The following information applies to the questions displayed below.] Jorgansen Lighting, Incorporated, manufactures heavy-duty street lighting systems for municipalities.The company uses variable costing for internal management reports and absorption costing for external reports. The company provided the following data: Year 1 Year 2Year 3 Inventories Beginning (units) 210 150 190 Ending (units) 150 190 230 Variable costing net operating income $ 290,000 $ 269,000 $ 260,000 The company's fixedmanufacturing overhead per unit was constant at $550 for all three years. 2. Assume in Year 4 the company's variable costing net operating income was $250,000 and itsabsorption costing net operating income was $300,000. Did inventories increase or decrease during Year 4? How much fixed manufacturing overhead cost was deferred orreleased from inventory during Year 4 ?

The consideration of fixed manufacturing overhead expenses is the primary distinction between…

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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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! Required information [The following information applies to the questions displayed below.] Martinez Company's relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: Average Cost Per Unit Direct materials $ 5.10 Direct labor $ 2.60 $ Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense 1.60 $ 4.00 $ 2.10 $ 2.10 Sales commissions $ 1.10 Variable administrative expense $ 0.55 Required: 1. For financial accounting purposes, what is the total amount of product costs incurred to make 10,000 units? (Do not round intermediate calculations.) Answer is complete but not entirely correct. Total product cost $ 150,000 X
Required information [The following information applies to the questions displayed below.] Benton Corporation manufactures computer microphones, which come in two models: Standard and Premium. Data for a representative quarter for the two models follow: Units produced Standard 10,000 Premium 2,500 Production runs per quarter 50 25 Direct materials cost per unit $ 30 $ 64 Direct labor cost per unit 50 75 Manufacturing overhead in the plant has three main functions: supervision, setup labor, and incoming material inspection. Data on manufacturing overhead for a representative quarter follow: Supervision Setup labor Incoming inspection Total overhead $ 206,250 240,000 172,500 $ 618,750 Required: a. Compute the unit costs for the two products, Standard and Premium, using the current costing system at Benton (using direct labor costs as the allocation basis for overhead). b. Compute the unit costs for the two products, Standard and Premium, using the proposed ABC system at Benton. Note: For…
Jorgansen Lighting, Incorporated, manufactures heavy-duty street lighting systems for municipalities. The company uses variable costing for internal management reports and absorption costing for external reports. The company provided the following data: Exercise 6-3 (Algo) Part 1 Year 1 Inventories Beginning (units) Ending (units) 200 170 190 230 Variable costing net operating income $ 290,000 $ 260,000 The company's fixed manufacturing overhead per unit was constant at $570 for all three years. Required: 1. Calculate each year's absorption costing net operating income. Note: Enter any losses or deductions as a negative value. Year 2 Variable costing net operating income Add (deduct) fixed manufacturing overhead deferred in (released from) inventory under absorption costing Absorption costing net operating income 170 190 $ 279,000 Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes Year 1 Year 2 Year 3 Year 3
4
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Required information [The following information applies to the questions displayed below.] Jorgansen Lighting, Incorporated, manufactures heavy-duty street lighting systems for municipalities. The company uses variable costing for internal management reports and absorption costing for external reports. The company provided the following data: Year 1 Year 2 200 160 $ 290,000 Inventories Beginning (units) Ending (units) Variable costing net operating income The company's fixed manufacturing overhead per unit was constant at $560 for all three years. Year 3 160 180 $ 269,000 180 220 $ 250,000 2. Assume in Year 4 the company's variable costing net operating income was $240,000 and its absorption costing net operating income was $300,000. a. Did inventories increase or decrease during Year 4? b. How much fixed manufacturing overhead cost was deferred or released from inventory during Year 4?
Trying to find the activity based costing of the following for the allocated overhead
[The following information applies to the questions displayed below.] Martinez Company's relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense Average Cost Per Unit $ 5.10 $ 2.60 $ 1.60 $4.00 $ 2.10 $ 2.10 $ 1.10 $ 0.55 11. If 8,000 units are produced, what is the total amount of manufacturing overhead cost incurred to support this level of production? What is this total amount expressed on a per unit basis? Note: Round your "per unit" answer to 2 decimal places. Total manufacturing overhead cost Manufacturing overhead per unit
MTI makes three types of lawn tractors: M3100, M4100, and M6100. In the past, it allocated overhead to products using machine-hours. Last year, the company produced 10,000 units of M3100, 17,500 units of M4100, and 10,000 units of M6100 and had the following revenues and costs: MTI Income Statement M3100 M4 100 M6100 Total Sales revenue. Direct costs Direct materials .. Direct labor $9,000,000 $15,000,000 $13,500,000 $37,500,000 3,000,000 600,000 4,500,000 900,000 3,300,000 10,800,000 1,800,000 3,300,000 Variable overhead Setting up machines. Processing sales orders... Warehousing ..... Operating machines Shipping .. Contribution margin. Plant administration 2,400,000 1,800,000 2,400,000 1,200,000 900,000 $14,700,000 Gross profit..... 6,000,000 $ 8,700,000 MTI's controller has heard about activity-based costing and puts together an employee team to recommend cost allocation bases. The employee team recommends the following: Activity Cost Driver M3100 M4100 M6100 Setting up machines....…
Jorgansen Lighting. Incorporated, manufactures heavy-duty street lighting systems for municipalities. The company uses variable costing for Internal management reports and absorption costing for external reports. The company provided the following data: Inventories: Beginning (units) Ending (units) Variable costing net operating income Year 1 Year 2 Year 3 200 178 180 170 180 220 $ 1,080,400 $ 1,032,400 $ 996,400 The company's fixed manufacturing overhead per unit was constant at $560 for all three years. Exercise 7-3 (Static) Part 1 Required: 1. Calculate each year's absorption costing net operating Income. Note: Enter any losses or deductions as a negative value. Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes Variable costing net operating income Add (deduct) fixed manufacturing overhead deferred in (released from) inventory under absorption costing Absorption costing net operating income Year 1 Year 2 Year 3
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Required information [The following information applies to the questions displayed below.] Martinez Company's relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense Average Cost Per Unit $ 6.30 $ 3.80 $ 1.50 $ 4.00 $ 3.30 $ 2.00 $ 1.00 $ 0.50 3. If 8,000 units are produced and sold, what is the variable cost per unit produced and sold? (Round your answer to 2 decimal places.) X Answer is complete but not entirely correct. Variable cost per unit sold $ 12.50 X

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