Please help me with show all calculation thanku (a1)Which inventory costing method did the client use in 2025, variable or absorption?(b)* Your answer is incorrect.How much did the client capitalize into inventory on a per-unit basis?Inventory cost per unit $ Margaret 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. Sheknows 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, andthe prior year per-unit costs were the same as the 2025 per-unit costs.Gross marginSales volumeBudgeted productionBeginning FG InventoryEnding FG InventoryFixed-MOH volume variance (unfavorable)Operating incomeSales$2,864190 units210 units27 units39 units$176$570$14,250

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Description: Please help me with show all calculation thanku (a1)Which inventory costing method did the client use in 2025, variable or absorption?(b)* Your answer is incorrect.How much did the client capitalize into inventory on a per-unit basis?Inventory cost p

As we can see in the image above, Gross Margin is given which is calculated by subtracting cost of…

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Which inventory costing method did the client use in 2025, variable or absorption? (b) X Your answer is incorrect. How much did the client capitalize into inventory on a per-unit basis? Inventory cost per unit $ LA

Which inventory costing method did the client use in 2025, variable or absorption? (b) X Your answer is incorrect. How much did the client capitalize into inventory on a per-unit basis? Inventory cost per unit $ LA

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter3: Cost Behavior

Section: Chapter Questions

Problem 34P: Kimball Company has developed the following cost formulas:...

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William needs to show his supervisor how COGS, as reported on the company's income statement, might differ depending on the costing system used. Regardless of which inventory costing system the company uses, standard costs are incorporated into the analysis. The variable manufacturing and variable operating costs were $16 per unit and $4 per unit, respectively. Budgeted and actual fixed-MOH cost was $24.200, while fixed operating costs were $14,000. The company budgeted for 2.200 units but produced and sold 2.300 units this year. Any fixed-MOH volume variance is to be written off directly to COGS. William knew there were no variable cost variances. Show the COGS that would be presented on the company's income statement under (a) variable costing and (b) absorption costing. COGS $ Variable Costing $ Absorption Costing
Carol 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 $4,040 Absorption Costing 200 units 230 units 33 units 43 units $360 $640 $16,200 Which inventory costing method did the client use in 2025, variable or absorption? How much did the client capitalize into inventory on a per-unit basis? LA Inventory cost per unit $
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
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? $6,500 180 units Operating income $ 200 units eTextbook and Media 33 units Save for Later 36 units Show Transcribed Text $340 $570 $16.200 G If the client had…
Gary needs to show his supervisor how COGS, as reported on the company's income statement, might differ depending on the costing system used. Regardless of which inventory costing system the company uses, standard costs are incorporated into the analysis. The variable manufacturing and variable operating costs were $18 per unit and $3 per unit, respectively. Budgeted and actual fixed-MOH cost was $18,000, while fixed operating costs were $12,200. The company budgeted for 1.800 units but produced and sold 1,900 units this year. Any fixed-MOH volume variance is to be written off directly to COGS. Gary knew there were no variable cost variances. Show the COGS that would be presented on the company's income statement under (a) variable costing and (b) absorption costing. Variable Costing COGS $ $ Absorption Costing
Kimball Company has developed the following cost formulas: Materialusage:Ym=80X;r=0.95Laborusage(direct):Yl=20X;r=0.96Overheadactivity:Yo=350,000+100X;r=0.75Sellingactivity:Ys=50,000+10X;r=0.93 where X=Directlaborhours The company has a policy of producing on demand and keeps very little, if any, finished goods inventory (thus, units produced equals units sold). Each unit uses one direct labor hour for production. The president of Kimball Company has recently implemented a policy that any special orders will be accepted if they cover the costs that the orders cause. This policy was implemented because Kimballs industry is in a recession and the company is producing well below capacity (and expects to continue doing so for the coming year). The president is willing to accept orders that minimally cover their variable costs so that the company can keep its employees and avoid layoffs. Also, any orders above variable costs will increase overall profitability of the company. Required: 1. Compute the total unit variable cost. Suppose that Kimball has an opportunity to accept an order for 20,000 units at 220 per unit. Should Kimball accept the order? (The order would not displace any of Kimballs regular orders.) 2. Explain the significance of the coefficient of correlation measures for the cost formulas. Did these measures have a bearing on your answer in Requirement 1? Should they have a bearing? Why or why not? 3. Suppose that a multiple regression equation is developed for overhead costs: Y = 100,000 + 100X1 + 5,000X2 + 300X3, where X1 = direct labor hours, X2 = number of setups, and X3 = engineering hours. The coefficient of determination for the equation is 0.94. Assume that the order of 20,000 units requires 12 setups and 600 engineering hours. Given this new information, should the company accept the special order referred to in Requirement 1? Is there any other information about cost behavior that you would like to have? Explain.
The managers of Sandusky Inc. have decided to use the month of January to determine the cost of producing their widget for the year. This will help determine proper product pricing and is important for control purposes. Using the data from January, the managers can determine the costs associated with material and labor. However, fixed indirect costs must still be determined. Management intends to use the prior year’s data to determine overhead costs. It is assumed that management will allocate an equal amount of estimated costs each month. Is this an appropriate decision by management? Should January be used as the reference point for the whole year?
please answer the following questions: 1. Debiting Work in Process Inventory for $102,000 variable OH will result in: a. Decreasing Work in Pocess Inventory based on Actual Variable OH rate. b. Increasing Work in Pocess Inventory based on actual Variable OH rate. c. Decreasing Work in Pocess Inventory based on standard Variable OH rate. d. Increasing Work in Pocess Inventory based on standard Variable OH rate. 2. Debiting Variable Overhead Efficiency Variance means we had an unfavorable outcome. a. True b. False 3. Crediting Variable Overhead Spending Variance means we had an unfavorable outcome for Variable Overhead Spending Variance a. True b. False 4. We normally credit Factory Overhead to apply the actual cost to Overhead to the Work in Process a. True b.False
Steve Morgan, controller for Newton Industries, was reviewing production cost reports for the year. One amount in these reports continued in to bother him – advertising. During the year the company had instituted an expensive advertisement campaign to sell some of its slower-moving products. It was still too early to tell whether the advertising campaign was successful. There had been much internal debate as how to report advertising cost. The vice president of finance argued that advertising costs should be reported as cost of production, just like direct material and direct labor. He therefore recommended that this cost be identified as manufacturing overhead and reported as part of inventory costs until sold. Others disagreed. Morgan believed that this cost should be reported as an expense of the current period, so as not to overstate net income. Others argued that it should be reported as prepaid advertising and reported as a current asset. The president finally had to decide…
The cost accountant of L. Rosales, Inc. is considering to use the ABC system in determining the cost of its products. At present, the company uses the traditional costing systems wherein factory overhead costs are allocated based on direct labor hours. This cost accountant believes that the present system may be providing misleading cost information, hence, the plan to change to ABC system. For the coming period, the company is planning to use 5,000 direct labor hours, and its total budgeted factory overhead amounts to P 90,000, broken down as follows: Activity Cost Driver Budgeted Activity Budgeted Cost Sets up cost Number of set ups 40 P 20,000 Production monitoring Number of batches 20 40,000 Quality control Number of inspections 1,000 30,000 Total overhead costs…
The cost accountant of L. Rosales, Inc. is considering to use the ABC system in determining the cost of its products. At present, the company uses the traditional costing systems wherein factory overhead costs are allocated based on direct labor hours. This cost accountant believes that the present system may be providing misleading cost information, hence, the plan to change to ABC system. For the coming period, the company is planning to use 5,000 direct labor hours, and its total budgeted factory overhead amounts to P 90,000, broken down as follows: Activity Cost Driver Budgeted Activity Budgeted Cost Sets up cost Number of set ups 40 P 20,000 Production monitoring Number of batches 20 40,000 Quality control Number of inspections 1,000 30,000 Total overhead…
Andrew Jarvis started his manufacturing business earlier this year and has been preparing management accounts using variable (marginal) costing. He has approached you as a Certified Chartered Management Accountant, to help his finance team prepare annual financial statements. As part of your discussions with the company’s finance team, you mentioned that you will use absorption costing to prepare the financial statements. Peter Cullen, the Finance Manager, said that he was unfamiliar with this method of costing and has asked you for more information about it. Draft a Report for Peter Cullen that:a) Describes and explains the basis of variable (marginal) and absorption costing systems. b) Explains the effect on profit of using variable (marginal) and absorption costing. c) Outlines TWO advantages and TWO disadvantages of both variable (marginal) AND absorption costing systems.