Exercise 2. Blanche Corporations estimated its unit costs of producing and selling 12,000 units per month as follows: Direct Materials Used Direct Labor Variable Manufacturing Overhead Fixed Manufacturing Overhead P 32.00 20.00 15.00 Variable Marketing Cost Fixed Marketing Cost Estimated Unit Cost 3.00 4.00 P 80.00 6.00
Q: Consider the following information for Presidio Inc.'s most recent year of operations. Number of…
A: Variable costing is a concept used in accounting in which the fixed manufacturing overhead is…
Q: The manufacturing costs of Rosenthal Industries for the first three months of the year follow:…
A: A high low method is used to separate the mixed cost into fixed cost and variable cost. In this…
Q: The manufacturing costs of Ackerman Industries for the first three months of the year follow:…
A: a. Compute variable cost per unit using high-low method as shown below: Therefore, variable…
Q: Exercise 1-8 Product Costs and Period Costs; Variable and Fixed Costs [LO1-3, LO1-4] Kubin Company’s…
A: Product Costs : Product costs are the costs that are incurred for the production of a particular…
Q: Problem 1 The J. Page Furniture Company has the following information available regarding costs at…
A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: 2. The estimated unit costs for CNR Inc., when it is operating at a production and sales level of…
A: The cost of manufacturing a product includes raw material costs, labor costs, manufacturing…
Q: High-Low Method The manufacturing costs of Rosenthal Industries for the first three months of the…
A:
Q: Assume the following information for a company that produced and sold 10,000 units during its first…
A: Absorption costing is one of the costing methods under which total costs related to the product,…
Q: The manufacturing costs of Ackerman Industries for the first three months of the year follow:…
A: The high-low method is a method to split the variable and fixed cost components of an entity's mixed…
Q: Question 3 Ghaz Company produces two types of sound units: Deluxe and Regular. Activity data is as…
A: ABC costing is a method where cost is allocated based on activity. It does not uses single overhead…
Q: Problems 1. During the most recent year, Pilkey Ltd had the following date associated with the pro…
A: Answer:- 1 Computation of unit product cost using absorption costing:- Absorption cost per unit = (…
Q: %24 #口 Preble Company manufactures one product Its variable manufacturing overhead is applied to…
A: Material Quantity Variance - It is the difference between the actual amount of materials used and…
Q: Question 1: The following information relating to production and mixed costs are extracted from the…
A: Mixed cost contains two variants of the cost that is a fixed cost and variable cost. The high-low…
Q: 11. A company has the following cost structure: Direct labor per unit P6 Direct materials per unit P…
A: Given information, Direct labor per unit =P 6 Direct materials per unit=P 2 Variable manufacturing…
Q: 1. Classify the above costs into variable costs, fixed costs and mixed costs. Use high-low method to…
A: 1. Fixed Costs - These are costs which do not change in the change in the level of activity. These…
Q: Cost per Cost per Unit Period $ 4.80 $ 3.80 $ 1.50 Direct materials Direct labor Variable…
A: Formula: Total variable cost = Direct materials + Direct labor + Variable manufacturing overhead +…
Q: Task 9. The company produces product A. | Calculate the next month's costs, taking into account that…
A: Every organization incurs two types of overheads namely fixed and variable. The fixed overheads are…
Q: The manufacturing costs of Kellam Industries for the first three months of the year follow: Total…
A: High Low Method is a cost accounting technique used to determine the fixed and variable elements of…
Q: CO Preble Company manufactures one product Its variable manufacturing overhead is applied to…
A: Labor efficiency variance = (Actual hours - Standard hours)*Standard rate If the actual hours are…
Q: The manufacturing costs of Rosenthal Industries for the first three months of the year follow:…
A: a.Variable cost $72 per unit
Q: Question 2 Using the above information on Pamlico Manufacturing Ltd, prepare the statement of…
A: Income statement: Income statement has been drafted by a company to know about their profitability…
Q: Comprehensive Problem Xavier Company produces a single product. Variable manufacturing overhead is…
A: Variances: Variances mean the difference between the standard and the actual activity during a…
Q: High-Low Method The manufacturing costs of Barretto Enterprises for three months of the year…
A: A high low method is used to separate the mixed cost into fixed cost and variable cost. In this…
Q: A business operated at 100% of capacity during its first month, with the following results: Sales…
A: The cost can be classified into two categories i.e fixed cost and variable cost. The FIxed cost…
Q: ims Company began operations on January 1. Its cost and sales information for this year follow.…
A: The income statement can be prepared using various methods as variable costing and absorption…
Q: Marginal Costing and Absorption Costing Question 2 The following information is being provided by…
A: Absorption costing means that inventory is valued at total manufacturing cost including fixed…
Q: Use the following information for the Exercise below. (Algo) Skip to question [The…
A: Variable Costing - Variable costing formula = Sales - Variable Costs - Fixed Cost = Operating Income…
Q: 2. The estimated unit costs for CNR Inc., when it is operating at a production and sales level of…
A: Absorption Costing - In this costing method cost associated with the manufacturing of a product is…
Q: The following costs were incurred in May: Direct materials $ 43,100 Direct labor $ 24,800…
A: As the questions asked have more than 1 question, the first question is answered. If you want the…
Q: The manufacturing costs of Kellam Industries for the first three months of the year follow: Total…
A: When mixed costs are given, then we use high-low method to calculate the variable and fixed cost of…
Q: 2 Given the following data, calculate the total product cost per unit under variable costing. Direct…
A: Formula: Total product cost under variable costing: Direct materials + Direct labor + Variable…
Q: Consider the following information for Presidio Inc.'s most recent year of operations. Number of…
A: Under Full Absorption Income Statement , Gross Profit = Sales - Cost of goods sold Net Operating…
Q: quired: Calculate the direct material and direct labour variances, indicating whether each variance…
A: Variance: A variance reflects the degree by which the actual results vary from the anticipated or…
Q: 4 Lukin Corporation reports the following first year production cost information: Units produced…
A: Absorption Costing: Absorption costing, often known as "full costing," is a management accounting…
Q: A business operated at 100% of capacity during its first month, with the following results: Sales…
A: Contribution margin: Contribution margin is a product's price minus all associated variable costs,…
Q: 8. A business operated at 100% of capacity during its first month, with the following results:…
A: Sales 90,000 Less: Variable Cost of Goods sold Opening Inventory 0 Add: Variable cost…
Q: A manufacturing company two products with the following information for each product: Product AA…
A:
Q: Problem 3 plant-wide overhead rate is used based on direct labor hours as cost allocation base.…
A: By dividing the production overhead cost by the activity driver, the predetermined overhead rate is…
Q: 1) Grover Company has the following data for the production and sale of 2,000 units.…
A: Contribution margin is an excess value of revenue over the variable cost and gross margin is the…
Q: The manufacturing costs of Rosenthal Industries for the first three months of the year follow: Total…
A: Variable cost per unit = (Highest activity cost - Lowest activity cost) / (Highest activity units -…
Q: Assume the following information for a company that produced and sold 10,000 units during its first…
A: Under Absorption costing, both fixed and variable manufacturing costs are included in the cost of…
Q: Problem D. During the month, ABC company produced and sold 12,000 units of product. Manufacturing…
A: Under variable costing , product cost includes only variable cost incurred in manufacturing the…
Q: 2. A company manufacturing two products furnishers the following data for a year: Product Annual…
A: The question is related to Overheads allocation and Activity Based Costing.
Q: Question 1: Denton Company manufactures and sells a single product. Cost data for the product are…
A: Computation of Unit Product Cost - Absorption Costing Particulars Per unit Unit Product Cost:…
Q: The manufacturing costs of Barretto Enterprises for three months of the year follow: Total…
A: High-low method: It is the method in which Fixed cost and variable costs are separated from the…
Q: Like Company manufactures a number of products. The standards relating to one of these products are…
A: Calculation of difference between total Standard Cost and Total Actual Cost Standard Actual…
Q: Question No. 1-2 The estimated costs of producing 6,000 units of a component are: Per Unit Direct…
A: Variable factory overhead refers to those expenses which are involved in the production of goods and…
How to solve total variable cost per month
Step by step
Solved in 2 steps
- Production run size and activity improvement Littlejohn, Inc. manufactures machined parts for the automotive industry. The activity cost associated with Part XX-10 is as follows: Activity Activity-Base Usage Activity Rate = Activity Cost Fabrication 250 dlh 80per dlh 20,000 Setup 10 setups 80 per setup 800 Production control 10 prod, runs 30 per prod, run 300 Moving 10 moves 25 per move 250 Total activity cost per unit 21,350 Estimated units of production 500 Activity cost per unit 42.70 Each unit requires 30 minutes of fabrication direct labor. Moreover, part XX-10 is manufactured in production run sizes of 50 units. Each production run is set up, scheduled (production control), and moved as a batch of 50 units. Management is considering improvements in the setup, production control, and moving activities in order to cut the production run sizes by half. As a result, the number of setups, production runs, and mows will double from 10 to 20. Such improvements are expected to speed the companys ability to respond to customer orders. Setup is reengineered so that it takes 60% of the original cost per setup. Production control software will allow production control effort and cost per production run to decline by 60%. Moving distance was reduced by 40%, thus reducing the cost per mow by the same amount. A. Determine the revised activity cost per unit under the proposed changes. B. Did these improvements reduce the activity cost per unit? C. What cost per unit for setup would be required for the solution in (A) to equal the base solution?The following product costs are available for Kellee Company on the production of eyeglass frames: direct materials, $32,125; direct labor, $23.50; manufacturing overhead, applied at 225% of direct labor cost; selling expenses, $22,225; and administrative expenses, $31,125. The direct labor hours worked for the month are 3,200 hours. A. What are the prime costs? B. What are the conversion costs? C. What is the total product cost? D. What is the total period cost? E. If 6.425 equivalent units are produced, what is the equivalent material cost per unit? F. What is the equivalent conversion cost per unit?Communication The controller of New Wave Sounds Inc. prepared the following product profitability report for management, using activity-based costing methods for allocating both the factory overhead and the marketing expenses. As such, the controller has confidence in the accuracy of this report. Home Theater Speakers Wireless Speakers Wireless Headphones Total Sales 1,500,000 1,200,000 900,000 3,600,000 Cost of goods sold 1,050,000 720,000 810,000 2,580,000 Gross profit 450,000 480,000 90,000 1,020,000 Marketing expenses 600,000 120,000 72,000 792,000 Income from operations (150,000) 360,000 18,000 228,000 In addition, the controller interviewed the vice president of marketing, who provided the following insight into the company's three products: The home theater speakers are an older product that is highly recognized in the marketplace. The wireless speakers are a new product that was just recently bunched. The wireless headphones are a new technology that has no competition in the marketplace, and it is hoped that they will become an important future addition to the companys product portfolio. Initial indications are that the product is well received by customers. The controller believes that the manufacturing costs for all three products are in line with expectations. Based on the information provided: 1. Calculate the ratio of gross profit to sales and the ratio of income from operations to sales for each product. 2. Write a brief (one page) memo using the product profitability report and the calculations in (1) to make recommendations to management with respect to strategies for the three products.
- Hart Manufacturing makes three products. Each product requires manufacturing operations in three departments: A, B, and C. The labor-hour requirements, by department, are as follows: During the next production period the labor-hours available are 450 in department A, 350 in department B, and 50 in department C. The profit contributions per unit are 25 for product 1, 28 for product 2, and 30 for product 3. a. Formulate a linear programming model for maximizing total profit contribution. b. Solve the linear program formulated in part (a). How much of each product should be produced, and what is the projected total profit contribution? c. After evaluating the solution obtained in part (b), one of the production supervisors noted that production setup costs had not been taken into account. She noted that setup costs are 400 for product 1, 550 for product 2, and 600 for product 3. If the solution developed in part (b) is to be used, what is the total profit contribution after taking into account the setup costs? d. Management realized that the optimal product mix, taking setup costs into account, might be different from the one recommended in part (b). Formulate a mixed-integer linear program that takes setup costs provided in part (c) into account. Management also stated that we should not consider making more than 175 units of product 1, 150 units of product 2, or 140 units of product 3. e. Solve the mixed-integer linear program formulated in part (d). How much of each product should be produced and what is the projected total profit contribution? Compare this profit contribution to that obtained in part (c).(Appendix 3A) Separating Fixed and Variable Costs, Service Setting Louise McDermott, controller for the Galvin plant of Veromar Inc., wanted to determine the cost behavior of moving materials throughout the plant. She accumulated the following data on the number of moves (from 100 to 800 in increments of 100) and the total cost of moving materials at those levels of moves: Required: 1. Prepare a scattergraph based on these data. Use cost for the vertical axis and number of moves for the horizontal axis. Based on an examination of the scattergraph, does there appear to be a linear relationship between the total cost of moving materials and the number of moves? 2. Compute the cost formula for moving materials by using the high-low method. Calculate the predicted cost for a month with 550 moves by using the high-low formula. (Note: Round the answer for the variable rate to three decimal places and the answer for total fixed cost and total cost to the nearest dollar.) 3. CONCEPTUAL CONNECTION Compute the cost formula for moving materials using the method of least squares. (Note: For the method of least squares, round the variable rate to two decimal places and total fixed cost and total cost to the nearest dollar.) Using the regression cost formula, what is the predicted cost for a month with 550 moves? What does the coefficient of determination tell you about the cost formula computed by regression? 4. CONCEPTUAL CONNECTION Evaluate the cost formula using the least squares coefficients. Could it be improved? Try dropping the third data point (300, 3,400), and rerun the regression.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
- Use the following information for Brief Exercises 4-27 and 4-28: Quillen Company manufactures a product in a factory that has two producing departments, Cutting and Sewing, and two support departments, S1 and S2. The activity driver for S1 is number of employees, and the activity driver for S2 is number of maintenance hours. The following data pertain to Quillen: Brief Exercises 4-27 (Appendix 4B) Assigning Support Department Costs by Using the Direct Method Refer to the information for Quillen Company above. Required: 1. Calculate the cost assignment ratios to be used under the direct method for Departments S1 and S2. (Note: Each support department will have two ratiosone for Cutting and the other for Sewing.) 2. Allocate the support department costs to the producing departments by using the direct method.Use the following information for Brief Exercises 2-19 and 2-20: Slapshot Company makes ice hockey sticks. Last week, direct materials (wood, paint, Kevlar, and resin) costing 32,000 were put into production. Direct labor of 28,000 (10 workers 200 hours 14 per hour) was incurred. Manufacturing overhead equaled 60,000. By the end of the week, the company had manufactured 500 hockey sticks. Brief Exercise 2-19 Total Product Cost and Per-Unit Product Cost Refer to the information for Slapshot Company above. Required: 1. Calculate the total product cost for last week. 2. Calculate the per-unit cost of one hockey stick that was produced last week.Appendix Absorption costing income statement On June 30, the end of the first month of operations, Tudor Manufacturing Co. prepared the following income statement, based on the variable existing concept: Sales (420,000 units) 7,450,000 Variable cost of goods sold: Variable cost of goods manufactured (500,000 units x 14 per unit) 7,000,000 Less ending inventory (80,000 units x 14 per unit) 1,120,000 Variable cost of goods sold 5,880,000 Manufacturing margin 1,570,000 Variable selling and administrative expenses 80,000 Contribution margin 1,490,000 Fixed costs: Fixed manufacturing costs 160,000 Fixed selling and administrative expenses 75,000 235,000 Income from operations 1,255,000 a. Prepare an absorption costing income statement. b. Reconcile the variable costing income from operations of 1,255,000 with the absorption costing income from operations determined in (a).
- Wrappers Tape makes two products: Simple and Removable. It estimates it will produce 369,991 units of Simple and 146,100 of Removable, and the overhead for each of its cost pools is as follows: It has also estimated the activities for each cost driver as follows: Â How much is the overhead allocated to each unit of Simple and Removable?Cost Classification Loring Company incurred the following costs last year: Required: 1. Classify each of the costs using the following table format. Be sure to total the amounts in each column. Example: Direct materials, 216,000. 2. What was the total product cost for last year? 3. What was the total period cost for last year? 4. If 30,000 units were produced last year, what was the unit product cost?Use the following information for Brief Exercises 4-34 and 4-35: Sanjay Company manufactures a product in a factory that has two producing departments, Assembly and Painting, and two support departments, S1 and S2. The activity driver for S1 is square footage, and the activity driver for S2 is number of machine hours. The following data pertain to Sanjay: Brief Exercises 4-34 (Appendix 4B) Assigning Support Department Costs by Using the Direct Method Refer to the information for Sanjay Company above. Required: 1. Calculate the cost assignment ratios to be used under the direct method for Departments S1 and S2. (Note: Each support department will have two ratiosone for Assembly and the other for Painting.) 2. Allocate the support department costs to the producing departments by using the direct method.