QUESTION TWO Hendry Limited produces a mini-kitchen called Town Cook, which is enjoying extensive popularity amongst young children.
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Hendry Limited produces a mini-kitchen called Town Cook, which is enjoying extensive popularity amongst young children.
The following data is available for the month:
Calculate the unit product cost for the month under marginal costing.
Calculate the unit product cost for the month under absorption costing.
Prepare an income statement for the month using the absorption costing method.
Prepare an income statement for the month using the Marginal costing method.
May i please have the rest of the solution to this question, I thought that by signing up to app i would have been able to answer the questions to this exercise without having to ask for the rest of the solution
by Bartleby Expert- Lakeesha Barnett owns and operates a package mailing store in a college town. Her store, Send It Packing, helps customers wrap items and send them via UPS, FedEx, and the USPS. Send It Packing also rents mailboxes to customers by the month. In May, purchases of materials (stamps, cardboard boxes, tape, Styrofoam peanuts, bubble wrap, etc.) equaled 11,450; the beginning inventory of materials was 1,050, and the ending inventory of materials was 950. Payments for direct labor during the month totaled 25,570. Overhead incurred was 18,130 (including rent, utilities, and insurance, as well as payments of 14,050 to UPS and FedEx for the delivery services sold). Since Send It Packing is a franchise, Lakeesha owes a monthly franchise fee of 5 percent of sales. She spent 2,750 on advertising during the month. Other administrative costs (including accounting and legal services and a trip to Dallas for training) amounted to 3,650 for the month. Revenues for May were 102,100. Required: 1. What was the cost of materials used for packaging and mailing services during May? 2. What was the prime cost for May? 3. What was the conversion cost for May? 4. What was the total cost of services for May? 5. Prepare an income statement for May. 6. Of the overhead incurred, is any of it direct? Indirect? Explain.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)?Sterling Corporation has an EOQ of 5,000 units. The company uses an average of 500 units per day. An order to replenish the part requires a lead time of five days. Required: 1. Calculate the reorder point, using Equation 20.3. 2. Graphically display the reorder point, where the vertical axis is inventory (units) and the horizontal axis is time (days). Show two replenishments, beginning at time zero with the economic order quantity in inventory. 3. What if the average usage per day of the part is 500 units but a daily maximum usage of 575 units is possible? What is the reorder point when this demand uncertainty exists?
- Chassen Company, a cracker and cookie manufacturer, has the following unit costs for the month of June: A total of 100,000 units were manufactured during June, of which 10,000 remain in ending inventory. Chassen uses the first-in, first-out (FIFO) inventory method, and the 10,000 units are the only finished goods inventory at June 30. Under the absorption costing concept, the value of Chassens June 30 finished goods inventory would be: a. 50,000. b. 70,000. c. 85,000. d. 145,000.Read the case study below and answer the questions that follow.Hendry Limited produces a mini-kitchen called Town Cook, which is enjoying extensive popularity amongst young children.The following data is available for the month: Selling price (per unit) R 116Units in opening inventory 600Units manufactured 2 550Units sold 3 050Units in closing inventory 100Variable costs per unit: Direct materials R12,00 Direct labour R50,00 Variable manufacturing overhead R6,50 Variable selling and administrative R10,00 Fixed costs: Fixed manufacturing overhead R81 000 Fixed selling and administrative R19 000 The company produces the same number of units every month, although the sales in units vary from month to month. Thecompany’s variable costs per unit and total fixed costs have been constant from month to month Question = Calculate the unit product cost for the month under marginal costingRead the case study below and answer the questions that follow.Hendry Limited produces a mini-kitchen called Town Cook, which is enjoying extensive popularity amongst young children.The following data is available for the month: Selling price (per unit) R 116Units in opening inventory 600Units manufactured 2 550Units sold 3 050Units in closing inventory 100Variable costs per unit: Direct materials R12,00 Direct labour R50,00 Variable manufacturing overhead R6,50 Variable selling and administrative R10,00 Fixed costs: Fixed manufacturing overhead R81 000 Fixed selling and administrative R19 000 The company produces the same number of units every month, although the sales in units vary from month to month. Thecompany’s variable costs per unit and total fixed costs have been constant from month to month Question = Prepare an income statement for the month using the absorption costing method
- Read the case study below and answer the questions that follow.Hendry Limited produces a mini-kitchen called Town Cook, which is enjoying extensive popularity amongst young children.The following data is available for the month: Selling price (per unit) R 116Units in opening inventory 600Units manufactured 2 550Units sold 3 050Units in closing inventory 100Variable costs per unit: Direct materials R12,00 Direct labour R50,00 Variable manufacturing overhead R6,50 Variable selling and administrative R10,00 Fixed costs: Fixed manufacturing overhead R81 000 Fixed selling and administrative R19 000 The company produces the same number of units every month, although the sales in units vary from month to month. Thecompany’s variable costs per unit and total fixed costs have been constant from month to month Question = Prepare an income statement for the month using the Marginal costing method.Read the case study below and answer the questions that follow.Hendry Limited produces a mini-kitchen called Town Cook, which is enjoying extensive popularity amongst young children.The following data is available for the month: Selling price (per unit) R 116Units in opening inventory 600Units manufactured 2 550Units sold 3 050Units in closing inventory 100Variable costs per unit: Direct materials R12,00 Direct labour R50,00 Variable manufacturing overhead R6,50 Variable selling and administrative R10,00 Fixed costs: Fixed manufacturing overhead R81 000 Fixed selling and administrative R19 000 The company produces the same number of units every month, although the sales in units vary from month to month. Thecompany’s variable costs per unit and total fixed costs have been constant from month to month Question = Calculate the unit product cost for the month under absorption costingXYZ Ltd produce a mini-kitchen called Tiny Tots, which is enjoying extensive popularity amongst young children. The following data is available for the month of March 2018:Selling price (per unit) R 116 Units in opening inventory 600Units manufactured 2 550Units sold 3 050Variable costs per unit:Direct materials R12,00 Direct Labour R50,00Variable manufacturing overhead R6,50Variable selling and administrative R10,00Fixed costs:Fixed manufacturing overhead R81 000Fixed selling and administrative R14 000 The company produces the same number of units every month, although the sales in units vary from month to month. The company’s variable costs per unit and total fixed costs have been constant from month to month.Required:4.1. Prepare an income statement for the month using the variable costing method. (10)4.2. Prepare an income statement for the month using the absorption costing method. (10)
- The Walton Toy Company manufactures four dolls and a sewing kit. It provided the following data for next year: Product Demand Next year (units) Selling Price per Unit Direct Materials Direct Labor Debbie 52,000 $ 17.00 $ 4.50 $ 2.80 Trish 44,000 $ 6.50 $ 1.30 $ 1.40 Sarah 37,000 $ 26.00 $ 6.74 $ 4.90 Mike 40,800 $ 12.00 $ 2.20 $ 3.50 Sewing kit 327,000 $ 8.20 $ 3.40 $ 1.05 The following additional information is available: The company’s plant has a capacity of 114,750 direct labor-hours per year on a single-shift basis. Each employee and piece of equipment are capable of making all five products. Next year’s direct labor pay rate will be $7 per hour. Fixed manufacturing costs total $540,000 per year. Variable overhead costs are $4 per direct labor-hour. All of the company’s nonmanufacturing costs are fixed. The company’s finished goods inventory is negligible and can be ignored. How many direct labor-hours are used to manufacture one unit of each of the company’s…The Walton Toy Company manufactures four dolls and a sewing kit. It provided the following data for next year: Product Demand Next year (units) Selling Price per Unit Direct Materials Direct Labor Debbie 59,000 $ 30.00 $ 5.20 $ 2.10 Trish 51,000 $ 7.00 $ 2.00 $ 0.70 Sarah 44,000 $ 42.00 $ 7.79 $ 4.20 Mike 54,500 $ 12.00 $ 2.90 $ 2.80 Sewing kit 334,000 $ 8.90 $ 4.10 $ 0.35 The following additional information is available: The company’s plant has a capacity of 76,800 direct labor-hours per year on a single-shift basis. Each employee and piece of equipment are capable of making all five products. Next year’s direct labor pay rate will be $7 per hour. Fixed manufacturing costs total $610,000 per year. Variable overhead costs are $4 per direct labor-hour. All of the company’s nonmanufacturing costs are fixed. The company’s finished goods inventory is negligible and can be ignored. Required: How many direct labor-hours are used to manufacture one unit of each of the…Birdfeeders Unlimited makes backyard birdfeeders. The company sells the birdfeeders to home improvement stores. $15 Sales price per birdfeeder 1.5 Board feet of wood required for each birdfeeder $4 Cost per board foot (actual) 10% Desired ending wood inventory stated as a percentage of next month’s production requirements 20% Desired ending finished goods inventory (finished birdfeeders) stated as a percentage of next month’s sales $550,000 Total cost of direct materials purchases in December 45% of direct materials purchases are paid in the month of purchase 55% of direct materials purchases are paid in the month after purchase Prepare the direct materials purchases budget for the first three months of the year, as well as a summary budget for the quarter. Assume the company needs 120,000 board feet of wood for production in April.
