ITACU manufacturing overhead cost was deferred or released from inventory during Year 4? EXERCISE 6-4 Basic Segmented Income Statement [LO6-4] Royal Lawncare Company produces and sells two packaged products, Weedban and Greengrow. Revenue and cost information relating to the products follow: Product Weedban Greengrow Selling price per unit Variable expenses per unit Traceable fixed expenses per year . $6.00 $2.40 $45,000 $7.50 $5.25 $21,000 Common fixed expenses in the company total $33,000 annually. Last year the company produced and sold 15,000 units of Weedban and 28,000 units of Greengrow. Required: Prepare a contribution format income statement segmented by product lines.

ITACU manufacturing overhead cost was deferred or released from inventory during Year 4? EXERCISE 6-4 Basic Segmented Income Statement [LO6-4] Royal Lawncare Company produces and sells two packaged products, Weedban and Greengrow. Revenue and cost information relating to the products follow: Product Weedban Greengrow Selling price per unit Variable expenses per unit Traceable fixed expenses per year . $6.00 $2.40 $45,000 $7.50 $5.25 $21,000 Common fixed expenses in the company total $33,000 annually. Last year the company produced and sold 15,000 units of Weedban and 28,000 units of Greengrow. Required: Prepare a contribution format income statement segmented by product lines.

Financial & Managerial Accounting

14th Edition

ISBN:9781337119207

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter18: Activity-Based Costing

Section: Chapter Questions

Problem 3ADM: Production run size and activity improvement Littlejohn, Inc. manufactures machined parts for the...

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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?
Direct material costs $3 per unit, direct labor costs $5 per unit, and overhead is applied at the rate of 100% of the direct labor cost. What is the value of the Inventory transferred to the next department if beginning inventory was 2,000 units; 9,000 units were started; and 1.000 units were in ending inventory? A. $1,000 B. $13,000 C. $130.000 D. $20.000
Exercise 6-9 (Algo) Variable and Absorption Costing Unit Product Costs and Income Statements [LO6-1, LO6-2, LO6-3] Walsh Company manufactures and sells one product. The following information pertains to each of the company’s first two years of operations: Variable costs per unit: Manufacturing: Direct materials $ 25 Direct labor $ 13 Variable manufacturing overhead $ 3 Variable selling and administrative $ 2 Fixed costs per year: Fixed manufacturing overhead $ 320,000 Fixed selling and administrative expenses $ 90,000 During its first year of operations, Walsh produced 50,000 units and sold 40,000 units. During its second year of operations, it produced 40,000 units and sold 50,000 units. The selling price of the company’s product is $56 per unit. Required: 1. Assume the company uses variable costing: a. Compute the unit product cost for Year 1 and Year 2. b. Prepare an income statement for Year 1 and Year 2. 2. Assume the company uses absorption…
Exercise 6-4 (Algo) Basic Segmented Income Statement [LO6-4] Royal Lawncare Company produces and sells two packaged products-Weedban and Greengrow. Revenue and cost information relating to the products follow: Last year the company produced and sold 35,500 units of Weedban and 24,000 units of Greengrow. Its annual common fixed expenses are $109,000. Required: Prepare a contribution format income statement segmented by product lines.
Problem 1-24 (Algo) Different Cost Classifications for Different Purposes [LO1-1, LO1-2, LO1-3, LO1-4, LO1-5] Dozier Company produced and sold 1,000 units during its first month of operations. It reported the following costs and expenses for the month: Direct materials $ 72,000 Direct labor $ 36,500 Variable manufacturing overhead $ 16,200 Fixed manufacturing overhead 28,900 Total manufacturing overhead $ 45,100 Variable selling expense $ 12,600 Fixed selling expense 19,200 Total selling expense $ 31,800 Variable administrative expense $ 4,300 Fixed administrative expense 25,600 Total administrative expense $ 29,900 Required: 1. With respect to cost classifications for preparing financial statements: a. What is the total product cost? b. What is the total period cost? 2. With respect to cost classifications for assigning costs to cost objects: a. What is total direct manufacturing cost? b. What is the total indirect manufacturing…
Problem 6-18 (Algo) Variable and Absorption Costing Unit Product Costs and Income Statements [LO6-1, LO6-2] Haas Company manufactures and sells one product. The following information pertains to each of the company’s first three years of operations: Variable costs per unit: Manufacturing: Direct materials $ 24 Direct labor $ 16 Variable manufacturing overhead $ 4 Variable selling and administrative $ 1 Fixed costs per year: Fixed manufacturing overhead $ 220,000 Fixed selling and administrative expenses $ 140,000 During its first year of operations, Haas produced 40,000 units and sold 40,000 units. During its second year of operations, it produced 55,000 units and sold 30,000 units. In its third year, Haas produced 20,000 units and sold 45,000 units. The selling price of the company’s product is $54 per unit. Required: b. Prepare an income statement for Year 1, Year 2, and Year 3.
Under- and overapplied overhead (LO 6) Kim-Brooks, Inc. makes costumes for movies and television shows. Brooks Kimberly, the company's owner, prepared the following estimates for the upcoming year: Manufacturing overhead cost $800,000 Direct labor hours 50,000 Direct labor cost $250,000 Machine hours 40,000 Required a.Assume that Kim-Brooks applies manufacturing overhead on the basis of direct labor hours. During the year, 49,800 direct labor hours were worked. How much overhead was applied to work in process? If actual manufacturing overhead for the year was $792,000, was overhead under- or overapplied during the year? By how much? bAssume that Kim-Brooks applies manufacturing overhead on the basis of direct labor cost. During the year, $245,000 in direct labor cost was incurred. How much overhead was applied to work in process during the year? If actual manufacturing overhead for the year was $792,600, was overhead under- or overapplied during the year? By how…
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
Question Q1Moona Inc. produces Mobile phones. Information of the company's operations last year appear below: Fixed cost:Fixed Manufacturing overhead Rs 40,000Fixed Selling & Administrative Rs 60,000Selling Price per unit Rs 100Variable cost per unit:Direct Materials Rs 30Direct labor Rs 10Variable Manufacturing overhead Rs 5Variable Selling & Administrative Rs 2Units In beginning Inventory 0Units Produced 2000Units Sold 1900 Required: a. Compute the unit product cost under both absorption and variable costing.b. Prepare an income statement for the year using absorption costing.c. Prepare a contribution format income statement for the year using variable costing. d. Prepare a report reconciling the difference in net operating income between absorption and variable costing for the year.
NORMAL LOSS – FIFO SUCCEEDING DEP’T The following data pertain to the production of the second department of Sumi Manufacturing Corp. for the month of March: WIP, beg 5,000 units ; ½ done Received from department A 20,000 units @ P1 WIP, end 6,000 units; 2/3 done Lost units 2,000 units Cost data: WIP, beg P14,100 Cost this Dep’t Materials 39,900 Direct labor 23,940 Factory Overhead 15,960 Factory costs are evenly applied and all lost units were considered normal. Required: Prepare the cost of production report of Department B for the month of March assuming the following independent cases: [a] Loss occurred at the start of process; [b] Loss occurred during process; [c] Loss occurred at the end of process.
MC Qu. 8-38 Riverton Corp., which began business... Riverton Corp., which began business at the start of the current year, had the following data:Planned and actual production: 40,000 unitsSales: 37,000 units at $15 per unitProduction costs:Variable: $4 per unitFixed: $260,000Selling and administrative costs:Variable: $1 per unitFixed: $32,000The gross margin that the company would disclose on an absorption-costing income statement is: Multiple Choice $97,500. $147,000. $166,500. $370,000. None of the answers is correct. I got 407,000 as an answer but worried that's not correct
Product costing-manufacturing overhead [LO 5] Winners, Inc.,manufactures women’s boating shoes. Manufacturing overhead is assigned toproduction on a machine-hour basis. For 2010, it was estimated thatmanufacturing overhead would total $353,730 and that 29,460 machine hourswould be used. Required: (a) Calculate thepredetermined overhead application rate that will be used for absorptioncosting purposes during 2010. (Round youranswer to 2 decimal places. Omit the “$” sign in your response.) Predeterminedoverhead application rate $ (b) During May, 3,700pairs of shoes were made. Raw materials costing $6,770 were used, and directlabor costs totaled $9,350. A total of 770 machine hours were worked duringthe month of May. Calculate the cost per pair of shoes made during May. (Round your intermediate calculations and final answerto 2 decimal places. Omit the “$” sign in your response.) Costper pair of shoes $ (c) At the end of May,1,310 pairs of shoes were in ending inventory. Calculate the…