Violins-by-Sarah produces student-grade violins for beginning violin students. The company produced 2,100 violins in its first month of operations. At month-end, 500 finished violinsremained unsold. There was no inventory in work in process. Violins were sold for $115.00 each. Total costs from the month are as follows:(Click on the icon to view the data)The company prepares traditional (absorption costing) income statements for its bankers. Sarah would also like to prepare contribution margin income statements for management useRead the requirements.Compute the following amounts that would be shown on these income statementsRequirement 1. Gross ProfitIdentify the formula, then compute the gross profitData tableDirect materials used..Direct laborPrintDoneGross profit$Variable manufacturing overheadFixed manufacturing overhead.Variable selling and administrative expenses...Fixed selling and administrative expenses$$SS5- X60,20060,00032,00044,1007,00012,700CTC

Gross profit is computed by the business organizations so as to measure the efficiency in employing…

Answered: Violins-by-Sarah produces student-grade…

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 18E

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Pierce Drycleaners has capacity to clean up to 6,000 garments per month. E (Click the icon to view the cost schedule.) Assume that Pierce charges customers $12 per garment for dry cleaning. Prepare Pierce's projected income statement if 4,220 garments are cleaned in March. First, prepare the income statement using the traditional format; then prepare Pierce's contribution margin income statement. Data table swers to the nearest whole dollar. Enter losses with parentheses or a 4,500 Garments 3,000 6,000 Garments Garments Total variable costs $ 2,100 $ 3,150 $ 4,200 Total fixed costs 10,800 10,800 10,800 $ 12,900 $ 13,950 $ 15,000 Total operating costs Variable cost per garment 2$ 0.70 $ 0.70 $ 0.70 3.60 2.40 1.80 Fixed cost per garment $ Average cost per garment 4.30 $ 3.10 $ 2.50 Print Done
How should be the procedure for this questions. Please Scenario: Digital Fingers Glovers bought 378 pairs of gloves at $26 per pair. 220 pairs were sold in the first month, at the regular price of $42 per pair. Another 64 pairs were sold in the second month at a "one-third-off" the regular selling price. The remaining gloves were cleared out in the third month at $16.68. The store's overhead is 17% of cost. 1. What were the total sales? 2. What was the effective rate of markup as a percent of cost? 3. What was the total operating profit or loss on the sale of all of the gloves?
Marwick's Pianos, Inc., purchases pianos from a large manufacturer and sells them at the retail level. The pianos cost, on the average, $2,450 each from the manufacturer. Marwick's Pianos Inc, sells pianos to its customer at an average price of $3,125 each. The selling and administrative costs that the company incurs in a typical month are presented below:Costs Cost FormulaSelling:Advertising $700 per monthSales salaries asnd commissions $950 per month, plus 8% of salesDelivery of pianos to customers $30 per piano soldUtilities $350 per monthDepreciation of sales facilities $800 per monthAdministrative:Executive salaries $2,500 per monthInsurance $400 per monthClerical $1,000 per month, plus $20 per piano soldDepreciation of office equipment $300 per monthDuring August, Marwick's Pianos, Inc., sold and delivered 40 pianos.Required:1. Prepare an income statement for Marwick's Pianos, Inc. for August. Use the traditional format, with costs organized by function.2. Redo (1) above, this…
Bella's Notebook produces a range of diaries and notebooks sold exclusively online through The company website. The customers have the choice of personalising their purchases. The firm currently uses a traditional absorption costing system based on machine hours to allocate manufacturing overheads to products. This year they recorded a loss in their financial statements for the first time since they started trading six years ago. The managing director is very concerned and suggested that the prices of all the products should be increased by 25%. But the management accountant has suggested that the problem relates to overhead allocation and he advised for the adoption of the activity-based costing Activity based cost information obtained for the company shows that customers place individual orders and then discuss the design of the notebooks or diaries using emails. The artwork costs depend on the number of setups required to compile the notebook or diary. In addition, the company has a…
Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $2,450 per unit and then sells them to retail customers for an average price of $3,125 each. The company's selling and administrative costs for a typical month are presented below: Costs Selling: Advertising Sales salaries and commissions Delivery of pianos to customers Utilities Cost Formula $700 per month $950 per month, plus 8% of sales. $30 per piano sold $350 per month $800 per month Depreciation of sales facilities Administrative: Executive salaries Insurance Clerical Depreciation of office equipment During August, Marwick's Pianos, Incorporated, sold and delivered 40 pianos. $2,500 per month $400 per month $1,000 per month, plus $ 20 per piano sold $300 per month Required: 1. Prepare a traditional format income statement for August.
Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,502 per unit and then sells them to retail customers for an average price of $2,400 each. The company's selling and administrative costs for a typical month are presented below: Costs Selling: Advertising Sales salaries and commissions Delivery of pianos to customers Utilities Cost Formula $944 per month $4,810 per month, plus 5% of sales $61 per piano sold $638 per month $4,920 per month Depreciation of sales facilities Administrative: Executive salaries Insurance Clerical Depreciation of office equipment During August, Marwick's Pianos, Incorporated, sold and delivered 64 pianos. $13,534 per month $685 per month $2,492 per month, plus $39 per piano sold $945 per month Required: 1. Prepare a traditional format income statement for August. 2. Prepare a contribution format income statement for August. Show costs and revenues on both a total and a per unit basis down through contribution…
Marwick's Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,503 per unit and then sells them to retail customers for an average price of $2,500 each. The company's selling and administrative costs for a typical month are presented below: Costs Selling: Advertising Sales salaries and commissions Delivery of pianos to customers Utilities Cost Formula $943 per month $4,780 per month, plus 5% of sales $62 per piano sold $638 per month $5,012 per month Depreciation of sales facilities Administrative: Executive salaries $13,474 per month Insurance $688 per month Clerical $2,464 per month, plus $37 per $927 per month Depreciation of office equipment During August, Marwick's Pianos, Incorporated, sold and delivered 61 pianos. Lano sold Required: 1. Prepare a traditional format income statement for August. 2. Prepare a contribution format income statement for August. Show costs and revenues on both a total and a per unit basis down through contribution…
Marwick's Planos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,508 per unit and then sells them to retail customers for an average price of $3,400 each. The company's selling and administrative costs for a typical month are presented below: Costs Selling: Advertising Sales salaries and commissions Delivery of pianos to customers Utilities Depreciation of sales facilities Administrative: Cost Formula $958 per month $4,822 per month, plus 3% of sales $58 per piano sold $643 per month $4,959 per month Executive salaries. Insurance Clerical Depreciation of office equipment During August, Marwick's Pianos, Incorporated, sold and delivered 65 pianos. $13,582 per month $715 per month $2,526 per month, plus $42 per piano sold $892 per month Required: 1. Prepare a traditional format income statement for August 2. Prepare a contribution format income statement for August. Show costs and revenues on both a total and a per unit basis down through contribution…
Tami Tyler opened Tami's Creations, Incorporated, a small manufacturing company, at the beginning of the year. Getting the company through its first quarter of operations placed a considerable strain on Ms. Tyler's personal finances. The following income statement for the first quarter was prepared by a friend who has just completed a course in managerial accounting at State University. Tami's Creations, Incorporated Income Statement For the Quarter Ended March 31 Sales (28,200 units) Variable expenses: Variable cost of goods sold Variable selling and administrative Contribution margin Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative Net operating loss Units produced Units sold $ 490,680 180, 480 Variable costs per unit: Direct materials Direct labor 249,600 219, 240 Variable manufacturing overhead Variable selling and administrative Ms. Tyler is discouraged over the loss shown for the quarter, particularly because she had planned to use the statement as…
Marwick's Pianos, Incorporated, purchases pianos from a manufacturer for an average cost of $1,491 per unit and then sells them to retail customers for an average price of $3,200 each. The company's selling and administrative costs for a typical month are presented below: Costs Selling: Advertising Sales salaries and commissions Delivery of pianos to customers Utilities Cost Formula $960 per month $4,813 per month, plus 4% of sales $57 per piano sold $632 per month $4,934 per month Depreciation of sales facilities Administrative: Executive salaries Insurance Clerical Depreciation of office equipment During August, Marwick's Pianos, Incorporated, sold and delivered 62 pianos. $13,486 per month $712 per month $2,487 per month, plus $37 per piano sold $857 per month Required: 1. Prepare a traditional format income statement for August. 2. Prepare a contribution format income statement for August. Show costs and revenues on both a total and a per-unit basis down through contribution…
Marwick’s Pianos, Incorporated, purchases pianos from a large manufacturer for an average cost of $1,508 per unit and then sells them to retail customers for an average price of $2,800 each. The company’s selling and administrative costs for a typical month are presented below: Costs Cost Formula Selling: Advertising $ 961 per month Sales salaries and commissions $ 4,802 per month, plus 5% of sales Delivery of pianos to customers $ 59 per piano sold Utilities $ 667 per month Depreciation of sales facilities $ 5,049 per month Administrative: Executive salaries $ 13,433 per month Insurance $ 696 per month Clerical $ 2,513 per month, plus $37 per piano sold Depreciation of office equipment $ 877 per month During August, Marwick’s Pianos, Incorporated, sold and delivered 55 pianos. Required: 1. Prepare a traditional format income statement for August.2. Prepare a contribution format income statement for August. Show costs and revenues on both a…
Tami Tyler opened Tami's Creations, Incorporated, a small manufacturing company, at the beginning of the year. Getting the company through its first quarter of operations placed a considerable strain on Ms. Tyler's personal finances. The following income statement for the first quarter was prepared by a friend who has just completed a course in managerial accounting at State University. Sales (28,000 units) Variable expenses: Tami's Creations, Incorporated Income Statement For the Quarter Ended March 31 Variable cost of goods sold Variable selling and administrative Contribution margin Fixed expenses: Fixed manufacturing overhead $ 1,120,000 $ 464,800 179,200 644,000 476,000 es Fixed selling and administrative Net operating loss 248,000 240,000 488,000 $ (12,000) Ms. Tyler is discouraged over the loss shown for the quarter, particularly because she had planned to use the statement as support for a bank loan. Another friend, a CPA, insists that the company should be using absorption…

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