Gia's Foods produces frozen meals, which it sells for $8 each. The company computes a new monthly fixed manufacturing overhead rate based on the planned number of meals to be produced that month. All costs and production levels are exactly as planned. The following data are from Gia's Foods first month in business. Sales Production Variable manufacturing cost per meal Sales commission cost per meal January 2007 1,000 meals 1,400 meals $4.00 $1.00
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- A company sells mulch by the cubic yard. Grade A much sells for $150 per cubic yard and has variable costs of $65 per cubic yard. The company has fixed expenses of $15,000 per month. In August, the company sold 240 cubic yards of Grade A mulch. A. Calculate the contribution margin per unit for Grade A mulch. B. Calculate the contribution margin ratio of the Grade A mulch. C. Prepare a contribution margin income statement for the month of August.Total Pops data show the following information: New machinery will be added in April. This machine will reduce the labor required per unit and increase the labor rate for those employees qualified to operate the machinery. Finished goods inventory is required to be 20% of the next months requirements. Direct material requires 2 pounds per unit at a cost of $3 per pound. The ending inventory required for direct materials is 15% of the next months needs. In January, the beginning inventory is 3,000 units of finished goods and 4,470 pounds of material. Prepare a production budget, direct materials budget, and direct labor budget for the first quarter of the year.A company manufactures and sells blades that are used in riding lawnmowers. The 18-inch blade sells for $15 and has per-unit variable costs of $4 associated with its production. The company has fixed expenses of $85,000 per month. In January, the company sold 12,000 of the 18-inch blades. A. Calculate the contribution margin per unit for the 18-inch blade. B. Calculate the contribution margin ratio of the 18-inch blade. C. Prepare a contribution margin income statement for the month of January.
- Genuine Spice Inc. began operations on January 1 of the current year. The company produces 8-ounce bottles of hand and body lotion called Eternal Beauty. The lotion is sold wholesale in 12-bottle cases for 100 per case. There is a selling commission of 20 per case. The January direct materials, direct labor, and factory overhead costs are as follows: DIRECT MATERIALS Cost Behavior Units per Case Cost per Unit Direct Materials Cost per Case Cream base Variable 100 ozs. 0.02 2.00 Natural oils Variable 30ozs. 0.30 9.00 Bottle (8-OZ-) Variable 12 bottles 0.50 6.00 17.00 DIRECT LABOR Department Cost Behavior Time per Case Labor Rate per Hour Direct Labor Cost per Case Mixing Variable 20 min. 18.00 6.00 Filling Variable 5 14.40 1.2 25 min. 7.20 FACTORY OVERHEAD Cost Behavior Total Cost Utilities Mixed 600 Facility lease Fixed 14,000 Equipment depreciation Fixed 4,300 Supplies Fixed 660 19,560 Part ABreak-Even Analysis The management of Genuine Spice Inc. wishes to determine the number of cases required to break even per month. The utilities cost, which is part of factory overhead, is a mixed cost. The following information was gathered from the first six months of operation regarding this cost: Month Case Production Utility Total Cost January 500 600 February 800 660 March 1,200 740 April 1,100 720 May 950 690 June 1,025 705 Instructions 1. Determine the fixed and variable portions of the utility cost using the high-low method. 2. Determine the contribution margin per ease. 3. Determine the fixed costs per month, including the utility fixed cost from part (1). 4. Determine the break-even number of cases per month. Part BAugust Budgets During July of the current year, the management of Genuine Spice Inc. asked the controller to prepare August manufacturing and income statement budgets. Demand was expected to be 1,500 cases at 100 per case for August. Inventory planning information is provided as follows: Finished Goods Inventory: Cases Cost Estimated finished goods inventory, August 1 300 12,000 Desired finished goods inventory, August 31 175 7,000 Materials Inventory: Cream Base (ozs.) Oils (ozs.) Bottles (bottles) Estimated materials inventory, August 1 250 290 600 Desired materials inventory, August 31 1,000 360 240 There was negligible work in process inventory assumed for either the beginning or end of the month; thus, none was assumed. In addition, there was no change in tile cost per unit or estimated units per case operating data from January. Instructions 5. Prepare the August production budget. 6. Prepare the August direct materials purchases budget. 7. Prepare the August direct labor budget. Round the hours required for production to the nearest hour. 8. Prepare the August factory overhead budget. 9. Prepare the August budgeted income statement, including selling expenses. Part CAugust Variance Analysis During September of the current year, the controller was asked to perform variance analyses for August. The January operating data provided the standard prices, rates, times, and quantities per case. There were 1,500 actual cases produced during August, which was 250 more cases than planned at the Beginning of the month. Actual data for August were as follows: Actual Direct Materials Price per Unit Actual Direct Materials Quantity per Case Cream base 0.016 per oz. 102 ozs. Natural oils 0.32 per oz. 31 ozs. Bottle (8 oz.) 0.42 per bottle 12.5 bottles Actual Direct Labor Rate Actual Direct Labor Time per Case Mixing 18.20 19.50 min. Filling 14.00 5.60 min. Actual variable overhead 305.00 Normal volume 1,600 cases The prices of the materials were different than .standard due to fluctuations in market prices. The standard quantity of materials used per case was an ideal standard. The Mixing Department used a higher grade labor classification during the month, thus causing the actual labor rale to exceed standard. The Filling Department used a lower grade labor classification during the month, thus causing the actual labor rate to be less titan standard. Instructions 10. Determine and interpret the direct materials price and quantity variances for the three materials. 11. Determine and interpret the direct labor rate and time variances for the two departments. Round hours to the nearest hour. 12. Determine and interpret the factory overhead controllable variance. 13. Determine and interpret the factory overhead volume variance. 14. Why are the standard direct labor and direct materials costs in the calculations for parts (10) and (11) based on the actual 1,500-case production volume rather than the planned 1,250 cases of production used in the budgets for parts (6) and (7)?Western Trucking operates a fleet of delivery trucks. The fixed expenses to operate the fleet are $79,900 in March and rose to $93,120 in April. It costs Western Trucking $0.15 per mile in variable costs. In March, the delivery trucks were driven a total of 85,000 miles, and in April,. they were driven a total of 96,000 miles. Using this information, answer the following: A. What were the total costs to operate the fleet in March and April, respectively? B. What were the cost per mile to operate the fleet in March and April, respectively?SmokeCity, Inc., manufactures barbeque smokers. Based on past experience, SmokeCity has found that its total annual overhead costs can be represented by the following formula: Overhead cost = 543,000 + 1.34X, where X equals number of smokers. Last year, SmokeCity produced 20,000 smokers. Actual overhead costs for the year were as expected. Required: 1. What is the driver for the overhead activity? 2. What is the total overhead cost incurred by SmokeCity last year? 3. What is the total fixed overhead cost incurred by SmokeCity last year? 4. What is the total variable overhead cost incurred by SmokeCity last year? 5. What is the overhead cost per unit produced? 6. What is the fixed overhead cost per unit? 7. What is the variable overhead cost per unit? 8. Recalculate Requirements 5, 6, and 7 for the following levels of production: (a) 19,500 units and (b) 21,600 units. (Round your answers to the nearest cent.) Explain this outcome.
- Income Statements under Absorption and Variable Costing In the coming year, Kalling Company expects to sell 28,700 units at 32 each. Kallings controller provided the following information for the coming year: Required: 1. Calculate the cost of one unit of product under absorption costing. 2. Calculate the cost of one unit of product under variable costing. 3. Calculate operating income under absorption costing for next year. 4. Calculate operating income under variable costing for next year.Fresno Industries Inc. manufactures and sells high-quality camping tents. The company began operations on January 1 and operated at 100% of capacity (150,000 units) during the first month, creating an ending inventory of 20,000 units. During February, the company produced 130,000 units during the month but sold 150,000 units at 500 per unit. The February manufacturing costs and selling and administrative expenses were as follows: a. Prepare an income statement according to the absorption costing concept for the month ending February 28. b. Prepare an income statement according to the variable costing concept for for the month ending February 28. c. What is the reason for the difference in the amount of operating income reported in (a) and (b)?The expected costs for the Maintenance Department of Stazler, Inc., for the coming year include: Fixed costs (salaries, tools): 64,900 per year Variable costs (supplies): 1.35 per maintenance hour Estimated usage by: Actual usage by: Required: 1. Calculate a single charging rate for the Maintenance Department. 2. Use this rate to assign the costs of the Maintenance Department to the user departments based on actual usage. Calculate the total amount charged for maintenance for the year. 3. What if the Assembly Department used 4,000 maintenance hours in the year? How much would have been charged out to the three departments?
- Gia foods produce frozen meal, which it sellls fro $8 each. the company computes a new monthly fixed manufacturing overhead rate based on the planned number of meals to be produced that month. all costs and production levels are exactly as planned. the following data are from GIA'S Foods first month in business. sales 1000 meal production 1400 meals variable maznufacturing cost per meal 400 sales commission cost per meal 100 total fixed manufacturing overhead 700 total fixed marketing and administrative cost 600 A) compute the product cost per meal produced under absorption costing and under variable costing. B) prepare the income statement for January 2007 using variable costing c) list three situation in which marginal costing as a technique aids decision making.Topic Marginal costing. Gia’s Foods produces frozen meals, which it sells for $8 each. The company computes a new monthly fixed manufacturing overhead rate based on the planned number of meals to be produced that month. All costs and production levels are exactly as planned. The following data are from Gia’s Foods first month in business. Sales 1,000 meals Production 1400meals Variable manufacturing cost per meal $4.00 Sales commission cost per meal $1.00 Total fixed manufacturing overhead…stella'sFoods produces frozen meals that it sells for$11each. The company computes a new monthly fixed manufacturing overhead allocation rate based on the planned number of meals to be produced that month. Assume all costs and production levels are exactly as planned. The following data are fromStella'sFoods's first month in business units produced and sold sales 800 meals production 1100 meals $ variable manufacturing of meals 5 sales commission cost per meal 1 total fixed manufacturing overhead 385 total fixed selling and administrative cost 700 REQUIREMENTS Compute the product cost per meal produced under absorption costing and under variable costing. (Round your answers to the nearest cents Prepare income…