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dmitriy555 [2]
3 years ago
12

Which of the following will usually be found on an income statement prepared using absorption costing? Contribution Margin/ Gros

s Margin? A) Yes/ Yes B) Yes/ No C) No/ Yes D) No/ No
Business
1 answer:
chubhunter [2.5K]3 years ago
3 0

Answer:

C) No/Yes

Explanation:

An income statement (profit and loss account) is one of the financial statements of a company and shows the company’s revenues and expenses during a particular period. It indicates how the revenues are transformed into the net income or net profit

Absorption cost is a method of calculating the cost of a product or enterprise by taking into account indirect expenses (overheads) as well as direct costs.

How do you calculate total period cost under absorption costing?

Income statement shows Sales – Cost of Goods sold = Gross Margin (or Gross Profit) – Operating Expenses = Net Income and is based on the number of units SOLD.

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Donovan Company incurred the following costs while producing 500 units: Direct Materials, $10 per unit; Direct Labor, $25 per un
Natali5045456 [20]

Answer:

Net operating income= 15,000

Explanation:

The absorption costing method includes all costs related to production, both fixed and variable. The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.

<u>In this case, there is no beginning nor ending inventory. Fixed overhead is incorporated into the cost of goods sold in full.</u>

Sales= 500*100= 50,000

COGS= (10 + 25 + 15)*500 + 10,000= (35,000)

Gross profit= 25,000

Total selling and administrative costs= (5*500) + 7,500= (10,000)

Net operating income= 15,000

8 0
3 years ago
Sosa Diet Supplements had earnings after taxes of $1,170,000 in 20X1 with 347,000 shares of stock outstanding. On January 1, 20X
Sphinxa [80]

Answer:

A. $3.37

B. $3.41

Explanation:

A.Computation for earnings per share for the year 20X1

20X1 Earnings per share= $1,170,000/347,000

20X1 Earnings per share= $3.37

Therefore earnings per share for the year 20X1 will be $3.37

B. Computation for earnings per share for the year 20X2.

First step is to calculate the Earnings available to common stockholders

Earnings available to common stockholders = $1,170,000x (1+.31 )

Earnings available to common stockholders = $1,170,000x 1.31

Earnings available to common stockholders = = $1,532,700

Second step is to calculate the Common shares outstanding

Common shares outstanding = 347,000 + 103,000

Common shares outstanding = 450,000

Now let calculate the earnings per share for the year 20X2

20X2 Earnings per share=$1,532,700/450,000

20X2 Earnings per share = $3.41

Therefore earnings per share for the year 20X2 will be $3.41

8 0
2 years ago
Jasmine Smith owns a condo worth $340,000, a car valued at $27,000, and miscellaneous assets worth $8,500. She owes $189,000 on
Misha Larkins [42]

Answer:

her total assets are $422,000

Explanation:

The computation of the total assets is shown below:

Jasmine Smith's total assets is

= Worth of condo + Value of car + Miscellaneous assets + Mutual fund investment

= $340,000 + $27,000 + $8,500 + $46,500

= $422,000

hence, her total assets are $422,000

We simply applied the above formula so that the correct amount could come

7 0
3 years ago
Leisure Industries manufactures​ custom-designed playground equipment for schools and city parks. Leisure expected to incur $ 62
inn [45]

Answer:

Price= $85263,6

Explanation:

We need to calculate the price paid by the City of Hamptonville for playground equipment.

We know the following information:

Direct material= $13000

Direct labor= 160hours*$22hour= $3520

Manufacturing overhead: it is assigned on labor hours.

We need to calculate the value of manufacturing overhead.

Labor hours presupuested= $41800/$22hour= 1900hours

$/hour of manufacturing overhead= $627000/1900hours= $330

<u>Manufacturing overhead Job 309= 330*160hours= $52800</u>

Manufacturing cost Job 309= direct material + direct labor + Manufacturing overhead= 13000 + 3520 + 52800= $69320

Price=69320*1.23= $85263,6

6 0
3 years ago
Break-even sales and sales to realize operating income For the current year ended March 31, Cosgrove Company expects fixed costs
Anna11 [10]

Answer:

a. 80,000 units

b. 95,000 units

Explanation:

The computation is shown below:

a.The anticipated break-even sales (units) is

As we know that

Break even point in units   = Total fixed cost ÷ Contribution margin per unit

= $27,600,000 ÷  $345    

= 80,000 units

Where,

Contribution margin per unit = Selling price per unit - Variable cost per unit

= $1,150 - $805    

= $345

b. The units for realize operating income is

Unit sales for target profit   = (Fixed expense + Target profit) ÷ Contribution margin per unit

= ($27,600,000 + $5,175,000) ÷ $345    

= $32,775,000 ÷ $345    

= 95,000 units

3 0
3 years ago
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