information using absorption costing. Sales (800 × $1,050) $ 840,000 Cost of goods sold (800 × $450) 360,000 Gross profit 480,000 Selling and administrative expenses 220,000 Income $ 260,000 Additional Information a. Product cost per kayak under absorption costing totals $450, which consists of $350 in direct materials, direct labor, and variable overhead costs and $100 in fixed overhead cost. Fixed overhead of $100 per unit is based on $105,000 of fixed overhead per year divided by 1,050 kayaks produced.b. The $220,000 in selling and administrative expenses consists of $85,000 that is variable and $135,000 that is fixed.Prepare an income statement for the current year under variable costing.
Adams Company makes a single product that it sells for $8.45 per unit. Provided below is information about this product for the past nine months: Month January February March April May June July August September Total Cost Incurred $28,730 $24,580 $30,660 $16,890 $19,120 $20,610 $17,490 $25,380 $15,540 Units Sold 6,400 5,150 6,900 2,950 3,600 4,150 3,350 5,500 2,700 Adams Company expects to sell 4,620 units of this product during October. Using the high-low method, calculate Adams Company's expected margin of safety for October.
Manila Company manufactures one main product and two by-products, A and B. The following are data from the month of May:
The annual data that follow pertain to Carl's Crazy Eyewear, a manufacturer of swimming goggles. (Carl's Crazy Eyewear had no beginning Finished Goods Inventory in January.) (Click the icon to view the data.) Read the requirements. Data table Number of goggles produced Number of goggles sold Sales price per unit Variable manufacturing cost per unit Sales commission cost per unit Fixed manufacturing overhead Fixed selling and administrative costs Print Done $ 235,000 195,000 30 7 3 940,000 230,000 Requirements 1. Prepare both conventional (absorption costing) and contribution margin (variable costing) income statements for Carl's Crazy Eyewear for the year ended December 31. 2. Which statement shows the higher operating income? Why? 3. Carl's Crazy Eyewear's marketing vice president believes a new sales promotion that costs $360,000 would increase sales to 225,000 goggles. Should the company go ahead with the promotion? Give your reasoning. Print Done - X ember 31. (Round intermediary
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High Country, Incorporated, produces and sells many recreational products. The company just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant's operation: Beginning inventory Units produced Units sold Selling price per unit Selling and administrative expenses: Variable per unit Fixed (per month) Manufacturing costs: Direct materials cost per unit Direct labor cost per unit Variable manufacturing overhead cost per unit Fixed manufacturing overhead cost (per month) Required: 1. Assume the company uses absorption costing. a. Calculate the camp cot's unit product cost. b. Prepare an income statement for May. 2. Assume the company uses variable costing. a. Calculate the camp cot's unit product cost. b. Prepare a contribution format income statement for May. 0 46,000 41,000 $83 $4 $ 565,000 $ 16 $ 8 $1 $ 782,000 Complete this question by entering your answers in…
Kenzi, a manufacturer of kayaks, began operations this year. During this year, the company produced 1,000 kayaks and sold 750 at a price of $1,000 each. At year-end, the company reported the following income statement information using absorption costing. Sales (750 x $1,000) Cost of goods sold (750 x $425) Gross profit Selling and administrative expenses Income Additional Information $ 750,000 318,750 431,250 240,000 $ 191,250 a. Product cost per kayak under absorption costing totals $425, which consists of $325 in direct materials, direct labor, and variable overhead costs and $100 in fixed overhead cost. Fixed overhead of $100 per unit is based on $100,000 of fixed overhead per year divided by 1,000 kayaks produced. b. The $240,000 in selling and administrative expenses consists of $95,000 that is variable and $145,000 that is fixed. Prepare an income statement for the current year under variable costing. Income KENZI Income Statement (Variable Costing)
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Brown Printing, a small family-owned business, began operations on March 1, manufacturing premium quality books. The owners have expertise in printing but no accounting knowledge or experience. The company’s independent accountant compiled the following data for the month of March. They have also requested an income statement. Sales price $90 per book Number of units produced 15,000 books Number of units sold 10,000 books Direct materials cost $15 per book Direct labor cost $6 per book Variable manufacturing overhead $4 per book Fixed manufacturing overhead $240,000 per month Selling cost $3 per book Administrative expenses $160,000 per month The owners want to understand these numbers and how they can use the information to run the business. 1a. Calculate the unit cost of goods sold using absorption costing. 1b Prepare the income statement for March using absorption costing. 2a. Identify and describe two advantages of…
Use this information for Timmer Corporation to answer the question that follows. Timmer Corporation just started business in January. There were no beginning inventories. During the year, it manufactured 11,700 units of product and sold 8,000 units. The selling price of each unit was $25. Variable manufacturing costs were $3 per unit, and variable selling and administrative costs were $4 per unit. Fixed manufacturing costs were $23,400 and fixed selling and administrative costs were $7,900. What would Timmer's income from operations be for the year using absorption costing? O a. $120,100 b. $128,000 c. $96,080 Od. $144,000