Exercise 3-4A (Algo) Determining variable cost from incomplete cost data LO 3-1Gibson Corporation produced 204,000 watches that it sold for $17 each during year 2. The company determined that fixedmanufacturing cost per unit was $8 per watch. The company reported a $612,000 gross margin on its year 2 financial statements.RequiredDetermine the variable cost per unit, the total variable cost, and the total contribution margin.

Contribution margin is sales minus variable cost. This is a portion of sales which is not consumed…

Answered: Exercise 3-4A (Algo) Determining…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Exercise 1-8 Product Costs and Period Costs; Variable and Fixed Costs [LO1-3, LO1-4] Kubin Company’s relevant range of production is 22,000 to 27,000 units. When it produces and sells 24,500 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 8.20 Direct labor $ 5.20 Variable manufacturing overhead $ 2.70 Fixed manufacturing overhead $ 6.20 Fixed selling expense $ 4.70 Fixed administrative expense $ 3.70 Sales commissions $ 2.20 Variable administrative expense $ 1.70 Required: 1. For financial accounting purposes, what is the total amount of product costs incurred to make 24,500 units? 2. For financial accounting purposes, what is the total amount of period costs incurred to sell 24,500 units? 3. For financial accounting purposes, what is the total amount of product costs incurred to make 27,000 units? 4. For financial accounting purposes, what is the total amount of period costs incurred to sell 22,000 units?
TF 3 The following data was prepared by the Oriole Company. Total Variable Fixed Sales price $22/unit Direct materials used $82,650 Direct labor $96,000 Manufacturing overhead $113,670 $17,910 $95,760 Selling and administrative expense $22,700 $13,100 $9,600 Units manufactured 25,200 units Beginning Finished Goods Inventory 19,200 units Ending Finished Goods Inventory 7,000 units Cost of goods sold $ Under variable costing, what is the cost of goods sold? (Round cost per unit to 2 decimal places, e.g. 2.52 and final answer to 0 decimal place, e.g. 2,152.) Cost of goods sold$ Under absorption costing, what is the operating income? (Round cost per unit to 2 decimal places, e.g. 2.52 and final answer to 0 decimal place, e.g. 2,152.) Operating income $ Under variable costing, what is the operating income? (Round cost per unit to 2 decimal places, e.g. 2.52 and…
Problem 3-54 (Algo) CVP Analysis and Price Changes (LO 3-1) Littlefield Partners produce a part sold to agricultural equipment suppliers. For the last year (Year 1), the price, costs, and volume of the part were as follows: Unit price $ 80 Unit variable cost $ 60 Annual fixed cost $ 3,220,000 Sales volume 232,200 units Managers at Littlefield believe that next year (Year 2), conditions in the industry will result in lower prices, both for the part they sell and the materials they purchase. Their best estimates at this time are that the selling price will decline by 10 percent while the unit variable cost will decline by 5 percent, taking into account the changes in both materials and labor. They believe that fixed costs will remain the same.
question 2 High-Low Method The manufacturing costs of Ackerman Industries for the first three months of the year follow: Total Costs Units Produced January $103,680 1,680 units February 153,680 3,110 March 161,280 4,080 Using the high-low method, determine (a) the variable cost per unit and (b) the total fixed cost. Round all answers to the nearest whole dollar. a. Variable cost per unit $fill in the blank 1 b. Total fixed cost $fill in the blank 2
TF 3 The following data was prepared by the Oriole Company. Total Variable Fixed Sales price $22/unit Direct materials used $82,650 Direct labor $96,000 Manufacturing overhead $113,670 $17,910 $95,760 Selling and administrative expense $22,700 $13,100 $9,600 Units manufactured 25,200 units Beginning Finished Goods Inventory 19,200 units Ending Finished Goods Inventory 7,000 units Incorrect answer iconYour answer is incorrect. Under absorption costing, what is the cost of goods sold? (Round cost per unit to 2 decimal places, e.g. 2.52 and final answer to 0 decimal place, e.g. 2,152.) Cost of goods sold $enter the cost of goods sold in dollars rounded to 0 decimal places
T3-2 Variable costing versus absorption costing (LO 1, 2) Fiendish Friends makes Halloween costumes. The company incurred the following total costs to produce 25,000 costumes. Direct materials $200,000 Direct labor 150,000 Variable overhead 50,000 Fixed overhead 100,000 Questions a.Under the absorption costing method, what is the average unit product cost? Using this method, how much product cost would be recorded on the income statement if 20,000 units were sold? b.Under the variable costing method, what is the average unit product cost? Using this method, how much product cost would be recorded on the income statement if 20,000 units were sold?
MANAGEMENT ACCOUNTING ANSWER QUESTION 3 AND 4 ONLY The following information is extracted from Kobena Company’s records for Product A, Period 1; Units produced 18,000 units Units sold (RM27 per unit) 17,200 units Budgeted units 18,000 units Variable production cost per unit RM17 Fixed cost: Fixed production overheads Fixed administration costs RM45,000 RM13,000 There were no opening inventories at the beginning of the period. By referring to the information given for Product A, you are required to: i) Calculate the predetermined overheads absorption rate per unit based on unit of production. ii) Calculate total production cost per unit. iii) The value of closing inventory in Ringgit Malaysia (RM). iv) Prepare Absorption Costing Statement of Profit and Loss for Period 1.
PROBLEM 2 Elsa, Inc., has only variable costs and fixed costs. A review of the company's records disclosed that when 100,000 units were produced, fixed manufacturing costs amounted to $200,000 and the cost per unit manufactured totaled $5. On the basis of this information, how much cost would the firm anticipate at an activity level of 97,000 units? A. $485,000. B. $491,000. C. $494,000. D. $500,000.
High-Low Method The manufacturing costs of Ackerman Industries for the first three months of the year follow: Total Costs Units Produced January $172,800 2,600 units February 211,970 4,780 March 268,800 6,600 Using the high-low method, determine (a) the variable cost per unit and (b) the total fixed cost. Round all answers to the nearest whole dollar. a. Variable cost per unit $fill in the blank 1 b. Total fixed cost $fill in the blank 2
Exercise 4-6 (Algo) Variable and Absorption Costing Unit Product Costs and Income Statements [LO4-1, LO4-2] Lynch Company manufactures and sells a single product. The following costs were incurred during the company’s first year of operations: Variable costs per unit: Manufacturing: Direct materials $ 11 Direct labor $ 3 Variable manufacturing overhead $ 1 Variable selling and administrative $ 1 Fixed costs per year: Fixed manufacturing overhead $ 330,000 Fixed selling and administrative $ 240,000 During the year, the company produced 30,000 units and sold 23,000 units. The selling price of the company’s product is $43 per unit. Required: Assume that the company uses absorption costing: Compute the unit product cost. Prepare an income statement for the year. Assume that the company uses variable costing: Compute the unit product cost. Prepare an income statement for the year. Do not give answer in image
EB5. 2.2 Baxter Company has a relevant range of production between 15,000 and 30,000 units. The following cost data represents average variable costs per unit for 25,000 units of production. Using the costs data from Rose Company, answer the following questions: Average Cost per Unit DM 10 DL 9 Indirect Materials 3 Fixed MOH 6 Variable MOH 2 Fixed S&A Expense 8 Variable Sales Commission 14 A. If 15,000 units are produced, what is the variable cost per unit? B. If 28,000 units are produced, what is the variable cost per unit? C. If 21,000 units are produced, what are the total variable costs? D. If 29,000 units are produced, what are the total variable costs? E. If 17,000 units are produced, what are the total manufacturing overhead costs incurred? F. If 23,000 units are produced, what are the total manufacturing overhead costs incurred? G. If 30,000 units are produced, what are the per unit…
High-Low Method The manufacturing costs of Kellam Industries for the first three months of the year follow: Total Costs Units Produced January $223,200 1,395 units February 262,380 2,710 March 347,200 4,495 Using the high-low method, determine (a) the variable cost per unit and (b) the total fixed cost. a. Variable cost per unit $fill in the blank 1 b. Total fixed cost $fill in the blank 2

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