Sharon is studying the working papers from her client's 2025 income statement because her manager wants her to reconstruct that same income statement without the benefit of first seeing the finished product. She knows the client uses standard costing within its accounting system, but she has to figure out which inventory costing method it uses. The working paper shows the following details. No other variances were reported, and the prior year per-unit costs were the same as the 2025 per-unit costs. Gross margin Sales volume Budgeted production Beginning FG Inventory Ending FG Inventory Fixed-MOH volume variance (unfavorable) Operating income Sales (a1) Your answer is correct. (d) Absorption Costing ✓ eTextbook and Media Your answer is incorrect. Which inventory costing method did the client use in 2025, variable or absorption? $6,500 Operating income $ eTextbook and Media 180 units Save for Later 200 units Show Transcribed Text 33 units 36 units $340 $570 $16,200 I If the client had used the other costing method (not the one determined in part (a)), how much income would it have reported last year? G Attempts: 1 of 3 used Attempts: 2 of 3 used Submit Answer

Sharon is studying the working papers from her client's 2025 income statement because her manager wants her to reconstruct that same income statement without the benefit of first seeing the finished product. She knows the client uses standard costing within its accounting system, but she has to figure out which inventory costing method it uses. The working paper shows the following details. No other variances were reported, and the prior year per-unit costs were the same as the 2025 per-unit costs. Gross margin Sales volume Budgeted production Beginning FG Inventory Ending FG Inventory Fixed-MOH volume variance (unfavorable) Operating income Sales (a1) Your answer is correct. (d) Absorption Costing ✓ eTextbook and Media Your answer is incorrect. Which inventory costing method did the client use in 2025, variable or absorption? $6,500 Operating income $ eTextbook and Media 180 units Save for Later 200 units Show Transcribed Text 33 units 36 units $340 $570 $16,200 I If the client had used the other costing method (not the one determined in part (a)), how much income would it have reported last year? G Attempts: 1 of 3 used Attempts: 2 of 3 used Submit Answer

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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1. Consider (a) actual costing, (b) normal costing, and (c) a mixed costing approach, which is a variation from normal costing where budgeted rates for direct costs are used. For each of the costing approaches mentioned, calculate the direct-cost rate and the indirect-cost rate per professional labor-hour for 2019. 2. Koffler Legal & Consulting Services PLLC.'s provided a legal consulting service to Magnolia Cosmetics at 2019. This job was budgeted to take 150 hours of professional labor time to complete. However, the actual professional labor time spent on the job was found to be 160 hours. Considering this information, compute the cost of the consulting service provided to Magnolia Cosmetics using (a) actual costing, (b) normal costing, and (c) the mixed costing approach, which is a variation from normal costing where budgeted rates for direct costs are used. Explain any differences in the job cost.
Maria is studying the working papers from her client's 2025 income statement because her manager wants her to reconstruct that same income statement without the benefit of first seeing the finished product. She knows the client uses standard costing within its accounting system, but she has to figure out which inventory costing method it uses. The working paper shows the following details. No other variances were reported, and the prior year per-unit costs were the same as the 2025 per-unit costs. Gross margin Sales volume Budgeted production Beginning FG Inventory Ending FG Inventory Fixed-MOH volume variance (unfavorable) Operating income Sales $726 220 units 250 units 27 units 40 units $374 $640 $13,420
Jeremy Costa, owner of Costa Cabinets Inc., is preparing a bid on a job that requires $2,160 of direct materials, $2,160 of direct labor, and $1,080 of overhead. Jeremy normally applies a standard markup based on cost of goods sold to arrive at an initial bid price. He then adjusts the price as necessary in light of other factors (e.g., competitive pressure) Last year's income statement is as follows: Sales Cost of goods sold Gross margin Selling and administrative expenses Operating income Required: $136,500 77,805 $58,695 46,300 $12,395 1. Calculate the markup that Jeremy will use. Round your answer to one decimal place. 75 X % 2. What is Jeremy's initial bid price? Round your answer to the nearest dollar. Feedback ✓ Check My Work 1. Markup Percentage = Gross margin/Cost of Goods Sold 2. Add costs, Direct Material, Direct Labor and Overhead. Price using Markup = Cost per Unit+ (Cost per Unit x Markup Percentage)
Company, which uses the high-low method to analyze cost behavior, has determined that machine hours best predict the company's total utilities cost. The company's cost and machine hour usage data for the first six months of the year follow:
Mazoon Company decided to use the high-low cost estimation method to analyze its mixed costs. During the year 2020, the highest level of activity at peak season was in August (45,500 labor hours for a total cost of $121,450) and the lowest level of activity was in November (18,000 labor hours for a total cost of $80,200). What is the estimated total cost for Mazoon Company at an expected operating level of 32,000 labor hours? O a. None of the answers given O b. $48,000 c. O c. $105,700 O d. $101,200 e. $100,825 14:03 here to search A d0 ENG 15-04-2021 "bet se og up delete home end %23 96 & 7. num + backspace 3 4 6. 8. lock E Y 8 A home pg up 5 0 enter F J K pause C V MI ↑ shift 11 end alt ctri ins
Costing methods and variances, comprehensive. Rob Kapito, the controller of Blackstar Paint Supply Company, has been exploring a variety of internal accounting systems. Rob hopes to get the input of Blackstar’s board of directors in choosing one. To prepare for his presentation to the board, Rob applies four different cost accounting methods to the rm’s operating data for 2017. The four methods are actual absorption costing, normal absorption costing, standard absorption costing, and standard variable costing. With the help of a junior accountant, Rob prepares the following alternative income statements:
Identify the type of cost with reference to marginal costing principles: 1.A company had paid P100,000 to a marketing research company to find expected demand of the newly developed product of the company 2.A company has invested P45,00,000 in a project. The company could have earned 6,00,000 by investing the amount in proper government securities. 3.Accountant of a cloth factory paid P115,000 for water which has been used for washing the clothes.
Yohan Company has the following balances in its direct materials and direct labor variance accounts at year-end: Direct Materials Price Debit Credit Variance $1,000 Direct Materials Quantity $2,000 Variance $500 Direct Labor Rate Variance $3,000 Direct Labor Efficiency Variance Unadjusted Cost of Goods Sold equals $200,000. Which of the following would be FALSE when the year-end closing entry is made? O The Cost of Goods Sold account will be debited. O Adjusted Cost of Goods Sold will be $198,500. The Direct Labor Rate Variance account will be debited. O The Direct Materials Price Variance account will be credited.
Your company management wants you to compare the list of materials for HML and ABC analysis. For ABC classification they set the following criteria; Items below SR 100000 annual consumption shall be considered as C-items, items between SR 100000 and SR 150000 shall be considered as B-items, and items above SR 150000 shall be considered as A- items For HML classification they set the following criteria; Items below unit price SR 50 shall be considered as L-items, items between SR 50 and SR 100 unit price shall be considered as M-items, and items above SR 100 unit price shall be considered as H-items. Based upon your analysis suggest which classification shall be better for the company so that inventory can be optimized. Justify your answer. Item Consumption (Units) Annual Price/unit SR H/M/L Consumption (SR) Annual A/B/C A 2000 40 B 3000 65 C 2500 90…
Russell and Sons, a CPA firm, established the following standard labor cost data for completing what the firm referred to as a Class 2 tax return. Russell expected each Class 2 return to require 3.3 hours of labor at a cost of $39 per hour. The firm actually completed 650 Class 2 returns. Actual labor hours averaged 2.9 hours per return and actual labor cost amounted to $49 per hour. Required a. Determine the total labor variance and indicate whether it is favorable (F) or unfavorable (U). b. Determine the labor price variance and indicate whether it is favorable (F) or unfavorable (U). c. Determine the labor usage variance and indicate whether it is favorable (F) or unfavorable (U). Note: For all requirements, do not round intermediate calculations and select "None" if there is no effect (i.e., zero variance). a. Total labor variance b. Total labor price variance c. Total labor usage variance
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A company has set a new policy of acquiring materials from a second hand auction because it is cheaper than market price. Upon further investigations you have discovered that the materials from the auction are lower than the normal standard. How is the new policy likely to impact on the following variances: Material Usage: Choose... Labour Efficiency: Choose... Fixed overhead expenditure: Variable overhead efficiency: Previous page Choose... Choose... Next page