The following information was collected for the first year of manufacturing for Appliance AppsDirect Materials per UnitDirect Labar per UnitVariable Manufacturing Overhead per UnitVariable Selling and Administration ExpensesUnits ProducedUnits SoldSales PriceFixed Manufacturing ExpensesFixed Selling and Administration ExpensesPrepare an income statement under variable costing method.Appliance AppsIncome StatementSalesVariable Cost of Goods SoldGross Contribution MarginVariable Selling and Administration ExpensesContribution MarginFixed Manufacturing ExpensesFixed Selling and Administration ExpensesNet Income$2.50$1.50$0.25$1.7539,00035,000$12Appliance AppsReconciliation$117,000$20,000420,000148,750271,25061,230210,000117,00020,00020,000Prepare a reconciliation to the income under the absorption method.

The fixed costs are deferred or released from the inventory under absorption costing. The absorption…

The following information was collected for the first year of manufacturing for Appliance App Direct Materials per Unit $2.50 Direct Labor per Unit $1.50 Variable Manufacturing Overhead per Unit Variable Selling and Administration Expenses Units Produced Units Sold Sales Price Fixed Manufacturing Expenses Fixed Selling and Administration Expenses Prepare an income statement under variable costing method. Appliance Apps Income Statement Variable Cost of Goods Sold Gross Contribution Margin Variable Selling and Administration Expenses Contribution Margin Fixed Manufacturing Expenses Fixed Selling and Administration Expenses $0.25 $1.75 Appliance Apps Reconciliation 39,000 35,000 $12 $117,000 $20,000 148,750 271,250 61.250 210,000 117,000 20,000 20,000 Prepare a reconciliation to the income under the absorption method.

The following information was collected for the first year of manufacturing for Appliance App Direct Materials per Unit $2.50 Direct Labor per Unit $1.50 Variable Manufacturing Overhead per Unit Variable Selling and Administration Expenses Units Produced Units Sold Sales Price Fixed Manufacturing Expenses Fixed Selling and Administration Expenses Prepare an income statement under variable costing method. Appliance Apps Income Statement Variable Cost of Goods Sold Gross Contribution Margin Variable Selling and Administration Expenses Contribution Margin Fixed Manufacturing Expenses Fixed Selling and Administration Expenses $0.25 $1.75 Appliance Apps Reconciliation 39,000 35,000 $12 $117,000 $20,000 148,750 271,250 61.250 210,000 117,000 20,000 20,000 Prepare a reconciliation to the income under the absorption method.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 2PB: The following product costs are available for Kellee Company on the production of eyeglass frames:...

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Cicleta Manufacturing has four activities: receiving materials, assembly, expediting products, and storing goods. Receiving and assembly are necessary activities; expediting and storing goods are unnecessary. The following data pertain to the four activities for the year ending 20x1 (actual price per unit of the activity driver is assumed to be equal to the standard price): Required: 1. Prepare a cost report for the year ending 20x1 that shows value-added costs, non-value-added costs, and total costs for each activity. 2. Explain why expediting products and storing goods are non-value-added activities. 3. What if receiving cost is a step-fixed cost with each step being 1,500 orders whereas assembly cost is a variable cost? What is the implication for reducing the cost of waste for each activity?
Summarized data for Backdraft Co. for its first year of operations are as follows: A. Prepare an income statement under absorption costing B. Prepare an income statement under variable costing
Absorption-Costing Income Statement Refer to the data for Osterman Company above. Required: 1. Calculate the cost of goods sold under absorption costing. 2. Prepare an income statement using absorption costing. Use the following information for Brief Exercises 3-23 and 3-24: During the most recent year, Osterman Company had the following data:
The following product costs are available for Kellee Company on the production of eyeglass frames: direct materials, $32,125; direct labor, $23.50; manufacturing overhead, applied at 225% of direct labor cost; selling expenses, $22,225; and administrative expenses, $31,125. The direct labor hours worked for the month are 3,200 hours. A. What are the prime costs? B. What are the conversion costs? C. What is the total product cost? D. What is the total period cost? E. If 6.425 equivalent units are produced, what is the equivalent material cost per unit? F. What is the equivalent conversion cost per unit?
Patterson Company produces wafers for integrated circuits. Data for the most recent year are provided: aCalculated using number of dies as the single unit-level driver. bCalculated by multiplying the consumption ratio of each product by the cost of each activity. Required: 1. Using the five most expensive activities, calculate the overhead cost assigned to each product. Assume that the costs of the other activities are assigned in proportion to the cost of the five activities. 2. Calculate the error relative to the fully specified ABC product cost and comment on the outcome. 3. What if activities 1, 2, 5, and 8 each had a cost of 650,000 and the remaining activities had a cost of 50,000? Calculate the cost assigned to Wafer A by a fully specified ABC system and then by an approximately relevant ABC approach. Comment on the implications for the approximately relevant approach.
This information was collected for the first year of manufacturing for Wifi Apps: Prepare an income statement under variable costing and prepare a reconciliation to the income under the absorption method.
Variable-Costing Income Statement Refer to the data for Osterman Company on the previous page. Required: 1. Calculate the cost of goods sold under variable costing. 2. Prepare an income statement using variable costing. Use the following information for Brief Exercises 3-23 and 3-24: During the most recent year, Osterman Company had the following data:
Summarized data for Walrus Co. for its first year of operations are: A. Prepare an income statement under absorption costing B. Prepare an income statement under variable costing
Using the data in P4-2 and Microsoft Excel: 1. Separate the variable and fixed elements. 2. Determine the cost to be charged to the product for the year. 3. Determine the cost to be charged to factory overhead for the year. 4. Determine the plotted data points using Chart Wizard. 5. Determine R2. 6. How do these solutions compare to the solutions in P4-2 and P4-3? 7. What does R2 tell you about this cost model?
For E2-17, prepare any journal entries that would have been different if the only trigger points had been the purchase of materials and the sale of finished goods. Davis Co. uses backflush costing to account for its manufacturing costs. The trigger points are the purchase of materials, the completion of goods, and the sale of goods. Prepare journal entries to account for the following: a. Purchased raw materials, on account, 70,000. b. Requisitioned raw materials to production, 70,000. c. Distributed direct labor costs, 15,000. d. Factory overhead costs incurred, 45,000. (Use Various Credits for the account in the credit part of the entry.) e. Completed all of the production started. f. Sold the completed production for 195,000, on account. (Hint: Use a single account for raw materials and work in process.)
Davis Co. uses backflush costing to account for its manufacturing costs. The trigger points are the purchase of materials, the completion of goods, and the sale of goods. Prepare journal entries to account for the following: a. Purchased raw materials, on account, 70,000. b. Requisitioned raw materials to production, 70,000. c. Distributed direct labor costs, 15,000. d. Factory overhead costs incurred, 45,000. (Use Various Credits for the account in the credit part of the entry.) e. Completed all of the production started. f. Sold the completed production for 195,000, on account. (Hint: Use a single account for raw materials and work in process.)
Method of Least Squares, Predicting Cost for Different Time Periods from the One Used to Develop a Cost Formula Refer to the information for Farnsworth Company on the previous page. However, assume that Tracy has used the method of least squares on the receiving data and has gotten the following results: Required: 1. Using the results from the method of least squares, prepare a cost formula for the receiving activity. 2. Using the formula from Requirement 1, what is the predicted cost of receiving for a month in which 1,450 receiving orders are processed? (Note: Round your answer to the nearest dollar.) 3. Prepare a cost formula for the receiving activity for a quarter. Based on this formula, what is the predicted cost of receiving for a quarter in which 4,650 receiving orders are anticipated? Prepare a cost formula for the receiving activity for a year. Based on this formula, what is the predicted cost of receiving for a year in which 18,000 receiving orders are anticipated?