Week 5 Practice Text Exercises Acc 561

In analyzing the change in a firm's operating income from one year to the next, which of the following factors measures the change attributable solely to the change in the quantity of inputs spent in year 2 relative to the quantity of inputs that would have been used in year 1 to produce the year 2 output?

1- The total unit cost = Total Variable Cost + Production Fixed Expenses + Advertising Expense + Selling and Administrative Expense = 3.23 + 1.20 + 0.30 + 0.19 = 4.92.

1. For financial accounting purposes, what is the total amount of product costs incurred to make 10,000 units?

* On Income Statement for December 31, 2011, the number of Revenues, Cost of Goods Sold, Expenses and Net Income will go

Cost of inventory is determined using the average method; inventory is stated at the lower of cost or market. +pB13

Second, the manufacturing order costs for non-stocked items was calculated by dividing total manufacturing order costs for non-stocked items by the number of orders for non-stocked products. Non-stocked products have additional costs associated with processing orders that went above and beyond the costs associated with a stocked product. The third step involved determining what the S"A allocation factor would be for calculating the S"A volume related costs. This allocation factor would then be applied to manufacturing COGS. The fourth and final step involved the calculation of the operating profit based on backing out volume related costs from sales revenues followed by deducting S"A and manufacturing order costs from the resulting gross margin to arrive at a operating profit.

330-10-30330-10-30-1 The primary basis of accounting for inventories is cost, which has been defined generally as the price paid or consideration given to acquire an asset. As applied to inventories, cost means in principle the sum of the applicable expenditures and charges directly or indirectly incurred in bringing an article to its existing condition and location. It is understood to mean acquisition and production cost, and its determination involves many considerations. 330-10-30330-10-30-2 Although principles for the determination of inventory costs may be easily stated, their application, particularly to such inventory items as work in process and finished goods, is difficult because of the variety of considerations in the allocation of costs and charges.

2.) For each expense that is variable with respect to revenue hours, calculate the cost per revenue hour.

What formula or function does he put in columns B through F in Row 13 that will give him the total expenses for the week in each category?

* Net Operating Income (NOI), Cash Flow from Operations (CFO) and Cash Flow after Financing (CFAF)

How much fixed manufacturing overhead is in ending inventory under full costing? Compare this amount to the difference in the net incomes calculated in Exercise 5-13.

8. I would like to remove allocated costs and fixed overheads and see what would be the variable cost. If this is done, you can see that the variable cost hovers around 7 FF. ( Not many of you have done this)

Operating expenses includes production costs, such as direct labor, indirect labor, inventory carrying costs, equipment depreciation, materials and supplies used in production, and administrative cost. This was not happening at Alex’s plant. His inventories had increased over the past six or seven months and operational expense also increased. This meant he had a lot of work to do to keep his plant open and he was now aware of it.

Operating income is the amount of profit realized from a business’s operations after taking out operating expenses. The operating expenses are sustained from operating activities such as utilities and manufacturing overhead costs.

b. Operating Income, income before taxes, net income, earnings per share and retained earnings for current year ......................................................................... 11