5. What is the value of the total cost? A company makes a single product with a total capacity of 400 000 litres per annum. Cost and sales data are as follows: Selling price Marginal cost Fixed costs $1 per litre $0.50 per litre $100 000

5. What is the value of the total cost? A company makes a single product with a total capacity of 400 000 litres per annum. Cost and sales data are as follows: Selling price Marginal cost Fixed costs $1 per litre $0.50 per litre $100 000

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 4BE

See similar textbooks

Related questions

Q: Consider each of the independent transactions below: a) The University of Belize traded an older…

A: In the case of an exchange of assets for obtaining a new asset, the gain or loss from the exchange…

Q: for the price of $11.50 per unit. Due to a reduction in output, the company now has idle capacity…

A: Financial advantage (disadvantage) of making the 70,000 starters instead of buying them from an…

Q: 32. Brown Company estimates that monthly sales will be as follows. January February March P100,000…

A: A cash budget is prepared to estimate the total cash received and total cash disbursement. It is…

Q: Hualien Company adopts the periodical inventory system, and its adjusted trial balance on December…

A: Closing entries are passed at the end of accounting period to transfer the balance of temporary…

Q: What is the amount of income Inkjet Company would report from its investment in GIC for the year…

A: The answer for the multiple choice question and relevant working are presented hereunder : Inkjet…

Q: P7,000,000 3,000,000 4,335,000 650,000 Preference share capital, P300 par Share premium - preference…

A: Contributed Capital is the total amount contributed by the owners and also includes shares premium.…

Q: Changes in Current Operating Assets and Liabilities-Indirect Method Mohammed Corporation's…

A: Cash flow from operating activities indicates the cash inflow or outflow transactions related to the…

Q: On December 30, 2020, Aloha Company, an entity with no subsidiary, purchased 10,000 ordinary shares…

A: Using equity method, the investment value is decreased with receipt of dividend and increased with…

Q: estrict earnings available for dividends Statement II. The issuance of stock dividends increases…

A: Stock dividends are provided to the existing shareholders of the company by way of issuance on new…

Q: Clampett, Incorporated, has been an S corporation since its inception. On July 15, 2021, Clampett,…

A: The answer is stated below:

Q: What is the difference between book value accounting and market value accounting? How do interest…

A: The answer is stated below:

Q: Budget Actual Sales Units 5,000 Selling Price $50 $250,000 6.000 Variable costs Variable costs $32…

A: Flexed budget is a budget that is prepared at the and of financial year , it is rewritten for actual…

Q: Wendt Corporation acquired a new depreciable asset for $94,000. The asset has a 4-year expected life…

A: Depreciation is an expense charged against income statement for the portion of fixed asset which has…

Q: be invested at the beginning of each quarter at 10 % compounded quarterly in order to have P140,000…

A: The answer has been mentioned below.

Q: Test Company produces two products from a common input: Product A and Product B. One batch of the…

A: Solution... Sales price of product B at split off point = $1500 After further processing = $400…

Q: Truck 1 cost $34,000 on January 1, 2013. It should be depreciated on a straight-line basis over an…

A: Vision consulting Inc. has two trucks and the depreciation on the same during the previous years is…

Q: 50,000 by November 30 and will have no other gross income. In addition, it will have no deductions…

A: The comparison of overall taxes as,

Q: REQUIRED: account (c) Maturity Date

A: These are the accounting transactions that are having a monetary impact on the financial statement…

Q: a. Mr. Smith, the financial controller of LabAid, is convinced that the step-down method allocates…

Q: Markie is employed by Holy Cross as an ambulance driver with a salary of Php. 20,000 a month. In…

A: Income is defined differently depending on the situation, such as for taxation or analysis.…

Q: A simple trust has the following receipts and expenditures for the current year. The trust…

A: Taxable income is the total of all incomes earned by the taxpayer during the relevant year. Tax…

Q: Equipment Invento urrent cost ecoverable amount 100,000 95,000 80,C 90,C ne entity voluntarily…

A: Concept of valuation of Inventory at cost or Net realisable value, which ever is less Test of assets…

Q: ompany sold a machine with a cost of P500,000 and accumulated depreciation of P350,000 to Gee…

A: Notes receivables refer to the written form of promissory notes that provides the holder the…

Q: On 31 May 20X2 the bank statement of Harrison Ltd showed a balance of £26,500. As part of the bank…

A: Bank reconciliation is a statement to identify and document the differences between balance as per…

Q: Party Supply is trying to decide whether or not to continue its costume segment. The information…

A: As the direct fixed cost and allocated fixed cost can not be avoided, the profit will be decreased…

Q: QUESTION 5 Please use excel

A: Annuity: this is used in case of a future annuity – suppose an equal sum of money is invested in the…

Q: On December 1, 2018, elsa started his business with a borrowed capital amounting to P 40,000 at a…

A: Return on capital is the return earned by a business entity from the capital invested by them which…

Q: Cullumber Company acquires a delivery truck at a cost of $42,000. The truck is expected to have a…

A: Depreciation is the allocation of cost of asset over the useful life of the asset. Several methods…

Q: Sales (20,000 units @ 60 per unit) $1,200,000 Less: Variable cost 20,000@ $45 900,000 Contribution…

A: No. of units to be sold in next year = Current units sales + (1 + 0.20) Variable costs per unit in…

Q: Alpha Corp. has a branch in Pasig City established on May 31, 2021. During 2021, the home office…

A: Head Office of the business organization may open its branches at different cities to expand the…

Q: Ghaz Company produces two types of sound units: Deluxe and Regular follows: ctivity dala Is as…

A: ABC costing is a method where cost is allocated based on activity. It does not uses single overhead…

Q: LOGARITHMS You are a rising star in the music industry, and you have just received word that you…

A: 1) Amount at the end = Amount invested × (1+rate)^n 600,000 = 500,000 × (1+.0315)^n 1.2 = 1.0315^n…

Q: Contributed capital: 5% preference share, P50 par, cumulative, 30,000 shares issued, dividends 5…

A: Retained Earnings: - The total amount that remains after the payment of dividends and taxes is known…

Q: The following selected data for BC Company for 2022: Sales P 2,000,000 Variable Costs 1,200,000…

A: Formulas: Residual income = Net Operating income - Average Invested Capital x Required rate of…

Q: Assume that a company has developed a new industrial component called Part A that offers superior…

A: Given information, Competing part sells for =$1,500 Replaced after =1,500 hours of use Preventive…

Q: 1. For reporting purposes, currencies are defined as Operating, International and…

A: Disclaimer: “Since you have asked multiple questions, we will solve the first question for you. If…

Q: xercise 13-6 (Algo) Managing a C

A: The total cost of production of a good comprises of the total fixed cost of production and the total…

Q: We discussed contingent liabilities in class. Describe the conditions for when a contingent…

A: A liability whose occurrence depends upon the happening or non happening of future uncertain events…

Q: A television company purchased machinery for P140,000 on July 1, 1979. It is estimated it will have…

A: Introduction:- Depreciation is non cash expenditure. Which is charged on fixed assets over a useful…

Q: The Wildcat Oil Company is trying to decide whether to lease or buy a new computer- assisted…

A: Cost of Equipment = $9100000Life (In years) = 5Residual value = Salvage value = $950,000Tax rate =…

Q: Briefly, explain the difference between the torts of Wrongful Interference with a Contractual…

A: Answer:- Tort meaning:- Tort is a kind of civil wrong that causes the claimant to incur loss or…

Q: Sales (20,000 units @ 60 per unit) $1,200,000 Less: Variable cost 20,000@ $45 900,000 Contribution…

A: Net operating income is the net result of operational revenues and expenses.

Q: Sales (20,000 units @ 60 per unit) $1,200,000 Less: Variable cost 20,000@ $45 900,000 Contribution…

A: Formulas: Increase in net operating income % = (Expected net operating income - Current net…

Q: Directions: Prepare a schedule of cost of goods sold for the three-month period and a statement of…

A: Note: It is assumed that Purchase Returns and Allowances is 4,900 not 4,9000 The process of…

Q: Shangrila designated the Crossing shares as At Fair Value Shangrila bought shares of Crossing, Inc.…

A: Number of bonus shares issued = 5000 shares x 20% = 1000 shares

Q: $ 9.50 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead…

A: The minimum price to be charged for the special order will be based on the Relevant Cost. Relevant…

Q: Bernard Company shows the following manufacturing costs for the first six months of the year:…

A: Solution... Highest point Production in units = 2,600 Costs = $47,900 Lowest point…

Q: Ghaz Company produces two types of sound units: Deluxe and Regular. follows: eIvity data Is as…

A: In this question, we have to calculate consumption ratio, pool rate and unit product costs based on…

Q: A stock you are interested in is priced at $105, it's recent dividend was $5, if the market expects…

A: Company means the form of business where management is separately from owner and have perpetual…

Q: Accounting MNO, an S corporation, has an AAA balance of $10,000 at the beginning of the year. During…

A: Consolidation- Consolidation means combining two or more business organizations or entities into a…

Concept explainers

Stock Market Indices

Stock indexes are used to compare the price fluctuations of a group of stocks of similar companies, which are combined based on a similar industry or a particular market capitalization limit or type of market. The price comparison is based on a pre-determined standard method or indicators. These stock indexes are usually considered a base for comparison of a particular stock, and the performance of that particular company can be easily determined.

Question

Help with question 5 only

5. What is the value of the total cost?
A company makes a single product with a total capacity of 400 000 litres per annum.
Cost and sales data are as follows:
Selling price
Marginal cost
Fixed costs
$1 per litre
$0.50 per litre
$100 000
a.
$250 000
b.
$287 000
C.
$185 000
d.
$88 900

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1 Introduction

VIEW

Step 2 Calculation of Total cost

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Starling Co. manufactures one product with a selling price of 18 and variable cost of 12. Starlings total annual fixed costs are 38,400. If operating income last year was 28,800, what was the number of units Starling sold? a. 4,800 b. 6,400 c. 5,600 d. 11,200
A company produces two products. E and F in batches of 100 units. The production and cost data are: The company can only perform 12,000 set-ups each period yet there is unlimited demand for each product. What is the differential profit from producing product E instead of product F for the year? A. $216,000 B. $204,000 C. $12,000 D. $54,000
Klamath Company produces a single product. The projected income statement for the coming year is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. 2. Suppose 10,000 units are sold above break-even. What is the operating income? 3. Compute the contribution margin ratio. Use the contribution margin ratio to compute the break-even point in sales revenue. (Note: Round the contribution margin ratio to four decimal places, and round the sales revenue to the nearest dollar.) Suppose that revenues are 200,000 more than expected for the coming year. What would the total operating income be?
A companys product sells for $150 and has variable costs of $60 associated with the product. What is its contribution margin per unit? A. $40 B. $60 C. $90 D. $150
Lotts Company produces and sells one product. The selling price is 10, and the unit variable cost is 6. Total fixed cost is 10,000. Required: 1. Prepare a CVP graph with Units Sold as the horizontal axis and Dollars as the vertical axis. Label the break-even point on the horizontal axis. 2. Prepare CVP graphs for each of the following independent scenarios: (a) Fixed cost increases by 5,000, (b) Unit variable cost increases to 7, (c) Unit selling price increases to 12, and (d) Fixed cost increases by 5,000 and unit variable cost is 7.
If a company has fixed costs of $6.000 per month and their product that sells for $200 has a contribution margin ratio of 30%, how many units must they sell in order to break even? A. 100 B. 180 C. 200 D. 2,000
A company sells its products for $80 per unit and has per-unit variable costs of $30. What is the contribution margin per unit? A. $30 B. $50 C. $80 D. $110
Olivian Company wants to earn 420,000 in net (after-tax) income next year. Its product is priced at 275 per unit. Product costs include: Variable selling expense is 14 per unit; fixed selling and administrative expense totals 290,000. Olivian has a tax rate of 40 percent. Required: 1. Calculate the before-tax profit needed to achieve an after-tax target of 420,000. 2. Calculate the number of units that will yield operating income calculated in Requirement 1 above. (Round to the nearest unit.) 3. Prepare an income statement for Olivian Company for the coming year based on the number of units computed in Requirement 2. 4. What if Olivian had a 35 percent tax rate? Would the units sold to reach a 420,000 target net income be higher or lower than the units calculated in Requirement 3? Calculate the number of units needed at the new tax rate. (Round dollar amounts to the nearest dollar and unit amounts to the nearest unit.)
Faldo Company produces a single product. The projected income statement for the coming year, based on sales of 200,000 units, is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. Suppose that 30,000 units are sold above the break-even point. What is the profit? 2. Compute the contribution margin ratio and the break-even point in dollars. Suppose that revenues are 200,000 greater than expected. What would the total profit be? 3. Compute the margin of safety in sales revenue. 4. Compute the operating leverage. Compute the new profit level if sales are 20 percent higher than expected. 5. How many units must be sold to earn a profit equal to 10 percent of sales? 6. Assume the income tax rate is 40 percent. How many units must be sold to earn an after-tax profit of 180,000?
A company has prepared the following statistics regarding its production and sales at different capacity levels. Total costs: 1. At what point is break-even reached in sales dollars? In units? (Hint: Use the capacity level to determine the number of units.) 2. If the company is operating at 60% capacity, should it accept an offer from a customer to buy 10,000 units at 3 per unit?
A company sells two products, Model 101 and Model 202. For every one unit of Model 101, they sell they sell two units of Model 202. Sales and cost information for the two products is shown. What is the contribution margin for a composite unit based on the sales mix? $14 $21 $35 $56
Product cost concept of product pricing Based on the data presented in Exercise 12-15, assume that Willis Products Inc. uses the product cost concept of applying the cost-plus approach to product pricing. a.Determine the total manufacturing costs and the cost amount per unit for the production and sale of 200,000 units. b.Determine the product cost markup percentage per unit. Round to two decimal place. c.Determine the selling price per unit. Round to the nearest dollar.