Question 5.1Stark and Company would like to evaluate one of the product lines that they sell to the defensedepartment. Every month the Stark and Company produce an identical number of units, although thesales in units differ from month to month.Selling priceUnits in beginning inventory$105110Units produced6,400Units sold6,100Units in ending inventoryVariable costs per unit:410Direct materials$62Direct labour$48Variable manufacturing overheadVariable selling and administrativeFixed costs:$3$7Fixed manufacturing overheadFixed selling and administrative$64,000$35,600Submission Instructions:1. Under variable costing, identify the unit product cost for the month.2. What is the unit product cost for the month under absorption costing?3. Prepare an income statement for the month using the contribution format and thevariable costing method.4. Prepare an income statement for the month using the absorption costing method.

The contribution margin is computed by subtracting the variable cost from the sale revenue. Single…

Question 5.1 Stark and Company would like to evaluate one of the product lines that they sell to the defense department. Every month the Stark and Company produce an identical number of units, although the sales in units differ from month to month. Selling price Units in beginning inventory Units produced $105 110 6,400 6,100 Units sold Units in ending inventory Variable costs per unit: 410 Direct materials 562 Direct labour $48 Variable manufacturing overhead 53 $7 Variable selling and administrative Fixed costs: S64,000 S35,600 Fixed manufacturing overhead Fixed selling and administrative Submission Instructions: 1 Under variable costing, identify the unit product cost for the month. 2. What is the unit product cost for the month under absorption costing? 3. Prepare an income statement for the month using the contribution format and the variable costing method.

Question 5.1 Stark and Company would like to evaluate one of the product lines that they sell to the defense department. Every month the Stark and Company produce an identical number of units, although the sales in units differ from month to month. Selling price Units in beginning inventory Units produced $105 110 6,400 6,100 Units sold Units in ending inventory Variable costs per unit: 410 Direct materials 562 Direct labour $48 Variable manufacturing overhead 53 $7 Variable selling and administrative Fixed costs: S64,000 S35,600 Fixed manufacturing overhead Fixed selling and administrative Submission Instructions: 1 Under variable costing, identify the unit product cost for the month. 2. What is the unit product cost for the month under absorption costing? 3. Prepare an income statement for the month using the contribution format and the variable costing method.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter2: Basic Managerial Accounting Concepts

Section: Chapter Questions

Problem 4MCQ

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Sterling Corporation has an EOQ of 5,000 units. The company uses an average of 500 units per day. An order to replenish the part requires a lead time of five days. Required: 1. Calculate the reorder point, using Equation 20.3. 2. Graphically display the reorder point, where the vertical axis is inventory (units) and the horizontal axis is time (days). Show two replenishments, beginning at time zero with the economic order quantity in inventory. 3. What if the average usage per day of the part is 500 units but a daily maximum usage of 575 units is possible? What is the reorder point when this demand uncertainty exists?
Pattison Products, Inc., began operations in October and manufactured 40,000 units during the month with the following unit costs: Fixed overhead per unit = 280,000/40,000 units produced = 7. Total fixed factory overhead is 280,000 per month. During October, 38,400 units were sold at a price of 24, and fixed marketing and administrative expenses were 130,500. Required: 1. Calculate the cost of each unit using absorption costing. 2. How many units remain in ending inventory? What is the cost of ending inventory using absorption costing? 3. Prepare an absorption-costing income statement for Pattison Products, Inc., for the month of October. 4. What if November production was 40,000 units, costs were stable, and sales were 41,000 units? What is the cost of ending inventory? What is operating income for November?
Question 1: The Jansen Company manufactures and sells two products: plastic boxes and plastic trays. Estimated needs for a unit of each are- Boxes Trays Cost per unit Material A 2 pounds 1 pound $2.5 per pound Material B 4 pounds 3 pounds $1.5 per pound Direct labor 2 hours 2.5 hours $2 per hour The estimated sales by product for the year 2021 are, 42,000 Boxes and 24,000 Trays. Price per Box is $20 and per Tray is $18. The beginning inventories are expected to be as follows: 4,000 pounds 6,000 pounds 1,000 units 500 units Material A Material B Воxes Trays The desired inventories 5,000 pounds 10,000 pounds 4,000 units 2000 units Material A Material B Boxes Trays Requirements 1. Prepare a revenue budget 2. Production schedule (in units) 3. Purchases of raw materials budget (in units) 4. Purchases of raw materials budget (in $) 5. Direct labor budget in hours 6. Direct labor budget in amount ($) 7. Overhead to be charged to production
Chapter 6: A Closer Look on Cost Accounting The company makes 2,350 units of product X a year, requiring a total os 3.300 machine hours, 250 orders and 200 inspection hours per year. The product's direct material cost is P201.50 and its direct labor cost in P211.11 per unit. The product sells for P590 per unit. According to the activity-based costing system, the gross margin for product X is? 423,087.50 b. 350,435.50 c. 416,890 d. None of the choice a. 56. The following information is available for Mary Corp. Activity Pool Setups Quality Inspections Assembly (direct labor hour) What is the activity rate for setups? Activity Base 50,000 120,000 400,000 Budgeted Amount 300,000 600,000 2,000,000 a. P5.09 c. РО.75 d. P58.00 b. Рб.00 The activity rate for quality inspection is: с. Рб.00 d. P5.09 a. P5.29 b. P5.00
Problem 2 Abner Company has an annual demand of 13,000 urits of Material A. The cost per unit is P14. The order cost is P200 per order, and the annual inventory carrying cost per unit is P5.20. Assume that the units will be required evenly throughout the year. Required: Compute for the following: a. Economic order quantity b. Number of orders in a year. c. Average inventory based on economic order quantity. d. Total carrying cost and total ordering costs at economic order quantity.
Good afternoon Please answer d i,ii Scent Fragrance Company manufactures and sells several ranges of perfumes. The Average revenue and cost of sales are as follows: Selling price per unit $20.00 Variable costs per unit: Direct materials $4.00 Direct manufacturing labor $1.60 Manufacturing overhead $0.40 Selling costs $2.00 Annual fixed costs $96,000 a) Calculate the contribution margin per unit. b) Calculate the number of units Scent Fragrance Company must sell each year to break even. c) Calculate the number of units Scent Fragrance Company must sell to yield a profit of$144,000. d) Managers may use Sensitivity analysis in their accounting system. i) What is sensitivity analysis? ii) How is Sensitivity analysis useful to managers?
Assume a company is considering whether to accept or reject a special order opportunity to sell a customer 300 units of a slightly customized version of one of its products for $37.25. The normal selling price of this product is $48 per unit. It can fulfill the order using existing manufacturing capacity. The company's accounting system estimates the following unit product cost for this product: Per Unit Direct materials $ 18 Direct labor 12 Manufacturing overhead 10 Total cost $ 40 The company estimates that $3 of its manufacturing overhead varies with respect to the number of units produced. The remainder of its overhead is fixed and unaffected by the volume of units produced within the relevant range. Assuming that this decision will have no effect on sales to other customers, what is the financial advantage (disadvantage) of accepting the special order? Multiple Choice $1,275 $600 $1,500 $1,200
Assume a company is considering whether to accept or reject a special order opportunity to sell a customer 300 units of a slightly customized version of one of its products for $37.25. The normal selling price of this product is $48 per unit. It can fulfill the order using existing manufacturing capacity. The company’s accounting system estimates the following unit product cost for this product: Per Unit Direct materials $ 18 Direct labor 12 Manufacturing overhead 10 Total cost $ 40 The company estimates that $3 of its manufacturing overhead varies with respect to the number of units produced. The remainder of its overhead is fixed and unaffected by the volume of units produced within the relevant range. Assuming that this decision will have no effect on sales to other customers, what is the financial advantage (disadvantage) of accepting the special order?
Figure 2 Hapsburg Manufacturing purchases components produced by Little Company in the manufacture of its main product. For the next year, Hapsburg expects to use a total of 20,000 parts. Hapsburg typically orders 2,000 units at a time. The cost of placing an order is GHS100, and the average annual cost of carrying one unit of inventory is GHS5. 18. Refer to Figure 2. Hapsburg's total ordering cost is a. GHS1,000. b. GHS5,000. c. GHS10,000. d. GHS500.
PROBLEM 6 The following information pertains to AAA Manufacturing Company’s Product X: Annual Demand 33,750 units Annual cost to hold one unit of inventory P15 Setup cost (or the cost to initiate a production run P500 Beginning inventory of Product X 0 At present, the company produces 2,250 units of Product X per production run, for a total of 15 production runs per year. The Company is considering to use the EOQ model to determine the economic lot size and the number of production runs that will minimize the total inventory carrying cost and setup cost for Product X. At present, the company’s total annual inventory costs is If the EOQ model is used, the economic lot size is If the EOQ model is used, the number of production runs should be If the EOQ model is used, the total annual inventory costs, compared with that under present system, will increase (decrease)…
PROBLEM 5 Using the EOQ Model, Tokyo Company computed the economic order quantity for one of the materials it uses in its production to be 4,000 units. The Company maintains safety stock of 300 units. The quarterly demand for the material is 10,000 units. The order cost is 200 per order. The purchase price of the material is P4. The annual Inventory carrying cost is equal to 25% of the purchase price. Note: USE AN EOQ MODEL - THE ANSWER OF 1 & 2 SHOULD BE THE SAME 1. What is the annual inventory carrying cost? 2. The total inventory order cost per year is?
Assume the following information for a company that produced 10,000 units and sold 9,000 units during its first year of operations: transcript Selling price Direct materials Direct labor Variable manufacturing overhead Sales commission Fixed manufacturing overhead $ 300,000 Using absorption costing, what is the cost of the company's ending inventory? Multiple Choice $141000 $28,000 $63.000 Per Unit $ 200 $75 $ 50 $8 $8 $133,000 Per Year