Please do not give solution in image format thanku Prepare an absorption-costing income statement, with one column showing the results if 220.000 units are produced and onecolumn showing the results if 250,000 units are produced.Units producedUnits soldKINGBIRDMOTORS DIVISIONIncome StatementFor the Year Ended 2022Absorption Costing250,000220,000 Kingbird Motors is a division of Kingbird Products Corporation. The division manufactures and sells an electric switch used in a widevariety of applications. During the coming year, it expects to sell 220,000 units for $8.00 per unit. Helen Martin is the divisionmanager. She is considering producing either 220,000 or 250,000 units during the period. Other information is as follows:Beginning inventoryExpected sales in unitsSelling price per unitVariable manufacturing cost per unitFixed manufacturing cost (total)Fixed manufacturing overhead costs per unitBased on 220,000 unitsBased on 250,000 unitsManufacturing cost per unitBased on 220,000 unitsBased on 250,000 unitsDivision Information for 2022Variable selling and administrative expensesDastu vit 220, VVU naBased on 250,000 units0Manufacturing cost per unitBased on 220,000 unitsBased on 250,000 unitsVariable selling and administrative expensesFixed selling and administrative expenses (total)220,000$8.00$2.10$550,000$2.50 per unit ($550,000+220,000)$2.20 per unit ($550,000+250,000)$4.60 per unit ($2.10 variable + $2.50 fixed)$4.30 per unit ($2.10 variable + $2.20 fixed)$0.45 per unit$2.20 per unit ($550,000+ 250,000)$4.60 per unit ($2.10 variable + $2.50 fixed)$4.30 per unit ($2.10 variable + $2.20 fixed)$0.45 per unit$11,300

The income statement is one of the financial statements of the business. It tells about the…

Kingbird Motors is a division of Kingbird Products Corporation. The division manufactures and sells an electric switch used in a wide variety of applications. During the coming year, it expects to sell 220,000 units for $8.00 per unit. Helen Martin is the division manager. She is considering producing either 220,000 or 250,000 units during the period. Other information is as follows: eginning inventory pected sales in units elling price per unit ariable manufacturing cost per unit ixed manufacturing cost (total) ixed manufacturing overhead costs per unit. Based on 220,000 units Based on 250,000 units Division Information for 2022 Manufacturing cost per unit Based on 220,000 units Based on 250,000 units Variable selling and administrative expenses 0 220,000 $8.00 $2.10 $550,000 $2.50 per unit ($550,000+220,000) $2.20 per unit ($550,000+ 250,000) $4.60 per unit ($2.10 variable+ $2.50 fixed) $4.30 per unit ($2.10 variable + $2.20 fixed) $0.45 per unit

Kingbird Motors is a division of Kingbird Products Corporation. The division manufactures and sells an electric switch used in a wide variety of applications. During the coming year, it expects to sell 220,000 units for $8.00 per unit. Helen Martin is the division manager. She is considering producing either 220,000 or 250,000 units during the period. Other information is as follows: eginning inventory pected sales in units elling price per unit ariable manufacturing cost per unit ixed manufacturing cost (total) ixed manufacturing overhead costs per unit. Based on 220,000 units Based on 250,000 units Division Information for 2022 Manufacturing cost per unit Based on 220,000 units Based on 250,000 units Variable selling and administrative expenses 0 220,000 $8.00 $2.10 $550,000 $2.50 per unit ($550,000+220,000) $2.20 per unit ($550,000+ 250,000) $4.60 per unit ($2.10 variable+ $2.50 fixed) $4.30 per unit ($2.10 variable + $2.20 fixed) $0.45 per unit

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter10: Decentralization: Responsibility Accounting, Performance Evaluation, And Transfer Pricing

Section: Chapter Questions

Problem 12E

See similar textbooks

Similar questions

Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The cost of placing an order is 30. The cost of holding one unit of inventory for one year is 15.00. Currently, Ottis places 160 orders of 4,000 plastic housing units per year. Required: 1. Compute the economic order quantity. 2. Compute the ordering, carrying, and total costs for the EOQ. 3. How much money does using the EOQ policy save the company over the policy of purchasing 4,000 plastic housing units per order?
Pietro expects to produce 50,000 units and sell 49,300 units. Beginning inventory of finished goods is 42,500, and ending inventory of finished goods is expected to be 34,000. Required: 1. Prepare a statement of cost of goods sold in good form. 2. What if the beginning inventory of finished goods decreased by 5,000? What would be the effect on the cost of goods sold?
Corazon Manufacturing Company has a purchasing department staffed by five purchasing agents. Each agent is paid 28,000 per year and is able to process 4,000 purchase orders. Last year, 17,800 purchase orders were processed by the five agents. Required: 1. Calculate the activity rate per purchase order. 2. Calculate, in terms of purchase orders, the: a. total activity availability b. unused capacity 3. Calculate the dollar cost of: a. total activity availability b. unused capacity 4. Express total activity availability in terms of activity capacity used and unused capacity. 5. What if one of the purchasing agents agreed to work half time for 14,000? How many purchase orders could be processed by four and a half purchasing agents? What would unused capacity be in purchase orders?
Evans Company had total sales of 3,000,000 for fiscal 20x5. The costs of quality-related activities are given below. Required: 1. Prepare a quality cost report, classifying costs by category and expressing each category as a percentage of sales. What message does the cost report provide? 2. Prepare a bar graph and pie chart that illustrate each categorys contribution to total quality costs. Comment on the significance of the distribution. 3. What if, five years from now, quality costs are 7.5 percent of sales, with control costs being 65 percent of the total quality costs? What would your conclusion be?
Using the information in the previous exercises about Marleys Manufacturing, determine the operating income for department B, assuming department A sold department B 1,000 units during the month and department A reduces the selling price to the market price.
Uchdorf Manufacturing just completed a study of its purchasing activity with the objective of improving its efficiency. The driver for the activity is number of purchase orders. The following data pertain to the activity for the most recent year: Activity supply: five purchasing agents capable of processing 2,400 orders per year (12,000 orders) Purchasing agent cost (salary): 45,600 per year Actual usage: 10,600 orders per year Value-added quantity: 7,000 orders per year Required: 1. Calculate the volume variance and explain its significance. 2. Calculate the unused capacity variance and explain its use. 3. What if the actual usage drops to 9,000 orders? What effect will this have on capacity management? What will be the level of spending reduction if the value-added standard is met?
Katayama Company produces a variety of products. One division makes neoprene wetsuits. The divisions projected income statement for the coming year is as follows: Required: 1. Compute the contribution margin per unit, and calculate the break-even point in units. Repeat, using the contribution margin ratio. 2. The divisional manager has decided to increase the advertising budget by 140,000 and cut the average selling price to 200. These actions will increase sales revenues by 1 million. Will this improve the divisions financial situation? Prepare a new income statement to support your answer. 3. Suppose sales revenues exceed the estimated amount on the income statement by 612,000. Without preparing a new income statement, determine by how much profits are underestimated. 4. How many units must be sold to earn an after-tax profit of 1.254 million? Assume a tax rate of 34 percent. (Round your answer up to the next whole unit.) 5. Compute the margin of safety in dollars based on the given income statement. 6. Compute the operating leverage based on the given income statement. (Round to three significant digits.) If sales revenues are 20 percent greater than expected, what is the percentage increase in profits?
Aldovar Company produces a variety of chemicals. One division makes reagents for laboratories. The divisions projected income statement for the coming year is: Required: 1. Compute the contribution margin per unit, and calculate the break-even point in units. (Note: Round answer to the nearest unit.) Calculate the contribution margin ratio and use it to calculate the break-even sales revenue. (Note: Round contribution margin ratio to four decimal places, and round the break-even sales revenue to the nearest dollar.) 2. The divisional manager has decided to increase the advertising budget by 250,000. This will increase sales revenues by 1 million. By how much will operating income increase or decrease as a result of this action? 3. Suppose sales revenues exceed the estimated amount on the income statement by 1,500,000. Without preparing a new income statement, by how much are profits underestimated? 4. Compute the margin of safety based on the original income statement. 5. Compute the degree of operating leverage based on the original income statement. If sales revenues are 8% greater than expected, what is the percentage increase in operating income? (Note: Round operating leverage to two decimal places.)
A company has prepared the following statistics regarding its production and sales at different capacity levels. Total costs: 1. At what point is break-even reached in sales dollars? In units? (Hint: Use the capacity level to determine the number of units.) 2. If the company is operating at 60% capacity, should it accept an offer from a customer to buy 10,000 units at 3 per unit?
Kerr Manufacturing sells a single product with a selling price of $600 with variable costs per unit of $360. The companys monthly fixed expenses are $72,000. What is the companys break-even point in units? What is the companys break-even point in dollars? Prepare a contribution margin income statement for the month of January when they will sell 500 units. How many units will Kerr need to sell in order to realize a target profit of $120,000? What dollar sales will Kerr need to generate in order to realize a target profit of $120,000? Construct a contribution margin income statement for the month of June that reflects $600,000 in sales revenue for Kerr Manufacturing.