Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN: 9781337115773
Author: Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher: Cengage Learning
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Textbook Question
Chapter 2, Problem 18MCQ
2-18 Use the following information for Multiple- Choice Questions 2-13 through 2-18:
Last year, Barnard Company incurred the following costs:
Barnard produced and sold 10,000 units at a price of $31 each.
Refer to the information for Barnard Company on the previous page. Operating income is
- a. $34,000.
- b. $110,000.
- c. $234,000.
- d. $270,000.
- e. $74,000.
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Q1) A company has the following accounts’ balances at the end of the year:
Building (Net) 20 year life left $ 4,000,000. The replacement cost for the Building is 4,500,000 USD.
Inventory 40,000 unit at $20 each with a replacement cost $22. And cost of goods sold of $500,000 with a replacement cost of 520,000.
Required:
Indicate how the above information would affect the financial statements of the company when adopting the current cost accounting model. You need to determine the realized and unrealized profit.
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Fancy Company reported a contribution margin of $10 per unit. The company’s fixed costs per period were $30,000. Sales were $48,000 for the 3,200 units sold during the period. The income tax rate is 25%.
Required:a. What is current net income?b. What is the breakeven point (BEP) in units?c. If the income tax rate is increased to 30%, what is the BEP in dollars?d. If the number of units sold decreases to 3,100 units, what is the BEP in dollars?e. If the sales price is increased by $2, what is the BEP in units? Assume the variable costs, which consist of direct materials, direct labor, and variable overhead, are not changing as a result of increasing the sales price.
2. A boat manufacturer produces 30 boats this year and incurred $3.6 million in material, labor, and overhead costs. 19 boats were sold during the year, and each boat was allocated the same amount of costs.Â
a. How much of the $3.6 million of total manufacturing costs should appear on the Company's income statement as Costs of Goods Sold?
b. Assuming Finished Goods Inventory consisted of only the unsold boats produced this year then what is the $ amount of Finished Goods Inventory?
(Show all calculations)
Chapter 2 Solutions
Managerial Accounting: The Cornerstone of Business Decision-Making
Ch. 2 - Explain the difference between cost and expense.Ch. 2 - What is the difference between accumulating costs...Ch. 2 - What is a cost object? Give some examples.Ch. 2 - What is a direct cost? An indirect cost? Can the...Ch. 2 - What is allocation?Ch. 2 - What is the difference between a product and a...Ch. 2 - Define manufacturing overhead.Ch. 2 - Explain the difference between direct materials...Ch. 2 - Define prime cost and conversion cost. Why cant...Ch. 2 - How does a period cost differ from a product cost?
Ch. 2 - Define selling cost. Give five examples of selling...Ch. 2 - What is the cost of goods manufactured?Ch. 2 - What is the difference between cost of goods...Ch. 2 - What is the difference between the income...Ch. 2 - Why do firms like to calculate a percentage column...Ch. 2 - Accumulating costs means that a. costs must be...Ch. 2 - Product (or manufacturing) costs consist of a....Ch. 2 - Use the following information for Multiple-Choice...Ch. 2 - Prob. 4MCQCh. 2 - The accountant in a factory that produces biscuits...Ch. 2 - Which of the following is an indirect cost? a. The...Ch. 2 - Prob. 7MCQCh. 2 - Kelloggs makes a variety of breakfast cereals....Ch. 2 - Prob. 9MCQCh. 2 - Stone Inc. is a company that purchases goods...Ch. 2 - JackMan Company produces die-cast metal bulldozers...Ch. 2 - Prob. 12MCQCh. 2 - Use the following information for Multiple-Choice...Ch. 2 - Use the following information for Multiple-Choice...Ch. 2 - Use the following information for Multiple- Choice...Ch. 2 - Prob. 16MCQCh. 2 - Use the following information for Multiple-Choice...Ch. 2 - 2-18 Use the following information for Multiple-...Ch. 2 - Use the following information for Brief Exercises...Ch. 2 - Use the following information for Brief Exercises...Ch. 2 - Direct Materials Used in Production Slapshot...Ch. 2 - Cost of Goods Manufactured Slapshot Company makes...Ch. 2 - Cost of Goods Sold Slapshot Company makes ice...Ch. 2 - Use the following information for Brief Exercises...Ch. 2 - Use the following information for Brief Exercises...Ch. 2 - Prob. 26BEACh. 2 - Prob. 27BEBCh. 2 - Prob. 28BEBCh. 2 - Direct Materials Used in Production Morning Smiles...Ch. 2 - 2-30 Cost of Goods Manufactured Morning Smiles...Ch. 2 - Cost of Goods Sold Morning Smiles Coffee Company...Ch. 2 - Use the following information for Brief Exercises...Ch. 2 - Use the following information for Brief Exercise:...Ch. 2 - Service Organization Income Statement Healing...Ch. 2 - Prob. 35ECh. 2 - Products versus Services, Cost Assignment Holmes...Ch. 2 - Assigning Costs to a Cost Object, Direct and...Ch. 2 - Total and Unit Product Cost Martinez Manufacturing...Ch. 2 - Cost Classification Loring Company incurred the...Ch. 2 - Classifying Cost of Production A factory...Ch. 2 - Use the following information for Exercises 2-41...Ch. 2 - Use the following information for Exercises 2-41...Ch. 2 - Direct Materials Used Hannah Banana Bakers makes...Ch. 2 - Cost of Goods Sold Allyson Ashley makes jet skis....Ch. 2 - Use the following information for Exercises 2-45...Ch. 2 - Use the following information for Exercises 2-45...Ch. 2 - Use the following information for Exercises 2-47...Ch. 2 - Use the following information for Exercises 2-47...Ch. 2 - Use the following information for Exercises 2-47...Ch. 2 - Understanding the Relationship between Cost Flows,...Ch. 2 - Manufacturing, Cost Classification, Product Costs...Ch. 2 - Cost Assignment, Direct Costs Harry Whipple, owner...Ch. 2 - Cost of Direct Materials, Cost of Goods...Ch. 2 - Preparation of Income Statement: Manufacturing...Ch. 2 - Cost of Goods Manufactured, Cost of Goods Sold...Ch. 2 - Cost Identification Following is a list of cost...Ch. 2 - Income Statement, Cost of Services Provided,...Ch. 2 - Cost of Goods Manufactured, Income Statement W. W....Ch. 2 - Cost Definitions Luisa Giovanni is a student at...Ch. 2 - Cost Identification and Analysis, Cost Assignment,...Ch. 2 - Cost Analysis, Income Statement Five to six times...Ch. 2 - Cost Classification, Income Statement Gateway...Ch. 2 - Cost Information and Ethical Behavior, Service...
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