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fomenos
3 years ago
13

High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding

camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant’s operation:
Beginning inventory 0
Units produced 48,000
Units sold 43,000
Selling price per unit $81
Selling and administrative expenses:
Variable per unit $3
Fixed per month $565,000
Manufacturing costs:
Direct materials cost per unit $15
Direct labor cost per unit $9
Variable manufacturing overhead cost per unit $2
Fixed manufacturing overhead cost per month $912,000

Management is anxious to see how profitable the new camp cot will be and has asked that an income statement be prepared for May.
Required:
1. Assume that the company uses absorption costing.
(a) Determine the unit product cost.
(b) Prepare an income statement for May.
2. Assume that the company uses variable costing.
(a) Determine the unit product cost.
(b) Prepare a contribution format income statement for May.
Business
2 answers:
alexandr1967 [171]3 years ago
7 0
The person above me is right
sdas [7]3 years ago
6 0

Answer:

1a) Unit product cost :

Direct material                                                         15

Direct labour                                                                   9

Variable manufacturing overhead                           2

Fixed manufacturing overhead (912,000 / 48000)      19

<u>Total unit product cost</u><u>          =                                      </u><u>45</u>

1b) Income statement :

Sales (43,000 x 81)                                                         3,483,000

Cost of goods sold (43,000 x 45)                                   -1,935,000

Gross profit                                                                          1,848,000

Selling and administrative expense (42000*3+566000)   -692,000

<u>Net income                              =                                             1,156,000 </u>

2a) Unit product cost :

Direct material                                   15

Direct labour                                             8

Variable manufacturing overhead 1.00

<u>Total unit product cost      =       24.00 </u>

2b) Income statement :

Sales (42000*85)                                               3570000

Variable Cost of goods sold (42000*24)      -1008000

Manufacturing margin                                       2562000

Variable selling and administrative expense -126000

Contribution margin                                        2436000

Fixed cost (799000+566000)                        -1365000

<u>Net income                              =                           1071000</u>

Explanation:

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2 years ago
What is the key to making extemporaneous speech sound professional and natural
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6 0
2 years ago
Transactions that affect earnings do not necessarily affect cash. Identify the effect, if any, that each of the following transa
KengaRu [80]

Answer:

Kindly see attached organized table for clarity.

                                                                 Item cash      Net income

a  Purchase of Supplies of cash                 -$133                   -

b  Adjusting entry for use of supplies            -                     -$31

c  Made sales on account                               -                   $1,297

d Received cash from customer on acct   $865                  -

e  Purchased equipment for cash             -$2,528                -

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4 0
3 years ago
John Inc. is a manufacturing business. For a given accounting period, the business’s total revenue amounted to $75,000, while it
maksim [4K]

Answer:

John Inc.'s return on equity for this accounting period is:

B.

26.66 percent

Explanation:

Return or equity is a ratio used to calculate the efficiency of a certain business. It is calculated by dividing the net income on the stockholders' equity. Therefore, in our case, we translate this into 40 000 dollars divided into 150 000. Giving us a  result of .26 %. Thus, the correct option is the B. option.

8 0
3 years ago
Time to reach a financial goal You have $42,180.53 in a brokerage account, and you plan to deposit an additional $5,000 at the e
andrew11 [14]

Answer:

It take to reach your goal is 11 years

Explanation:

given data

initial fixed amount = $42,180.53

deposit additional = $5,000

account totals = $250,000

expect to earn r = 12%

solution

we will apply Future value of annuity that is express as

Future value of annuity = initial fixed amount ×  (1+r)^{t} + deposit additional  × \frac{(1+r)^t-1}{r}     ......................a

put here value and we get

250,000 = 42,180.53  \times (1+0.12)^{t} + 5,000 \times  \frac{(1+0.12)^t-1}{0.12}          

solve it we get

time t = 11

so it take to reach your goal is 11 years

6 0
2 years ago
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