The section of Waterways that produces controllers for the company provided the following information. Sales for month of February: Unit variable manufacturing cost: 3,800 $10.00 Unit selling price: $43.00 Fixed manufacturing overhead cost (per month for controllers): $83,000 Unit variable selling and administrative costs: $2.90 Fixed selling and administrative expenses (per month for controllers): $13.950 Using this information for the controllers, determine the contribution margin ratio, the degree of operating leverage, the break-even point in sales dollars, and the margin of safety ratio for Waterways Corporation on this product. Contribution Margin Ratio (Round to O decimal places, e.g. 25%.) Degree of Operating Leverage (Round to 2 decimal places, e.g. 5.25.) Break-even Point in Dollars $ 72 %

The section of Waterways that produces controllers for the company provided the following information. Sales for month of February: Unit variable manufacturing cost: 3,800 $10.00 Unit selling price: $43.00 Fixed manufacturing overhead cost (per month for controllers): $83,000 Unit variable selling and administrative costs: $2.90 Fixed selling and administrative expenses (per month for controllers): $13.950 Using this information for the controllers, determine the contribution margin ratio, the degree of operating leverage, the break-even point in sales dollars, and the margin of safety ratio for Waterways Corporation on this product. Contribution Margin Ratio (Round to O decimal places, e.g. 25%.) Degree of Operating Leverage (Round to 2 decimal places, e.g. 5.25.) Break-even Point in Dollars $ 72 %

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 1PA: The following product Costs are available for Haworth Company on the production of chairs: direct...

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Identify cost graphs The following cost graphs illustrate various types of cost behavior: For each of the following costs, identify the cost graph that best illustrates its cost behavior as the number of units produced increases: A. Total direct materials cost B. Electricity costs of 1,000 per month plus 0.10 per kilowatt-hour C. Per-unit cost of straight-line depreciation on factory equipment D. Salary of quality control supervisor, 20,000 per month E. Per-unit direct labor cost
Ellerson Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 278,000, direct labor cost was 189,000, and overhead cost was 523,000. During the year, 100,000 units were completed. Required: 1. Calculate the total cost of direct materials used in production. 2. Calculate the cost of goods manufactured. Calculate the unit manufacturing cost. 3. Of the unit manufacturing cost calculated in Requirement 2, 2.70 is direct materials and 5.30 is overhead. What is the prime cost per unit? Conversion cost per unit?
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Business Specialty, Inc., manufactures two staplers: small and regular. The standard quantities of direct labor and direct materials per unit for the year are as follows: The standard price paid per pound of direct materials is 1.60. The standard rate for labor is 8.00. Overhead is applied on the basis of direct labor hours. A plantwide rate is used. Budgeted overhead for the year is as follows: The company expects to work 12,000 direct labor hours during the year; standard overhead rates are computed using this activity level. For every small stapler produced, the company produces two regular staplers. Actual operating data for the year are as follows: a. Units produced: small staplers, 35,000; regular staplers, 70,000. b. Direct materials purchased and used: 56,000 pounds at 1.5513,000 for the small stapler and 43,000 for the regular stapler. There were no beginning or ending direct materials inventories. c. Direct labor: 14,800 hours3,600 hours for the small stapler and 11,200 hours for the regular stapler. Total cost of direct labor: 114,700. d. Variable overhead: 607,500. e. Fixed overhead: 350,000. Required: 1. Prepare a standard cost sheet showing the unit cost for each product. 2. Compute the direct materials price and usage variances for each product. Prepare journal entries to record direct materials activity. 3. Compute the direct labor rate and efficiency variances for each product. Prepare journal entries to record direct labor activity. 4. Compute the variances for fixed and variable overhead. Prepare journal entries to record overhead activity. All variances are closed to Cost of Goods Sold. 5. Assume that you know only the total direct materials used for both products and the total direct labor hours used for both products. Can you compute the total direct materials and direct labor usage variances? Explain.
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