Variafull Company presented the following data for 2019 and 2020: Cost per unit: Production and Sales (units) Direct materials Direct labor P13.00 10.00 Variable factory overhead.... 2.00 Selling price per unit P45.00 2020 Production 2020 Sales 2019 Production 2019 Sales 14,000 16,000 17,000 14,000 There was no 2019 inventory, beginning. The expected normal production each year is 15,000 units. Total fixed manufacturing overhead each year are P120,000. Fixed selling and administrative expenses are budgeted at P65,000 yearly while variable selling and administrative expenses are expected to be 10% of sales. Required: a. Prepare a detailed income statements for the years ended December 31, 2020 and 2019 under: 1. Direct Costing method 2. Full Costing method b. Reconcile the differences in net income for 2017 and 2016 for both method

Variafull Company presented the following data for 2019 and 2020: Cost per unit: Production and Sales (units) Direct materials Direct labor P13.00 10.00 Variable factory overhead.... 2.00 Selling price per unit P45.00 2020 Production 2020 Sales 2019 Production 2019 Sales 14,000 16,000 17,000 14,000 There was no 2019 inventory, beginning. The expected normal production each year is 15,000 units. Total fixed manufacturing overhead each year are P120,000. Fixed selling and administrative expenses are budgeted at P65,000 yearly while variable selling and administrative expenses are expected to be 10% of sales. Required: a. Prepare a detailed income statements for the years ended December 31, 2020 and 2019 under: 1. Direct Costing method 2. Full Costing method b. Reconcile the differences in net income for 2017 and 2016 for both method

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter10: Cost Analysis For Management Decision Making

Section: Chapter Questions

Problem 3P

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Prepare a cost of goods sold budget for MacLaren Manufacturing Inc. for the year ended December 31, 2016, from the following estimates. Inventories of production units: Direct materials purchased during the year, 548,000; beginning inventory of direct materials, 36,000; and ending inventory of direct materials, 23,000. Totals from other budgets included:
Click the Chart sheet tab. On the screen is a column chart showing ending inventory costs. During a deflationary period, which bar (A, B, or C) represents FIFO costing, which represents LIFO costing, and which represents weighted average? Explain your reasoning. On January 4 following year-end, Rio Enterprises received a shipment of 60 units of product costing 580 each. These units had been ordered by Del in December and had been shipped to him on December 27. They were shipped FOB shipping point. Revise the FIFOLIFO3 worksheet to include this shipment. Preview the printout to make sure that the worksheet will print neatly on one page, and then print the worksheet. Save the completed file as FIFOLIFOT. Using the FIFOLIFO3 file, prepare a 3-D bar (stacked) chart showing the cost of goods sold and ending inventory under each of the four inventory cost flow assumptions. No Chart Data Table is needed. Use the values in the Calculations Section of the worksheet for your chart. Enter your name somewhere on the chart. Save the file again as FIFOLIFO3. Print the chart.
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?
What are the total costs to account for if a companys beginning inventory had $231,432 in materials, $186,450 in conversion costs, and added direct material costs ($4,231,392), direct labor ($2,313,392), and manufacturing overhead ($1,156,696)?
Renfro, Inc. was franchised on January 1, 2016. At the end of its third year of operations, December 31, 2018, management requested a study to determine what effect different materials inventory costing methods would have had on its reported net income over the three-year period. The materials inventory account, using LIFO, FIFO, and weighted average, would have had the following ending balances: a. Assuming the same number of units in ending inventory at the end of each year, were material costs rising or falling from 2016 to 2018? b. Which costing method would show the highest net income for 2017? c. Which method would show the lowest net income for 2018? d. Which method would show the highest net income for the three years combined?
Moore Company uses the LIFO cost flow assumption and carries Product A in inventory on December 31, 2019, at its unit cost of 9.50. Because of a sharp decline in demand for the product, the selling price was reduced to 10.00 per unit. Moores normal profit margin on Product A is 2.00, disposal costs are 1.00 per unit, and the replacement cost is 6.50. Under the lower of cost or market rule, Moores December 31, 2019, inventory of Product A should be valued at a unit cost of: a. 6.50 b. 9.00 c. 7.00 d. 9.50
For 2020, Roberts Ltd., had sales of 150,000 units and production of 210,000 units. Other information for the year included: Direct manufacturing labor $197,500 Variable manufacturing overhead 100,000 Direct materials 160,000 Variable selling expenses 100,000 Fixed administrative expenses 100,000 Fixed manufacturing overhead 250,000 There was no beginning inventory. Required: What is the ending finished goods inventory under absorption costing and variable costing? The company uses actual costing and rounds to the cent (two decimal places) when calculating cost per unit. a. $115, 478, $ 120, 560 b. $176,875, $114,375 c. $202,200, $131, 400 d. $185, 950, $113, 755
For 2019, Kim, Inc., had production of 200,000 units and sales of 160,000 units. Selling price is $6 per unit. Other information for the year included: Direct manufacturing labor $228,000 Variable manufacturing overhead 120,000 Direct materials 180,000 Variable selling expenses 144,000 Fixed administrative expenses 96,000 Fixed manufacturing overhead 216,000 There was no beginning inventory.Compute ending finished goods inventory under variable costing.
The following information is available for Integrity Corporation for 2020: 1) Materials inventory decreased P4,000 during 2020. 2) Materials inventory on December 31, 2020, was 50% of materials inventory on January 1, 2020. 3) Beginning work in process inventory was P140,000. 4) Ending finished goods inventory was P65,000. 5) Purchases of direct materials were P150,000. 6) Direct materials used were 2.5 times the cost of direct labor. 7) Total manufacturing costs incurred were P246,400, 80% of cost of goods manufactured and P150,000 less than cost of goods sold. What is the finished goods inventory on January 1, 2020? d. Compute factory overhead incurred. $fill in the blank 4 e. Compute materials inventory on January 1. $fill in the blank 5 f. Compute materials inventory on December 31. $fill in the blank 6 g. Compute direct materials used. $fill in the blank 7
The following information is available for Integrity Corporation for 2020: 1) Materials inventory decreased P4,000 during 2020. 2) Materials inventory on December 31, 2020, was 50% of materials inventory on January 1, 2020. 3) Beginning work in process inventory was P145,000. 4) Ending finished goods inventory was P65,000. 5) Purchases of direct materials were P154,700. 6) Direct materials used were 2.5 times the cost of direct labor. 7) Total manufacturing costs incurred were P246,400, 80% of cost of goods manufactured and P156,000 less than cost of goods sold. What is the finished goods inventory on January 1, 2020?
The following information is available for Integrity Corporation for 2020: 1) Materials inventory decreased P4,000 during 2020. 2) Materials inventory on December 31, 2020, was 50% of materials inventory on January 1, 2020. 3) Beginning work in process inventory was P140,000. 4) Ending finished goods inventory was P65,000. 5) Purchases of direct materials were P154,700. 6) Direct materials used were 2.5 times the cost of direct labor. 7) Total manufacturing costs incurred were P246,400, 80% of cost of goods manufactured and P156,000 less than cost of goods sold. d. Compute factory overhead incurred.$fill in the blank 4 e. Compute materials inventory on January 1.$fill in the blank 5 f. Compute materials inventory on December 31.$fill in the blank 6 g. Compute direct materials used.$fill in the blank 7
ABC Company uses FIFO costing and applies lower of cost and net realizable to its inventories. At the beginning of year 2020, 5,000 units were on hand with per unit cost of P 10. During 2020, 10,000 (Purchased date: October 15, 2020) and 25,000 (Purchased date: June 15, 2020) units of inventories were purchased at P 12 and P 15, respectively. Also, 35,000 units of inventories were sold at P 20 each. At what amount will the inventory be reported at the end of the year, assuming estimated selling price of the unit and estimated cost to sell are P 22 and P 7 respectively? a. P 110,000 b. P 75,000 c. P 50,000 d. P 60,000