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Problems Section ? Show all work Questions 1 through 7;Problem;1. The following is a list of various costs of producing sweatshirts. Classify each cost as either a variable, fixed, or mixed cost for units produced and sold.;(a);Lubricants used to oil machinery. VARIABLE;(b);Warehouse rent of $6,000 per month plus $.50 per square foot of storage used. MIXED;(c);Thread. VARIABLE;(d);Electricity costs of $.025 per kilowatt-hour. VARIABLE;(e);Janitorial costs of $2,000 per month. FIXED;(f);Advertising costs of $10,000 per month. FIXED;(g);Sales salaries. VARIABLE;(h);Color dyes for producing different colors of sweatshirts. VARIABLE;(i);Salary of the production supervisor. FIXED;(j);Straight-line depreciation on sewing machines. FIXED;(k);Patterns for different designs. Patterns typically last many years before being replaced. FIXED;(l);Hourly wages of sewing machine operators. VARIABLE;(m);Property taxes on factory, building, and equipment. FIXED;(n);Cotton and polyester cloth. VARIABLE;(o);Maintenance costs with sewing machine company. The cost is $2,000 per year plus $.001 for each machine hour of use. MIXED;2. On October 31, the end of the first month of operations, Morristown & Co. prepared the following income statement based on absorption costing;Morristown & Co.;Income Statement;For Month Ended October 31, 20-;Sales (2,600 units);$104,000;Cost of goods sold;Cost of goods manufactured;$85,500;Less ending inventory (400 units);11,400;Cost of goods sold;74,100;Gross profit;$ 29,900;Selling and administrative expenses;21,500;Income from operations;$ 8,400;========;If the fixed manufacturing costs were $42,900 and the variable selling and administrative expenses were $14,600, prepare an income statement in accordance with the variable costing concept.;3. Based on the following production and sales data of Shingle Co. for March of the current year, prepare (a) a sales budget and (b) a production budget.;Product T;Product X;Estimated inventory, March 1;28,000 units;20,000 units;Desired inventory, March 31;32,000 units;15,000 units;Expected sales volume;Area I;320,000 units;260,000 units;Area II;190,000 units;130,000 units;Unit sales price;$6;$14;4. Door & Window Co. was organized on August 1 of the current year. Projected sales for the next three months are as follows;August;$120,000;September;200,000;October;230,000;The company expects to sell 40% of its merchandise for cash. Of the sales on account, 25% are expected to be collected in the month of the sale and the remainder in the following month.;Prepare a schedule indicating total cash collections for August, September, and October.;5. For the current year ending April 30, Hal Company expects fixed costs of $60,000, a unit variable cost of $70, and a unit selling price of $105.;(a);Compute the anticipated break-even sales (units).;(b);Compute the sales (units) required to realize an operating profit of $8,000.;6. The Filling Department of Rose Petal Lotion Company had 2,300 ounces in beginning work in process inventory (70% complete). During the period 46,500 ounces were completed. The ending work in process inventory was 1,800 ounces (25% complete). What are the equivalent units for both direct materials and conversion costs (if materials are added at the beginning of the process)?;7. Give me examples of the following costs for an automobile manufacturer (fill in the appropriate blanks).;Direct Materials;1.;2.;Direct Labor;1.;Factory Overhead;1. Indirect Materials;2. Indirect Labor;3. Other;Period Costs;1.;2.;Question 1;For which of the following businesses would a process cost system be appropriate?;An oil refinery;Custom electronics manufacturer;Yacht builder;Specialty furniture company;Question 2;Department A had 4,000 units in work in process that were 60% completed as to labor and overhead at the beginning of the period, 29,000 units of direct materials were added during the period, 31,000 units were completed during the period, and 2,000 units were 80% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. The first-in, first-out method is used to cost inventories.;The number of equivalent units of production for conversion costs for the period was;33,000;33,800;29,800;30,200;Question 3;Department A had 4,000 units in work in process that were 60% completed as to labor and overhead at the beginning of the period, 29,000 units of direct materials were added during the period, 31,000 units were completed during the period, and 2,000 units were 80% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. The first-in, first-out method is used to cost inventories.;The number of equivalent units of production for material costs for the period was;32,000;33,000;29,800;29,000;Question 4;Which of the following costs is an example of a cost that remains the same in total as the number of units produced changes?;Salary of a factory supervisor;Direct materials;Units of production depreciation on factory equipment;Direct labor;Question 5;Which of the following describes the behavior of the fixed cost per unit?;Decreases with decreasing production;Remains constant with changes in production;Increases with increasing production;Decreases with increasing production;Question 6;If sales are $820,000, variable costs are 58% of sales, and operating income is $260,000, what is the contribution margin ratio?;62%;42%;53.1%;32%;Question 7;If fixed costs are $250,000, the unit selling price is $125, and the unit variable costs are $73, what is the break-even sales (units)?;4,808 units;3,425 units;2,000 units;2,381 units;Question 8;If fixed costs are $1,400,000, the unit selling price is $240, and the unit variable costs are $110, what is the amount of sales required to realize an operating income of $200,000?;12,308 units;10,769 units;12,000 units;1,538 units;Question 9;If fixed costs are $500,000, the unit selling price is $55, and the unit variable costs are $30, what is the break-even sales (units) if fixed costs are increased by $80,000?;25,000 units;23,200 units;10,545 units;19,333 units;Question 10;Which of the following conditions would cause the break-even point to decrease?;Total fixed costs increase;Unit selling price decreases;Unit variable cost decreases;Unit variable cost increases;Question 11;Which of the following conditions would cause the break-even point to increase?;Total fixed costs decrease;Unit selling price increases;Total fixed costs increase;Unit variable cost decreases

 

Paper#79567 | Written in 18-Jul-2015

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