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3 years ago

Problem 15-1A Production costs computed and recorded; reports prepared LO C2, P1, P2, P3, P4

Business

1 answer:

Vikentia [17]3 years ago

8 0

Answer:

Job No 306 351,000 Cost Of Goods Sold

Job No 307 500,000 Finished Goods Inventory

Job No 308 256,500 Work In Process Inventory

Explanation:

We add the March balance and the April balances for each of the jobs to get the desired results.

Marcelino Co

Job No 306

March

Direct Materials 25000

Direct Labor 25000

Applied Overhead 12500

Opening Work In Process 62500

April

Direct Materials 131000

Direct Labor 105000

Applied Overhead (50% of 105,000) 52,500

Total Costs Added In April 288500

Total Costs 351,000

Status on April 30 Finished & Sold

Included in Cost Of Goods Sold

Job No 307

March

Direct Materials 40000

Direct Labor 18000

Applied Overhead 9000

Opening Work In Process 67,000

April

Direct Materials 205000

Direct Labor 152000

Applied Overhead (50% of 152,000) 76,000

Total Costs Added In April 433,000

Total Costs 500,000

Status on April 30 Finished & Unsold

Included in Finished Goods Inventory

Job No 308

March

Direct Materials ------

Direct Labor --------

Applied Overhead -------

Opening Work In Process ------

April

Direct Materials 105000

Direct Labor 101000

Applied Overhead (50% of 101,000) 50,500

Total Costs Added In April 256,500

Total Costs 256,500

Status on April 30 In Process

Included in Work In Process Inventory

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3 years ago

Vetox sells industrial chemicals. One of their inputs can be purchased in either jugs or barrels. A jug contains one gallon, whi

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D. They might order a greater number of gallons with jugs or with barrels, depending on various factors like the demand rate, ordering cost, and holding cost.

Explanation:

Let us assume the following things

D be the demand rate

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H be the holding cost per gallon per months

S be the ordering cost

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2 years ago

Belmain Co. expects to maintain the same inventories at the end of 20Y7 as at the beginning of the year. The total of all produc

Pavlova-9 [17]

Answer:

Part a 

Belmain Co.

Estimated Income statement for the year ended 2017.

Sales ($240 x 12,000) $2,880,000

Less Variable Costs :

Direct Materials ($50.00 x 12,000) ($600,000)

Direct Labor ($30.00 x 12,000) ($360,000)

Factory Overheads ($6.00 x 12,000) ($72,000)

Sales Salaries and Commissions ( $4.00 x 12,000) ($48,000)

Miscellaneous selling expenses ( $1.00 x 12,000) ($12,000)

Supplies ($4.00 x 12,000) ($48,000)

Miscellaneous administrative expenses ($1.00 x 12,000) ($12,000)

Contribution $1,728,000

Less Fixed Expenses :

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Sales salaries and commissions ($340,000)

Advertising ($116,000)

Travel ($4,000)

Miscellaneous selling expense ($2,300)

Office and officers’ salaries ($325,000)

Supplies ($6,000)

Miscellaneous administrative expense ($8,700)

Net Income ( Loss) $576,000

Part b

0.6 or 60 %

Part c

Break-even sales (units) = 8,000

Break-even sales (dollars) = $1,920,000

Part d

See attachment

Part e

Margin of safety in dollars = $960,000

Margin of safety in percentage = 33.3 %

Part f

Operating Leverage = 3.00

Explanation:

Income Statement :

Sales - Expenses = Income

Note : I have separated Variable and Fixed Expenses

Contribution Margin ratio :

Contribution Margin ratio = Contribution ÷ Sales

= $1,728,000 ÷ $2,880,000

= 0.6 or 60 %

Break-even sales ( units and dollars) :

Break-even sales (units) = Fixed Costs ÷ Contribution per unit

= $1,152,000 ÷ $144.00

= 8,000

Break-even sales (dollars) = Fixed Costs ÷ Contribution margin ratio

= $1,152,000 ÷ 0.60

= $1,920,000

Margin of safety in dollars and as a percentage of sales :

Margin of safety in dollars = Expected Sales (dollars) - Break-even sales (dollars)

= $2,880,000 - $1,920,000

= $960,000

Margin of safety in % = (Expected Sales - Break-even sales ) ÷ Expected Sales

= $960,000 ÷ $2,880,000

= 33.3 %

Operating leverage

Operating Leverage = Contribution ÷ Earnings Before Interest and Tax

= $1,728,000 ÷ $576,000

= 3.00

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