MANAGERIAL ACCT.-WILEYPLUS BLKBRD PKG
7th Edition
ISBN: 9781118869765
Author: Weygandt
Publisher: WILEY
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Textbook Question
Chapter 5, Problem 5.6AP
Kaiser Industries carries no inventories. Its product is manufactured only when a customer's order is received. It is then shipped immediately after it is made. For its fiscal year ended October 31, 2017. Kaisers break-even point was $1.3 million. On sales of $1.2 million, its income statement showed a gross profit of $180,000, direct materials cost of $400,000, and direct labor costs of $500,000. The contribution margin was $180,000, and variable manufacturing
Instructions
(a) Calculate the following:
(1) Variable selling and administrative expenses.
(2) Fixed manufacturing overhead.
(3) Fixed selling and administrative expenses.
(b) Ignoring your answer to part (a), assume that fixed manufacturing overhead was $100,000 and the fixed selling and administrative expenses were $80,000. The marketing vice president feels that if the company increased its advertising, sales could be increased by 25%. What is the maximum increased advertising cost the company can incur and still report the same income as before the advertising expenditure?
(CGA adapted)
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Menlo Company manufactures and sells a single product. The following information has been provided to you:
Profit and loss account for the year ended 31 Dec 2017:
£
£
£
Sales
3,000,000
Production costs:
Direct materials
300,000
Direct labour
1,387,500
Variable overhead
150,000
Fixed overhead
525,000
Total production costs:
2,362,500
Fixed administration overhead
240,000
Selling and distribution costs:
Sales commission (2% of sales)
60,000
Variable distribution costs
127,500
Fixed
advertising costs
90,000
277,500
2,880,000
Profit
120,000…
Menlo Company manufactures and sells a single product. The following information has been provided to you:
Profit and loss account for the year ended 31 Dec 2017:
£
£
£
Sales
3,000,000
Production costs:
Direct materials
300,000
Direct labour
1,387,500
Variable overhead
150,000
Fixed overhead
525,000
Total production costs:
2,362,500
Fixed administration overhead
240,000
Selling and distribution costs:
Sales commission (2% of sales)
60,000
Variable distribution costs
127,500
Fixed
advertising costs
90,000
277,500
2,880,000
Profit
120,000…
Zaria Inc. provides the following cost information for producing 10,000 units of inventory during the current month:
Cost Information
Accounts
Amounts
Direct materials costs
$30,000
Direct labor costs
55,000
Variable manufacturing overhead costs
20,000
Fixed manufacturing overhead costs
25,000
Variable Selling and Administrative expenses
15,000
Fixed Selling and Administrative expenses
10,000
There was no inventory at the beginning of the period. If 1,500 units of inventory remain unsold at the end of the period, compute the costs of goods sold for the month under variable costing.
Group of answer choices
$89,250
$110,500
$15,750
$19,500
Chapter 5 Solutions
MANAGERIAL ACCT.-WILEYPLUS BLKBRD PKG
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