Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
16th Edition
ISBN: 9780134475585
Author: Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 9, Problem 9.43P
Operating income effects of denominator-level choice and disposal of production-volume variance (continuation of 9-42).
- 1. If PLF sells all 300,000 bulbs produced, what would be the effect on operating income of using each type of capacity as a basis for calculating
manufacturing cost per unit?
Required
- 2. Compare the results of operating income at different capacity levels when 225,000 bulbs are sold and when 300,000 bulbs are sold. What conclusion can you draw from the comparison?
- 3. Using the original data (that is, 300,000 units produced and 225,000 units sold) if PLF had used the proration approach to allocate the production-volume variance, what would operating income have been under each level of capacity? (Assume that there is no ending work in process.)
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Blossom Corporation issued 2,000 shares of $10 par value common stock upon conversion of 1,000 shares of $50 par value preferred
stock. The preferred stock was originally issued at $57 per share. The common stock is trading at $28 per share at the time of
conversion.
Record the conversion of the preferred stock. (List all debit entries before credit entries. Credit account titles are automatically indented
when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)
Account Titles and Explanation
Debit
Credit
Blue Corporation issued 1,900 shares of $10 par value common stock upon conversion of 950 shares of $50 par value preferred stock.
The preferred stock was originally issued at $64 per share. The common stock is trading at $26 per share at the time of conversion.
Record the conversion of the preferred stock. (List all debit entries before credit entries. Credit account titles are automatically indented
when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)
Account Titles and Explanation
Debit
Credit
Swifty Corporation has outstanding 1,900 of $1,000 bonds, each convertible into 70 shares of $10 par value common stock. The bonds
are converted on December 31, 2025, when the unamortized discount is $26,100 and the market price of the stock is $21 per share.
Record the conversion using the book value approach. (List all debit entries before credit entries. Credit account titles are automatically
indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the
amounts.)
Account Titles and Explanation
Debit
Credit
Chapter 9 Solutions
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
Ch. 9 - Differences in operating income between variable...Ch. 9 - Why is the term direct costing a misnomer?Ch. 9 - Do companies in either the service sector or the...Ch. 9 - Explain the main conceptual issue under variable...Ch. 9 - Companies that make no variable-cost/fixed-cost...Ch. 9 - The main trouble with variable costing is that it...Ch. 9 - Give an example of how, under absorption costing,...Ch. 9 - What are the factors that affect the breakeven...Ch. 9 - Critics of absorption costing have increasingly...Ch. 9 - What are two ways of reducing the negative aspects...
Ch. 9 - Prob. 9.11QCh. 9 - Describe the downward demand spiral and its...Ch. 9 - Will the financial statements of a company always...Ch. 9 - Prob. 9.14QCh. 9 - The difference between practical capacity and...Ch. 9 - In comparing the absorption and variable cost...Ch. 9 - Queen Sales, Inc. has just completed its first...Ch. 9 - King Tooling has produced and sold the following...Ch. 9 - The following information relates to Drexler Inc.s...Ch. 9 - Prob. 9.20MCQCh. 9 - Variable and absorption costing, explaining...Ch. 9 - Throughput costing (continuation of 9-21). The...Ch. 9 - Variable and absorption costing, explaining...Ch. 9 - Throughput costing (continuation of 9-23). The...Ch. 9 - Variable versus absorption costing. The Tomlinson...Ch. 9 - Absorption and variable costing. (CMA) Miami,...Ch. 9 - Absorption versus variable costing. Horace Company...Ch. 9 - Candyland uses standard costing to produce a...Ch. 9 - Capacity management, denominator-level capacity...Ch. 9 - Denominator-level problem. Thunder Bolt Inc., is a...Ch. 9 - Variable and absorption costing and breakeven...Ch. 9 - Variable costing versus absorption costing. The...Ch. 9 - Throughput Costing (continuation of 9-32) 1....Ch. 9 - Variable costing and absorption costing, the Z-Var...Ch. 9 - Comparison of variable costing and absorption...Ch. 9 - Effects of differing production levels on...Ch. 9 - Alternative denominator-level capacity concepts,...Ch. 9 - Motivational considerations in denominator-level...Ch. 9 - Denominator-level choices, changes in inventory...Ch. 9 - Variable and absorption costing and breakeven...Ch. 9 - Downward demand spiral. Market.com is about to...Ch. 9 - Absorption costing and production-volume...Ch. 9 - Operating income effects of denominator-level...Ch. 9 - Variable and absorption costing, actual costing....Ch. 9 - Prob. 9.45PCh. 9 - Cost allocation, responsibility accounting, ethics...Ch. 9 - Absorption, variable, and throughput costing....Ch. 9 - Costing methods and variances, comprehensive. Rob...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- I'm unsure of how to put this in a general journal and make a statement of reained earnings: Jul 1st The owner is concerned about unlimited liability being a sole proprietorship. Therefore, the company is converting to a corporation. The owner will receive 2,500 shares of $100 par common stock for the original investment. The balance in owner’s capital is $325,000. Jul 3rd Issued 30,000 shares of common stock, $10 par value. Jul 14 Declared a cash dividend of $1.50 per share for the outstanding shares of common stock. (Remember to utilize the correct payable account. Jul 31st Paid out the dividend in cash.arrow_forwardexplain the concept of Employee Stock-Purchase Plans, how do these work?arrow_forwardThe question below includes actual dates that must be used to determine the appropriate tax treatment of the transaction. The following information applies to a calendar year-end C corporation whose net operating loss was generated in the year ending December 31, 2019: Net operating loss (NOL) incurred in 2019 $(80,000) Taxable income in 2018 60,000 Taxable income in 2020 70,000 The corporation's taxable income in 2018 and 2020 is before consideration of any NOL carrybacks or carryforwards. In this situation, the corporation may utilize its 2019 NOL by offsetting: A. $56,000 of the 2020 taxable income and carrying forward $24,000 of the NOL to 2021 and succeeding periods. B. $48,000 of the 2018 taxable income and $12,000 of the 2020 taxable income. C. All of 2018 taxable income and $20,000 of 2020 taxable income. D. All of 2020 taxable income, with no carryforward allowed in succeeding periods.arrow_forward
- The U.S. Tax Court is: A. A specialized trial court that hears only Federal tax cases, and that requires the taxpayer to pay any disputed tax before the case is heard. B. A specialized trial court that hears only Federal tax cases. The trials are by judge and not by a jury. C. An appeals court where taxpayers may appeal decisions of tax cases decided at the District Court level. D. A specialized trial court that hears only Federal tax cases. Tax Court decisions may not be appealed.arrow_forwardI mistakenly submitted blurr image please do not answer!!arrow_forwardA truck was acquired on July 1, 2008, at a cost of $216,000. The truck had a six-year useful life andan estimated salvage value of $24,000. The straight-line method of depreciation was used. On January1, 2011, the truck was repaired at a cost of $20,000, which extended the useful life of the truck for anadditional two years beyond that originally estimated (salvage value is still estimated at $24,000). Incomputing depreciation for annual adjustment purposes, the expense is calculated for each month theasset is owned.Required:Prepare the appropriate entries for January 1, 2011, and December 31, 2011.arrow_forward
- Using the same case, calculate the independent effects of a 2 percent increase in Gross Margin, a 2 percent decrease in the Tax Rate, and a 5 percent decrease in Sales. Colossal Chemical Corporation Year Ended December 31, 2021 ($000,000 omitted) Base Case 2% Increase in Gross Margin 2% Decrease in Tax Rate 5% Decrease in Sales Sales $2,110 $ $ +A Cost of goods sold 1,456 Selling, general, and administrative 274 expense Depreciation 160 Research and 46 development Total costs and $1,936 $ 1A expenses Operating Income 174 Interest expense 39 Earnings before $135 $ $ Income Taxes Provision for Income Taxes Net Income 24 $ 111 $ 6A 6A +A 6Aarrow_forwardSolvearrow_forwardWhat does anti-dilutive mean? How might a security be anti-dilutive with respect to its potential impact on EPS?arrow_forward
- [The following information applies to the questions displayed below.] Delph Company uses job-order costing with a plantwide predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that 50,000 machine-hours would be required for the period’s estimated level of production. It also estimated $910,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $1.80 per machine-hour. Because Delph has two manufacturing departments—Molding and Fabrication—it is considering replacing its plantwide overhead rate with departmental rates that would also be based on machine-hours. The company gathered the following information to enable calculating departmental overhead rates: Molding Fabrication Total Machine-hours 20,000 30,000 50,000 Fixed manufacturing overhead cost $ 700,000 $ 210,000 $ 910,000 Variable manufacturing overhead cost per machine-hour $ 3.00 $ 1.00 During the year, the…arrow_forwardsolve the attached questionsarrow_forwardRespond the attached questionsarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning
What is variance analysis?; Author: Corporate finance institute;https://www.youtube.com/watch?v=SMTa1lZu7Qw;License: Standard YouTube License, CC-BY