Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN: 9781337115773
Author: Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher: Cengage Learning
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Chapter 3, Problem 31BEB
Refer to the data for Pelham Company on the previous page.
Required:
- 1. How many units are in ending inventory?
- 2. Using variable costing, calculate the per-unit product cost.
- 3. What is the value of ending inventory under variable costing?
Use the following information for Brief Exercises 3-30 and 3-31:
During the most recent year, Pelham Company had the following data associated with the product it makes:
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Variable Costing, Absorption Costing
During its first year of operations, Snobegon, Inc. (located in Lake Snobegon, Minnesota), produced 40,900 plastic snow scoops. Snow
scoops are oversized shovel-type scoops that are used to push snow away. Unit sales were 38,900 scoops. Fixed overhead was applied at
$0.75 per unit produced. Fixed overhead was underapplied by $2,900. This fixed overhead variance was closed to Cost of Goods Sold.
There was no variable overhead variance. The results of the year's operations are as follows (on an absorption-costing basis):
Sales (38,900 units @ $20)
$778,000
Less: Cost of goods sold
547,260
Gross margin
$230,740
Less: Selling and administrative expenses (all fixed)
184,500
Operating income
$ 46,240
Required:
1. Calculate the cost of the firm's ending inventory under absorption costing. Round unit cost to five decimal places. Round your final
answer to the nearest dollar.
%24
What is the cost of the ending inventory under variable costing? Round unit…
Compute the Cost of Goods Manufactured and Cost of Goods Sold for West Nautical Company for the most recent year
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Cost of goods manufactured Now calculate the cost of goods sold. West Nautical Company Calculation of Cost of Goods
Sold For Current Year Plus: Less: Data table \table[[, \table[[Beginning], [of Year]], \table[[\table[[End of], [Year]]], [$,27,000
Data table
0
Beginning
of Year
End of
Year
Raw materials inventory.....
25,000 $ 27,000 Insurance on plant
End of
Year
$ 10,000
Work in process inventory.
$
Finished goods inventory...
$
36,000 $
20,000 $
30,000
28,000
Depreciation-plant building and equipment
Repairs and maintenance-plant
... $ 13,100
$ 4,400
Purchases of direct materials ....
78,000 Marketing expenses
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Le
Direct labor..…
Cost of Goods Sold
As an accountant for Lee Company, your supervisor gave you the following calculations of the gross profit for the first quarter:
Â
Alternative
Sales ($50 per unit)
Cost of Goods Sold
Gross Profit
Â
A
$500,000
$200,000
$300,000
B
500,000
228,000
272,000
C
500,000
213,333
286,667
Â
The three alternative cost flow assumptions are FIFO, average, and LIFO (the alternatives are not necessarily presented in this sequence). Lee uses the periodic inventory system. The computation of the cost of goods sold under each alternative is based on the following data:
Â
Â
Units
Cost/Unit
Â
Inventory, January 1
12,000
$20
Purchase, January 10
4,000
21
Purchase, February 15
6,000
22
Purchase, March 10
8,000
23
Â
1. Prepare schedules proving the cost of goods sold shown here under each of the three alternatives. For average cost.Â
LEE COMPANY
Schedules of Cost of Goods Sold
For First Quarter Ended March 31
Â
FIFO
LIFO
Average
Beginning…
Chapter 3 Solutions
Managerial Accounting: The Cornerstone of Business Decision-Making
Ch. 3 - Prob. 1DQCh. 3 - What is a driver? Give an example of a cost and...Ch. 3 - Suppose a company finds that shipping cost is...Ch. 3 - Some firms assign mixed costs to either the fixed...Ch. 3 - Explain the difference between committed and...Ch. 3 - Explain why the concept of relevant range is...Ch. 3 - Why do mixed costs pose a problem when it comes to...Ch. 3 - Describe the cost formula for a strictly fixed...Ch. 3 - Describe the cost formula for a strictly variable...Ch. 3 - What is the scattergraph method, and why is it...
Ch. 3 - Describe how the scattergraph method breaks out...Ch. 3 - What are the advantages of the scattergraph method...Ch. 3 - Prob. 13DQCh. 3 - What is meant by the best-fitting line?Ch. 3 - What is the difference between the unit cost of a...Ch. 3 - Prob. 16DQCh. 3 - (Appendix 3A) Explain the meaning of the...Ch. 3 - A factor that causes or leads to a change in a...Ch. 3 - Which of the following would probably be a...Ch. 3 - Prob. 3MCQCh. 3 - In the cost formula, the term 128,000,000 a. is...Ch. 3 - In the cost formula, the term 12,000 a. is the...Ch. 3 - Prob. 6MCQCh. 3 - Prob. 7MCQCh. 3 - The following cost formula for total purchasing...Ch. 3 - An advantage of the high-low method is that it a....Ch. 3 - Prob. 10MCQCh. 3 - Prob. 11MCQCh. 3 - Prob. 12MCQCh. 3 - The total cost for monthly supervisory cost in a...Ch. 3 - Yates Company shows the following unit costs for...Ch. 3 - (Appendix 3A) In the method of least squares, the...Ch. 3 - Creating and Using a Cost Formula Big Thumbs...Ch. 3 - Using High-Low to Calculate Fixed Cost, Calculate...Ch. 3 - Using High-Low to Calculate Predicted Total...Ch. 3 - Using High-Low to Calculate Predicted Total...Ch. 3 - Using Regression to Calculate Fixed Cost,...Ch. 3 - Inventory Valuation under Absorption Costing Refer...Ch. 3 - Inventory Valuation under Variable Costing Refer...Ch. 3 - Absorption-Costing Income Statement Refer to the...Ch. 3 - Variable-Costing Income Statement Refer to the...Ch. 3 - Creating and Using a Cost Formula Kleenaire Motors...Ch. 3 - Using High-Low to Calculate Fixed Cost, Calculate...Ch. 3 - Using High-Low to Calculate Predicted Total...Ch. 3 - Brief Exercise 3-28 Using High-Low to Calculate...Ch. 3 - Using Regression to Calculate Fixed Cost,...Ch. 3 - Inventory Valuation under Absorption Costing Refer...Ch. 3 - Inventory Valuation under Variable Costing Refer...Ch. 3 - Brief Exercise 3-32 Absorption-Costing Income...Ch. 3 - Brief Exercise 3-33 Variable-Costing Income...Ch. 3 - Variable and Fixed Costs What follows are a number...Ch. 3 - Cost Behavior, Classification Smith Concrete...Ch. 3 - Prob. 36ECh. 3 - Prob. 37ECh. 3 - Prob. 38ECh. 3 - Step Costs, Relevant Range Bellati Inc. produces...Ch. 3 - Matching Cost Behavior Descriptions to Cost...Ch. 3 - Examine the graphs in Exercise 3-40. Required: As...Ch. 3 - Prob. 42ECh. 3 - Prob. 43ECh. 3 - High-Low Method Refer to the information for Luisa...Ch. 3 - Scattergraph Method Refer to the information for...Ch. 3 - Method of Least Squares Refer to the information...Ch. 3 - Use the following information for Exercises 3-47...Ch. 3 - Use the following information for Exercises 3-47...Ch. 3 - Method of Least Squares, Developing and Using the...Ch. 3 - The method of least squares was used to develop a...Ch. 3 - Identifying the Parts of the Cost Formula;...Ch. 3 - Inventory Valuation under Absorption Costing...Ch. 3 - Inventory Valuation under Variable Costing Lane...Ch. 3 - Income Statements under Absorption and Variable...Ch. 3 - (Appendix 3A) Method of Least Squares Using...Ch. 3 - (Appendix 3A) Method of Least Squares Using...Ch. 3 - Identifying Fixed, Variable, Mixed, and Step Costs...Ch. 3 - Identifying Use of the High-Low, Scattergraph, and...Ch. 3 - Identifying Variable Costs, Committed Fixed Costs,...Ch. 3 - Scattergraph, High-Low Method, and Predicting Cost...Ch. 3 - Method of Least Squares, Predicting Cost for...Ch. 3 - Cost Behavior, High-Low Method, Pricing Decision...Ch. 3 - Prob. 63PCh. 3 - Variable and Fixed Costs, Cost Formula, High-Low...Ch. 3 - Cost Separation About 8 years ago, Kicker faced...Ch. 3 - Variable-Costing and Absorption-Costing Income...Ch. 3 - Refer to the information for Farnsworth Company...Ch. 3 - (Appendix 3A) Scattergraph, High-Low Method,...Ch. 3 - (Appendix 3A) Separating Fixed and Variable Costs,...Ch. 3 - (Appendix 3A) Cost Formulas, Single and Multiple...Ch. 3 - Suspicious Acquisition of Data, Ethical Issues...
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