Heritage Company manufactures and sells desk sets with a wholesale price of $275. The company has sold approximately 4,000 desk sets in the previous and current year, but has the capacity to make more without adding another shift. Annual costs associated with making 4,000 desks: Wood, glass, brass, other materials 430,000 General office salaries 110,000 70,000 60,000 105,000 2,000 18,000 90,000 100,000 6,000 Factory supervision Sales commissions Depreciation, factory building Depreciation, office equipment Indirect materials, factory Factory cutting and assembly labor Advertising Insurance, factory General office billing supplies Property taxes, factory Utilities, factory 4,000 $ 20,000 45,000
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- Pattison Products, Inc., began operations in October and manufactured 40,000 units during the month with the following unit costs: Fixed overhead per unit = 280,000/40,000 units produced = 7. Total fixed factory overhead is 280,000 per month. During October, 38,400 units were sold at a price of 24, and fixed marketing and administrative expenses were 130,500. Required: 1. Calculate the cost of each unit using absorption costing. 2. How many units remain in ending inventory? What is the cost of ending inventory using absorption costing? 3. Prepare an absorption-costing income statement for Pattison Products, Inc., for the month of October. 4. What if November production was 40,000 units, costs were stable, and sales were 41,000 units? What is the cost of ending inventory? What is operating income for November?Chapter 6: A Closer Look on Cost Accounting The company makes 2,350 units of product X a year, requiring a total os 3.300 machine hours, 250 orders and 200 inspection hours per year. The product's direct material cost is P201.50 and its direct labor cost in P211.11 per unit. The product sells for P590 per unit. According to the activity-based costing system, the gross margin for product X is? 423,087.50 b. 350,435.50 c. 416,890 d. None of the choice a. 56. The following information is available for Mary Corp. Activity Pool Setups Quality Inspections Assembly (direct labor hour) What is the activity rate for setups? Activity Base 50,000 120,000 400,000 Budgeted Amount 300,000 600,000 2,000,000 a. P5.09 c. РО.75 d. P58.00 b. Рб.00 The activity rate for quality inspection is: с. Рб.00 d. P5.09 a. P5.29 b. P5.00Question 5.1 Stark and Company would like to evaluate one of the product lines that they sell to the defense department. Every month the Stark and Company produce an identical number of units, although the sales in units differ from month to month. Selling price Units in beginning inventory $105 110 Units produced 6,400 Units sold 6,100 Units in ending inventory Variable costs per unit: 410 Direct materials $62 Direct labour $48 Variable manufacturing overhead Variable selling and administrative Fixed costs: $3 $7 Fixed manufacturing overhead Fixed selling and administrative $64,000 $35,600 Submission Instructions: 1. Under variable costing, identify the unit product cost for the month. 2. What is the unit product cost for the month under absorption costing? 3. Prepare an income statement for the month using the contribution format and the variable costing method. 4. Prepare an income statement for the month using the absorption costing method.
- Cornerstones of Cost Management 4th Ed. - Chapter 4 Scenario IV: Goodmark Company produces two types of birthday cards: scented and regular. Expected product data for the coming year are given below. Overhead costs are identified by activity. Scented Cards Regular Cards Total Units produced 20,000 200,000 - Prime costs $160,000 $1,500,000 $1,660,000 Direct labor hours 20,000 160,000 180,000 Number of setups 60 40 100 Machine hours 10,000 80,000 90,000 Inspection hours 2,000 16,000 18,000 Number of moves 180 120 300 Overhead costs: Setting up equipment $240,000 Moving materials 120,000 Machining 200,000 Inspecting products 160,000 Required: 1. Answer the following questions: a. Calculate the activity consumption ratios for Scented cards (round to two decimal places). Setups: Moving materials: Machining: Inspection: b. If only one rate based on direct labor hours were used to assign overhead, Scented Cards would receive…Bush Manufacturing has 31,000 labor hours available for producing M and N. Consider the following information: Product M Product N Required labor time (hrs) 2Maximum demand 6,500 8,000 Contribution margin per unit $5.00 $5.70 If Bush follows proper managerial accounting practices in terms of setting a production schedule, how much contribution margin would the company expect to generate? A. $31,450.B. $63,100.C.$66,700.D. $78,100.E. None of these.PROBLEM 2. The management of B Company uses the following unit costs for the one product it manufactures Projected Cost Per Unit Direct Materials P30.00 Direct Labor 19.00 Variable Overhead 6.00 Fixed overhead (based on 10,000 units per month) 5.00 Variable selling and administrative Fixed selling and administrative (based on 10,000 units per month) 4.00 2.80 Units Beginning Inventory 2,000 Production 9,000 Available 11,000 Sales 7,500 Ending Inventory 3,500 REQUIRED: prepare projected income statements for June 2018 for management purposes under each of the following product costing methods: 1. Absorption costing with all variances charged to cost of goods sold for each month. 2. Direct (variable) costing 3. Supporting schedules calculating inventoriable production costs per unit. Ignore income taxes.
- Lynch Company manufactures and sells a single product. The following costs were incurred during the company's first year of operations: Variable costs per unit: Manufacturing: Direct materials $ 10 Direct labor $7 $3 Variable manufacturing overhead Variable selling and administrative Fixed costs per year: $3 Fixed manufacturing overhead $ 380,000 Pixed selling and administrative $ 290,000 During the year, the company produced 38,000 units and sold 18,000 units. The selling price of the company's product is $61 per unit. Required: 1. Assume that the company uses absorption costing: a. Compute the unit product cost. b. Prepare an income statement for the year. 2. Assume that the company uses variable costing: a. Compute the unit product cost. A b. Prepare an income statement for the year. Complete this question by entering your answers in the tabs below. Req 1A Reg 28 Reg 2A Req 18 Compute the unit product cost. Assume that the company uses absorption costing. During the year, the…Problem 1 The J. Page Furniture Company has the following information available regarding costs at various levels of monthly production: Production volume (units) 16,000 22,000 $70,000 66,000 21,000 $96,250 90,750 26,500 Direct materials Direct labor Indirect materials Supervisors' salaries 12,000 12,000 Depreciation on plant and equipment 10,000 10,000 32,000 17,000 3,200 Maintenance 44,000 23,750 Utilities Insurance on plant and equipment 3,200 Property taxes on plant and equipment 4,000 4,500 Total $235,200 $310,950 The company's total monthly production capacity is 30,000 units. Required a. Using the high-low method, develop a cost estimation equation for total monthly production costs using number of units produced as the "cost driver". b. Using your equation from b. above, predict total costs for a monthly production volume of 25,000 units. c. Average total cost for 16,000 units = ($235,200/16,000 units) = $14.69, conceptually, why shouldn't the company use the average cost of…Question No. 1Panther Tyres Inc., produces 50,000 units each day, and the average number of units in work in process is 200,000. The average annual inventory carrying cost percentage is 25%, and the average work in process is $1,000,000.Required:Determine the throughput time, Compute the annual carrying costs, If the same daily output can be achieved while reducing the work in process by 50%, determine the new throughput time.What has happened to the velocity of production?AND Compute the annual carrying costs.
- Question No. 1-1 The HASF Company has an annual plant capacity of 50,000 units. Predicted data on sales and costs are given below. Sales (50 per unit) 1,000,000 Manufacturing cost Variable (material labor and overhead) 40 per unit Fixed overhead 30,000 Selling and administrative expenses Variable (sales commission RS 0.5 per unit) 2 per unit Fixed 7,000 A special order has been received from outside for 5,000 units at a selling price of 45 per unit this order will no effect on regular sales. The usual sales commission on this order will be reduced by one half. Required: Should the company accept / reject the order? Keeping in view the above answer narrate rationale to support your answerpuestion 5.3 DC-Marvel would like to evaluate one of the product lines that they sell to defense department. Every month the company produces an identical number of units, although the sales in units differ from month to month. Product B Selling price $109 Units in beginning inventory Units produced Units sold 360 6,900 7,200 Variable costs per unit: $29 $31 Direct materials Direct labour Variable manufacturing overhead $2 Variable selling and administrative $7 Fixed costs: $53,500 $145,000 Fixed manufacturing overhead Fixed selling and administrative Submission Instructions: 1. Compute the Contribution Margin. 2. Compute the Operating Income under Variable Costing. 3. Prepare a reconciliation from your Operating Income under Variable Costing to Operating Income under Absorption Costing. Show the differences between each method.Question 6 Amundsen Company makes 60,000 units per year of a part it uses in the products it manufactures. The unit product cost of this part is computed as follows: Direct Materials Direct Labor Variable Manufacturing Overhead Fixed Manufacturing Overhead Variable Selling Fixed Selling Total $ 10.10 $17.40 $ 2.70 $15.00 $ 2.75 $ 3.25 $51.20 An outside supplier has offered to sell the company all of these parts it needs. If the company accepts this offer, the facilities now being used to make the part would be idle and fixed manufacturing overhead would be reduced by 80% of current cost. The variable selling costs would be reduced to 40% of current cost. Required: What is the maximum amount the company should be willing to pay an outside supplier per unit for the part?