Cool Sky reports the following for its first year of operations. The company produced 46,000 units and sold 38,000 units at a price of $140 per unit. Direct materials Direct labor Variable overhead Fixed overhead Variable selling and administrative expenses Fixed selling and administrative expenses $ 60 per unit $ 22 per unit $ 8 per unit $ 552,000 per year $ 12 per unit $ 100,000 per year Exercise 6-3 (Algo) Part 2a 2a. Assume the company uses variable costing. Determine its total product cost per unit. Per unit product cost using: Total product cost per unit Variable costing [The following information applies to the questions displayed below.] Cool Sky reports the following for its first year of operations. The company produced 46,000 units and sold 38,000 units at a price of $140 per unit. Direct materials Direct labor Variable overhead Fixed overhead Variable selling and administrative expenses Fixed selling and administrative expenses $ 60 per unit $ 22 per unit $ 8 per unit $ 552,000 per year $12 per unit $ 100,000 per year Exercise 6-3 (Algo) Part 2b 2b. Assume the company uses variable costing. Prepare its income statement for the year under variable costing. Income Statement (Variable Costing) Income

Cool Sky reports the following for its first year of operations. The company produced 46,000 units and sold 38,000 units at a price of $140 per unit. Direct materials Direct labor Variable overhead Fixed overhead Variable selling and administrative expenses Fixed selling and administrative expenses $ 60 per unit $ 22 per unit $ 8 per unit $ 552,000 per year $ 12 per unit $ 100,000 per year Exercise 6-3 (Algo) Part 2a 2a. Assume the company uses variable costing. Determine its total product cost per unit. Per unit product cost using: Total product cost per unit Variable costing [The following information applies to the questions displayed below.] Cool Sky reports the following for its first year of operations. The company produced 46,000 units and sold 38,000 units at a price of $140 per unit. Direct materials Direct labor Variable overhead Fixed overhead Variable selling and administrative expenses Fixed selling and administrative expenses $ 60 per unit $ 22 per unit $ 8 per unit $ 552,000 per year $12 per unit $ 100,000 per year Exercise 6-3 (Algo) Part 2b 2b. Assume the company uses variable costing. Prepare its income statement for the year under variable costing. Income Statement (Variable Costing) Income

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter9: Standard Costing: A Functional-based Control Approach

Section: Chapter Questions

Problem 30P: Algers Company produces dry fertilizer. At the beginning of the year, Algers had the following...

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Ellerson Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 278,000, direct labor cost was 189,000, and overhead cost was 523,000. During the year, 100,000 units were completed. Required: 1. Calculate the total cost of direct materials used in production. 2. Calculate the cost of goods manufactured. Calculate the unit manufacturing cost. 3. Of the unit manufacturing cost calculated in Requirement 2, 2.70 is direct materials and 5.30 is overhead. What is the prime cost per unit? Conversion cost per unit?
Algers Company produces dry fertilizer. At the beginning of the year, Algers had the following standard cost sheet: Algers computes its overhead rates using practical volume, which is 54,000 units. The actual results for the year are as follows: a. Units produced: 53,000 b. Direct materials purchased: 274,000 pounds at 2.50 per pound c. Direct materials used: 270,300 pounds d. Direct labor: 40,100 hours at 17.95 per hour e. Fixed overhead: 161,700 f. Variable overhead: 122,000 Required: 1. Compute price and usage variances for direct materials. 2. Compute the direct labor rate and labor efficiency variances. 3. Compute the fixed overhead spending and volume variances. Interpret the volume variance. 4. Compute the variable overhead spending and efficiency variances. 5. Prepare journal entries for the following: a. The purchase of direct materials b. The issuance of direct materials to production (Work in Process) c. The addition of direct labor to Work in Process d. The addition of overhead to Work in Process e. The incurrence of actual overhead costs f. Closing out of variances to Cost of Goods Sold
Steeler Towel Company estimates its overhead to be $250,000. It expects to have 100,000 direct labor hours costing $2,500,000 in labor and utilizing 12,500 machine hours. Calculate the predetermined overhead rate using: A. Direct labor hours B. Direct labor dollars C. Machine hours
The Homer Corporation produces two products, and reports the following production and cost information for the most recent accounting period. Product A Product B Number of units produced 20,000 units 4,000 units Direct labor @ $20 per direct labor hour (DLH) 0.50 DLH per unit 2.00 DLH per unit Direct materials cost $ 4 per unit $ 35 per unit Overhead costs: Total Cost ActivityDriver Product A Product B Machine setup $ 2,000.00 setups 6 setups 14 setups Quality inspections 31,000.00 inspections 80 inspections 120 inspections Total $ 33,000.00 Using activity-based costing to assign overhead costs, the activity rate for machine setups is:
17 Belsky Corporation has provided the following data from its activity-based costing system: Activity Cost Pools Assembly Estimated Overhead Cost $ 999,600 Processing orders Inspection $ 101,300 $ 138,700 Expected Activity 68,000 machine-hours 2,000 orders 1,900 inspection-hours The company makes 450 units of product Q19S a year, requiring a total of 710 machine-hours, 42 orders, and 12 inspection-hours per year. The product direct materials cost is $36.31 per unit and its direct labor cost is $30.05 per unit. According to the activity-based costing system, the unit product cost of product Q19S is closest to: (Round your intermediate calculations to 2 decimal places.) Multiple Choice $96.23 per unit О $66.36 per unit $87.70 per unit
Assume the following information for a company that produced 10,000 units and sold 9,000 units during its first year ofoperations: Selling priceDirect materials Direct laborVariable manufacturing overhead $ 10Sales commission Fixed manufacturing overhead Per Unit Per Year$ 200$77$ 50$ 8$300,000 Using variable costing, what is the company's net operating income? $195,000 $275,000 $185,000 $175,000
Requifé Heidelberg Fabrication manufactures two products, G-09 and G-35: Units produced Direct materials cost per unit Machine-hours per unit Production runs per quarter G-09 19,400 Machine depreciation Setup labor Materials handling Total $7 4 144 6-35 3,880 $19 Production at the plant is automated and any labor cost is included in overhead. Data on manufacturing overhead at the plant follow $ 104,760 52,380 41,904 $ 199,044 7 72 Required: a. Compute the unit costs for the two products, G-09 and G-35, using the current costing system at Heidelberg (using machine-hours as the allocation basis) b. Compute the unit costs for the two products, G-09 and G-35, using the proposed ABC system at Heidelberg. Note: For all requirements, do not round intermediate calculations. Round your answers to 2 decimal places.
Betty Company Ltd manufactures two products, XO and X1. Estimates for the company’s products for next year are provided below: XO X1 Estimated production volume 4 000 3 000 Direct material cost $70 / unit $95 / unit Direct labour per unit 2 hours @ $25 / hour 3 hours @ $25 / hour Betty’s estimated overhead of $1 600 000 can be identified with three major activities: order processing ($260 000), machine processing ($1 040 000) and product inspection ($300 000). These activities are driven by number of orders processed, machine hours, and inspection hours respectively. Estimated activity levels for the next year are as follows: XO X1 Total Orders processed 400 600 1000 Machine hours 38 000 42 000 80 000 Inspection hours 8 000 16 000 24 000 Required: Assuming that Betty Company Ltd uses activity-based costing to apply overhead to production, calculate the unit manufacturing costs of the XO and X1…
7. At the beginning of the year, a company estimates total direct materials costs of $1,940,000 and total overhead costs of $2,793,600. If the company uses direct materials costs as its activity base to apply overhead, what is the predetermined overhead rate it should use during the year? a. 100% b. 144% c. 69% d. 44% e. 31%
Required information Use the following information for the Exercise below. (Algo) [The following information applies to the questions displayed below.] Barnes Company reports the following for its product for its first year of operations. Direct materials Direct labor Variable overhead Fixed overhead Variable selling and administrative expenses Fixed selling and administrative expenses $ 36 per unit $ 26 per unit $12 per unit $ 70,000 per year $3 per unit $ 28,000 per year Exercise 6-5 (Algo) Computing gross profit at different production levels LO P2 The company sells its product for $140 per unit. Compute gross profit using absorption costing assuming the company (a) produces and sells 2,800 units and (b) produces 3,500 units and sells 2,800 units. (a) 2,800 Units Produced Gross profit using absorption costing and 2,800 Units Sold Sales Cost of goods sold Gross profit (b) 3,500 Units Produced and 2,800 Units Sold
ABC LTD produces a single product which undergoes three processes. Thefollowing details relate to one period:ProcessI II III$ $ $Raw Materials (60,000 units) 80,000Materials Introduced 23,500 18,750 22,100Direct Wages 15,600 12,000 13,400Overheads allotted to Processes 3,800 4,600 3,200Other overheads total $27,000Units Units UnitsOutput in units 55,200 53,800 49,600A normal loss of 5% of the input to each process is anticipated.Units lost have the following scrap values:After process I NilAfter process II $1After process III $1.80There was no opening or closing WIP.Prepare ledger accounts for the period.
Assume the following information for a company that produced 10,000 units and sold 8,000 units during its first year of operations and produced 8,000 units and sold 10,000 units during its second year of operations: Selling price Direct materials Direct labor Per Unit Per Year $ 200 $ 76 $ 50 Variable manufacturing overhead Sales commission Fixed manufacturing overhead Using absorption costing, what is the unit product cost for units produced during the second year of operations? $9 $8 $ 300,000