Jansen Company reports the following for its ski department for the year 2019. All of its costs are direct, except as noted. Sales $610,000 445,000 112,000 ($25,000 is indirect) 17,800 ($5, 800 is indirect) 50,000 ($17,300 is indirect) 28,400 (all indirect) Cost of goods sold Salaries Utilities Depreciation Office expenses 1. Prepare a departmental income statement for 2019. 2. & 3. Prepare a departmental contribution to overhead report for 2019. Based on these two performance reports, should Jansen eliminate the ski department?

Jansen Company reports the following for its ski department for the year 2019. All of its costs are direct, except as noted. Sales $610,000 445,000 112,000 ($25,000 is indirect) 17,800 ($5, 800 is indirect) 50,000 ($17,300 is indirect) 28,400 (all indirect) Cost of goods sold Salaries Utilities Depreciation Office expenses 1. Prepare a departmental income statement for 2019. 2. & 3. Prepare a departmental contribution to overhead report for 2019. Based on these two performance reports, should Jansen eliminate the ski department?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 22E: Ellerson Company provided the following information for the last calendar year: During the year,...

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Ellerson Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 278,000, direct labor cost was 189,000, and overhead cost was 523,000. During the year, 100,000 units were completed. Refer to Exercise 2.21. Last calendar year, Ellerson recognized revenue of 1,312,000 and had selling and administrative expenses of 204,600. Required: 1. What is the cost of goods sold for last year? 2. Prepare an income statement for Ellerson for last year.
Refer to RE22-2. Assume Heller Company had sales revenue of 510,000 in 2019 and 650,000 in 2020. Prepare Hellers partial income statements (through gross profit) for 2019 and 2020. RE22-2 Heller Company began operations in 2019 and used the LIFO method to compute its 300,000 cost of goods sold for that year. At the beginning of 2020, Heller changed to the FIFO method. Heller determined that its cost of goods sold under FIFO would have been 250,000 in 2019. For 2020, Hellers cost of goods sold under FIFO was 360,000, while it would have been 410,000 under LIFO. Heller is subject to a 21% income tax rate. Compute the cumulative effect of the retrospective adjustment on prior years income (net of taxes) that Heller would report on its retained earnings statement for 2020.
Park and West, LLC, provides consulting services to retail merchandisers in the Midwest. In 2019, they generated $720,000 in service revenue. Their total cost (fixed and variable) per client was $2,500 and they served 115 clients during the year. If operating expenses for the year were $302,000 what was their net income?
Profit center responsibility reporting On-Demand Sports Co. operates two divisions—the Action Sports Division and the Team Sports Division. The following income and expense accounts were provided as of November 30. 20Y1, the end of the current fiscal year, after all adjustments, including those for inventories, were recorded The bases to be used in allocating expenses, together with other essential information, are as follows a.Advertising expense—incurred al headquarters, charged back to divisions on the basis of usage: Action Sports Division. $1,200,000; Team Sports Division, $1,800,000. b. Transportation expense—charged hack lo divisions at a charge rale of $18.50 per bill of lading: Action Sports Division, 14.000 bills of lading; Team Sports Division. 21.400 bills of lading. C. Accounts receivable collection expense—incurred al headquarters, charged back to divisions at a charge rate of $9-00 per invoice: Action Sports Division. 32.000 sales invoices; Team Sports Division, 12.500 sales invoices. d. Warehouse expense—charged back to divisions on the basis of floor space used in storing division products: Action Sports Division. 120.000 square feet; Team Sports Division. 80.000 square feet. Prepare divisional income statements with two column headings: Action Sports Division and Team Sports Division. Provide supporting schedules for determining service department charges.
Williams Company began operations in January 2019 with two operating (selling) departments and one service (office) department. Its departmental income statements follow. WILLIAMS COMPANYDepartmental Income StatementsFor Year Ended December 31, 2019 Clock Mirror Combined Sales $ 170,000 $ 95,000 $ 265,000 Cost of goods sold 83,300 58,900 142,200 Gross profit 86,700 36,100 122,800 Direct expenses Sales salaries 22,000 7,000 29,000 Advertising 1,700 500 2,200 Store supplies used 1,000 300 1,300 Depreciation—Equipment 1,700 400 2,100 Total direct expenses 26,400 8,200 34,600 Allocated expenses Rent expense 7,030 3,780 10,810 Utilities expense 2,800 2,500 5,300 Share of office department expenses 11,000 10,500 21,500 Total allocated expenses 20,830 16,780 37,610 Total expenses…
Following are the data extracted from Alma Corporation, at the end of December 1, 2019: Sales …………14,000,500 Sales Return ……………. P 25,200 Purchases (net) . 2,400,000 Transportation inward … 32,000 Direct Labor …… 3,204,000 FOH (total) ………………….1,885,600 Sales salaries ….. 200,000 Advertising expense…… 155,000 Delivery Expense 65,000 During the year 25,000 units were completed: Inventories December, 2019 January, 2019 Finished Goods ………… P 467,400 ……………. P 620,000 Work in Process ……………….. 136,800 ..…………... 129,800 Materials …………………………. 196,000 …................. 176,000 Required: Compute for the following: (Show your solution in the space provided) 1. Total Factory Cost 2. Cost of Goods Manufactured 3. Per unit cost of goods manufactured 4. Cost of Goods Sold 5. Gross Profit and Net Profit
The sales of Flamingo Manufacturing Corp. in 2021 is P6,100,000. The cost of goods manufactured is P4,800,000. The beginning inventories of goods in process and finished goods are P820,000 and P650,000 respectively. The ending inventories are: Goods in process - P750,000; Finished Goods - P550,000. The selling expenses and general and administrative expenses are 5% and 2.5% of cost of goods sold, respectively. Sales returns and sales discounts are P100,000 and P200,000 respectively. What is Flamingo's profit for the year 2021?
Company X reports $200,000 in sales of Widgets in 2019. The Costs of Goods sold for these Widgets is $90,000. All other operating expenses (SG&A, R&D, Depreciation, Other, etc.) are $50,000. Which of the following is the correct representation of the profitability ratios: Gross Profit Margin 45%, Operating Margin 30%. Gross Profit Margin 55%, Operating Margin 30%. Gross Profit Margin 45%, Operating Margin 20%. Gross Profit Margin 55%, Operating Margin 20%.
Operating results for Division A of Alpha Company during 2019 are as follows: Sales $480,000 Cost of goods sold 297,600 Gross profit 182,400 Direct expenses 32,400 Common expenses 54,000 Total expenses 86,400 Net income $96,000 If Division A would maintain the same quantity of product sold while raising selling prices by 6% and making additional advertising expenditures of $36,000, what would be the effect on the Division’s net income? (Ignore income taxes in your calculations.) Select one: a. Net income would decrease by $7,200 b. Net income would increase by $28,800 c. Net income would increase by $36,000 d. Net income would decrease by $28,800 e. Net income would increase by $7,200
Spades Company provided the following information for the year ended December 31, 2022: Sales 8,000,000Sales salaries 520,000Advertising 120,000Indirect labor 600,000Delivery expense 160,000Freight in 80,000Depreciation – machinery 50,000Factory taxes 130,000Purchases 1,600,000Direct labor 1,480,000Factory supplies expense 120,000Office supplies expense 30,000Office salaries 800,000Factory superintendence 480,000Doubtful accounts 100,000Factory maintenance 150,000Factory heat, light and power 220,000Income tax expense 170,000 Doubtful accounts are common costs allocated to administrative expenses and selling expense equally. Inventory balancesat the end of the fiscal period as compared with balances at the beginning of the fiscal period were as follows: Finished goods 200,000 IncreaseGoods in process 90,000 IncreaseRaw materials 100,000 Decrease Tax rate is 30%. 1. What is the amount of cost of goods sold for the current period?2. What is the amount of general and administrative…
Spades Company provided the following information for the year ended December 31, 2022: Sales 8,000,000Sales salaries 520,000Advertising 120,000Indirect labor 600,000Delivery expense 160,000Freight in 80,000Depreciation – machinery 50,000Factory taxes 130,000Purchases 1,600,000Direct labor 1,480,000Factory supplies expense 120,000Office supplies expense 30,000Office salaries 800,000Factory superintendence 480,000Doubtful accounts 100,000Factory maintenance 150,000Factory heat, light and power 220,000Income tax expense 170,000 Doubtful accounts are common costs allocated to administrative expenses and selling expense equally. Inventory balancesat the end of the fiscal period as compared with balances at the beginning of the fiscal period were as follows: Finished goods 200,000 IncreaseGoods in process 90,000 IncreaseRaw materials 100,000 Decrease Tax rate is 30%. 1. What is the amount of cost of goods sold for the current period?2. What is the amount of general and administrative…
Spades Company provided the following information for the year ended December 31, 2022: Sales 8,000,000Sales salaries 520,000Advertising 120,000Indirect labor 600,000Delivery expense 160,000Freight in 80,000Depreciation – machinery 50,000Factory taxes 130,000Purchases 1,600,000Direct labor 1,480,000Factory supplies expense 120,000Office supplies expense 30,000Office salaries 800,000Factory superintendence 480,000Doubtful accounts 100,000Factory maintenance 150,000Factory heat, light and power 220,000Income tax expense 170,000 Doubtful accounts are common costs allocated to administrative expenses and selling expense equally. Inventory balancesat the end of the fiscal period as compared with balances at the beginning of the fiscal period were as follows: Finished goods 200,000 IncreaseGoods in process 90,000 IncreaseRaw materials 100,000 Decrease Tax rate is 30%. Questions 3. What is the amount of selling and distribution expense for the current period?4. How much is the net income for…