Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
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Chapter 12, Problem 12Q
12. On January 31, the managers of Integra, Inc. seek to determine the cost of producing their product during January for product pricing and control purposes. The company can easily determine the costs of direct materials and direct labor used in January production, but many fixed indirect costs are not affected by the level of production activity and have not yet been incurred. The managers can reasonably estimate the overhead costs for the year based on the fixed indirect costs incurred in past periods. Assume the managers decide to allocate an equal amount of these estimated costs to the products produced each month. Explain why this practice may not provide a reasonable estimate of product costs in January.
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The controller at Wesson Company's manufacturing plant has provided you with the following information for the first quarter's
operations:
Direct materials
Fixed manufacturing overhead costs
Sales price
Variable manufacturing overhead
Direct labor
Fixed marketing and administrative costs
Units produced and sold during the quarter
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Required:
a. Prepare a gross margin income statement.
b. Prepare a contribution margin income statement.
Complete this question by entering your answers
Required A Required B
Prepare a contribution margin income statement.
Contribution Margin Income Statement
The management of Casablanca Manufacturing Corporation believes that machine-hours is an appropriate measure of activity for overhead
cost. Shown below are machine-hours and total overhead costs for the past six months:
January
February
March
April
May
June
Machine-
Hours
150,000
140,000
160,000
130,000
170,000
200,000
$319,500
$362,500
$400,000
Assume that the relevant range includes all of the activity levels mentioned in this problem.
What is Casablanca's independent variable?
Multiple Choice
Overhead Cost
$339,000
$328,000
$350, eeb
the year
the total overhead cost
please answer these as well
8. If 116,500 pounds of raw materials are needed to meet production in August, what is the estimated accounts payable balance at the end of July?
9. If 116,500 pounds of raw materials are needed to meet production in August, what is the estimated raw materials inventory balance at the end of July?
10. What is the total estimated direct labor cost for July?
11. If we assume there is no fixed manufacturing overhead and the variable manufacturing overhead is $8 per direct labor-hour, what is the estimated unit product cost?
Note: Round your answer to 2 decimal places.
12. If we assume that there is no fixed manufacturing overhead and the variable manufacturing overhead is $8 per direct labor-hour, what is the estimated finished goods inventory balance at the end of July?
13. If we assume that there is no fixed manufacturing overhead and the variable manufacturing overhead is $8 per direct labor-hour, what are the estimated cost of goods sold and gross margin…
Chapter 12 Solutions
Survey Of Accounting
Ch. 12 - 1.What is a cost object? Identify four different...Ch. 12 - Prob. 2QCh. 12 - 3.If the cost object is a manufactured product,...Ch. 12 - Prob. 4QCh. 12 - Prob. 5QCh. 12 - Prob. 6QCh. 12 - Prob. 7QCh. 12 - Prob. 8QCh. 12 - Prob. 9QCh. 12 - 10.Why are some manufacturing costs not directly...
Ch. 12 - Prob. 11QCh. 12 - 12.On January 31, the managers of Integra, Inc....Ch. 12 - 13.Respond to the following statement: The...Ch. 12 - Prob. 14QCh. 12 - Define the term cost pool. How are cost pools...Ch. 12 - LO 4-1Exercise 4-1A Direct versus indirect costs...Ch. 12 - Prob. 2ECh. 12 - Prob. 3ECh. 12 - Exercise 4-4APooling overhead cost Ware...Ch. 12 - Prob. 5ECh. 12 - Exercise 4-5A Allocating overhead cost among...Ch. 12 - Prob. 7ECh. 12 - Prob. 8ECh. 12 - Exercise 4-6AAllocating overhead costs among...Ch. 12 - Exercise 4-9AAllocating to solve a timing problem...Ch. 12 - Prob. 11ECh. 12 - Exercise 4-11AHow the allocation of fixed cost...Ch. 12 - Prob. 13ECh. 12 - Problem 4-17A Cost accumulation and allocation...Ch. 12 - Problem 4-18A Selecting an appropriate cost driver...Ch. 12 - Problem 4-19A Cost allocation in a service...Ch. 12 - Prob. 17PCh. 12 - Problem 4-21A Allocation to accomplish smoothing...Ch. 12 - Problem 4-22A Allocating indirect costs between...Ch. 12 - Prob. 20PCh. 12 - Prob. 1ATCCh. 12 - Prob. 2ATCCh. 12 - ATC 4-3 Research Assignment Using real-world data...Ch. 12 - Prob. 4ATCCh. 12 - Prob. 5ATC
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