Managerial Accounting: Creating Value in a Dynamic Business Environment
12th Edition
ISBN: 9781260417074
Author: HILTON, Ronald
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Textbook Question
Chapter 6, Problem 29E
Chillicothe Meat Company produces one of the best sausage products in southern Ohio. The company’s controller used the account-classification method to compile the following information.
- a. Depreciation schedules revealed that monthly depreciation on buildings and equipment is $19,000.
- b. Inspection of several invoices from meat packers indicated that meat costs the company $1.10 per pound of sausage produced.
- c. Wage records showed that compensation for production employees costs $.70 per pound of sausage produced.
- d. Payroll records showed that supervisory salaries total $10,000 per month.
- e. Utility bills revealed that the company incurs utility costs of $4,000 per month plus $.20 per pound of sausage produced.
Required:
- 1. Classify each cost item as variable, fixed, or semivariable.
- 2. Write a cost formula to express the cost behavior of the firm’s production costs. (Use the formula Y= a + bX, where Y denotes production cost and X denotes quantity of sausage produced.)
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Thornton Manufacturing Company began operations on January 1. During the year, it started and completed 1,660 units of product. The financial statements are prepared in accordance with GAAP. The company incurred the following costs:
Raw materials purchased and used—$3,140.
Wages of production workers—$3,580.
Salaries of administrative and sales personnel—$1,995.
Depreciation on manufacturing equipment—$4,568.
Depreciation on administrative equipment—$1,820.
Thornton sold 1,070 units of product.
Required
Determine the total product cost for the year.
Determine the total cost of the ending inventory. (Do not round intermediate calculations.)
Determine the total of cost of goods sold. (Do not round intermediate calculations.)
Adams Manufacturing Company began operations on January 1. During the year, it started and completed 1,610 units of product. The financial statements are prepared in accordance with GAAP. The company incurred the following costs:
Raw materials purchased and used—$3,220.
Wages of production workers—$3,610.
Salaries of administrative and sales personnel—$1,925.
Depreciation on manufacturing equipment—$4,279.
Depreciation on administrative equipment—$1,820.
Adams sold 1,170 units of product.
Determine the total product cost for the year.
Determine the total cost of the ending inventory. (Do not round intermediate calculations.)
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Chapter 6 Solutions
Managerial Accounting: Creating Value in a Dynamic Business Environment
Ch. 6 - Describe the importance of cost behavior patterns...Ch. 6 - Define the following terms, and explain the...Ch. 6 - Suggest an appropriate activity base (or cost...Ch. 6 - Draw a simple graph of each of the following types...Ch. 6 - Explain the impact of an increase in the level of...Ch. 6 - Explain why a manufacturers cost of supervising...Ch. 6 - Explain the impact of an increase in the level of...Ch. 6 - Prob. 8RQCh. 6 - Indicate which of the following descriptions is...Ch. 6 - Prob. 10RQ
Ch. 6 - What is meant by a learning curve? Explain its...Ch. 6 - Suggest an appropriate independent variable to use...Ch. 6 - What is an outlier? List some possible causes of...Ch. 6 - Explain the cost estimation problem caused by...Ch. 6 - Describe the visual-fit method of cost estimation....Ch. 6 - What is the chief drawback of the high-low method...Ch. 6 - Explain the meaning of the term least squares in...Ch. 6 - Prob. 18RQCh. 6 - Prob. 19RQCh. 6 - List several possible cost drivers that could be...Ch. 6 - Prob. 21RQCh. 6 - Prob. 22ECh. 6 - The behavior of the annual maintenance and repair...Ch. 6 - WMEJ is an independent television station run by a...Ch. 6 - Jonathan Macintosh is a highly successful...Ch. 6 - Jonathan Macintosh is a highly successful...Ch. 6 - The Iowa City Veterinary Laboratory performs a...Ch. 6 - Chillicothe Meat Company produces one of the best...Ch. 6 - Rio Bus Tours has incurred the following bus...Ch. 6 - Prob. 31ECh. 6 - Prob. 32ECh. 6 - Prob. 33ECh. 6 - Gator Beach Marts, a chain of convenience grocery...Ch. 6 - For each of the cost items described below, choose...Ch. 6 - The following selected data were taken from the...Ch. 6 - Antioch Extraction, which mines ore in Montana,...Ch. 6 - Nations Capital Fitness, Inc. operates a chain of...Ch. 6 - The Allegheny School of Music has hired you as a...Ch. 6 - Prob. 40PCh. 6 - (Note: Instructors who wish to cover all three...Ch. 6 - Refer to the original data in the preceding...Ch. 6 - Shortly after being hired as an analyst with...Ch. 6 - The controller of Chittenango Chain Company...Ch. 6 - Dana Rand owns a catering company that prepares...Ch. 6 - Prob. 48PCh. 6 - Earth and Artistry, Inc. provides commercial...Ch. 6 - Prob. 51CCh. 6 - Refer to the data and accompanying information in...
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