1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Degger [83]
3 years ago
9

The EG Company produces and sells one product. The following data refer to the year just completed: Beginning Inventory 0 units

Units produced........................... 25,000 Units sold...................................... 20,000 Sales price per unit.................... $400 Variable selling and administrative expenses per unit $ 15 Fixed Selling and administrative expenses (Total) $275,000 Manufacturing Costs: Direct materials cost per unit..................................................$ 200 Direct labor cost per unit..........................................................$ 50 Variable manufacturing overhead cost per unit..............$ 30 Fixed manufacturing overhead (Total).................................$300,000 Required: a. What is the unit product cost for the month under variable costing? b. What is the unit product cost for the month under absorption costing? c. Prepare a contribution format income statement for the year using variable costing. d. Prepare an income statement for the year using absorption costing.
Business
1 answer:
Ivahew [28]3 years ago
3 0

Answer:

Part a. What is the unit product cost for the month under variable costing?

Direct Materials                                         200

Direct Labor                                                 50

Variable Manufacturing Overhead             30

Unit product cost                                       280

Therefore Unit Product cost is $280

Part b. What is the unit product cost for the month under absorption costing?

Direct Materials                                                                200

Direct Labor                                                                        50

Variable Manufacturing Overhead                                    30

Fixed Manufacturing Overheads(300,000/25000)          12      

Unit product cost                                                              292

Therefore Unit Product cost is $292

Part  c. Prepare a contribution format income statement for the year using variable costing.

Sales (20,000× $400)                                                                       8,000,000

Less Cost of Sales                                                                           ( 5,600,000)

Opening Stock                                                                                           0

Add Cost of Goods Manufactured (25,000× $280)                        7,000,000

Less Closing Stock (5,000×$280)                                                  ( 1,400,000)

Contribution                                                                                       2,400,000

<u>Less Expenses:</u>

Fixed Manufacturing Costs                                                                  300,000

Variable Selling and Administrative Expenses (20,000×$15)           300,000

Fixed Selling and Administrative Expenses                                        275,000

Net Income                                                                                          1,525,000

Part d. Prepare an income statement for the year using absorption costing.

Sales (20,000× $400)                                                                       8,000,000

Less Cost of Sales                                                                           ( 5,840,000)

Opening Stock                                                                                           0

Add Cost of Goods Manufactured (25,000× $292)                        7,300,000

Less Closing Stock (5,000×$292)                                                  ( 1,460,000)

Gross Profit                                                                                          2,160,000

<u>Less Expenses:</u>

Variable Selling and Administrative Expenses (20,000×$15)           300,000

Fixed Selling and Administrative Expenses                                        275,000

Net Income                                                                                          1,585,000

Explanation:

Part a. What is the unit product cost for the month under variable costing?

Only Variable Manufacturing Costs are included as Product Cost

Part b. What is the unit product cost for the month under absorption costing?

Both Variable Manufacturing Costs and Fixed Manufacturing Costs are included as Product Cost

Part  c. Prepare a contribution format income statement for the year using variable costing.

Fixed Manufacturing Costs and Non-Manufacturing Costs are treated as Period Costs

Part d. Prepare an income statement for the year using absorption costing.

Only Non-Manufacturing Costs are treated as Period Costs

You might be interested in
Modern Federal Bank is setting up a brand-new branch. The cost of the project will be $1.2 million. The branch will create addit
KonstantinChe [14]

Answer:

23.12%

Explanation:

Internal rate of return (IRR) is the rate at which the Net present value (NPV) of a project equals to zero.

Using a financial calculator and the CF function, input the following to find IRR;

Initial investment; CF0 = -1,200,000

Yr1 cashflow inflow ; C01 = 235,000

Yr2 cashflow inflow ; C02 = 412,300

Yr3 cashflow inflow ; C03 = 665,000

Yr4 cashflow inflow ; C04 = 875,000

Then key in IRR CPT = 23.119%

Therefore, the Internal rate of return this expansion is 23.12%

3 0
2 years ago
In 2013, Salvage Yard Inc. had cash flows from investing activities of ($250,000) and cash flows from financing activities of ($
PIT_PIT [208]

Answer:

$415,000

Explanation:

Following is the formula for cash flow:

<em>Ending Cash Balance = CFO + CFI + CFF + Beginning Cash Balance</em>

<em>CFO = Cash flow from operating activities</em>

<em>CFI = Cash flow from investing activities</em>

<em>CFF = Cash flow from financing activities</em>

We can easily rearrange the formula to find CFO

<em>Ending Cash Balance - CFI - CFF - Beginning Cash Balance = CFO </em>

<em>or </em>

<em>CFO = Ending Cash Balance - CFI - CFF - Beginning Cash Balance</em>

<u>Solution</u>

CFO=105000-(-250000)-(-150000)-90000

<em>CFO = $415,000</em>

7 0
2 years ago
Read 2 more answers
An automated assembly robot that cost $400,000 has a depreciable life of 5 years with a $100,000 salvage value. The MACRS deprec
oksian1 [2.3K]

Answer:

Book Value at end of year 6 = $100,000

Explanation:

An Asset is depreciated to salvage value therefore when depreciation is complete the book value equals salvage value or zero.

Salvage value is an estimated value of what the company expects to earn after using the asset maybe when selling off the asset.

6 0
3 years ago
Read 2 more answers
The following events took place at a manufacturing company for the current year:
PilotLPTM [1.2K]

Answer: $25,369.50

Explanation:

GIVEN THE FOLLOWING :

Purchased direct material = $97,000

(2) Incurred labor costs as follows: (a) direct, $58,000 and (b) indirect, $15,600.

(3) Other manufacturing overhead was $109,000, excluding indirect labor.

(4) Transferred 80% of the materials to the manufacturing assembly line.

(5) Completed 65% of the Work-in-Process during the year.

(6) Sold 85% of the completed goods.

(7) There were no beginning inventories.

Ending work in process inventory is calculated by;

(Beginning inventory + 0.8(direct material purchased) + direct Labor + (indirect labor + other manufacturing overhead)) × percentage Work in process

($0 + (0.8×97000) + 58000 + (15600+109000))×0.65

=($0 + $77,600 + $58,000 + 124600)×0.65 = $169,130

Ending WIP Inventory = (100-85)% × $169,130

0.15 × $169,130 = $25,369.50

6 0
3 years ago
Assuming that the standard fixed overhead rate is based on full capacity, the cost of available but unused productive capacity i
ioda

Answer: a.fixed factory overhead volume variance.

Explanation:

Fixed overhead costs are the costs that are incurred by an organization that doesn't change even when the lre is a change in the volume of production activity. The fixed overhead costs are vital in order for the effective operation of the company.

When the standard fixed overhead rate is based on full capacity, the cost of available but unused productive capacity is indicated by the a.fixed factory overhead volume variance.

8 0
3 years ago
Other questions:
  • Jeremy runs a SCUBA diving shop in Cozumel, Mexico. Jeremy has tailored his diving operation to serve serious divers preferring
    12·1 answer
  • Assets = liabilities + owners' equity is the equation for information reported on the
    14·1 answer
  • What is the difference between marginal values and average​ values? A. Marginal values show the total benefit or cost from consu
    9·1 answer
  • The sequence of activities within the firm which begins with research and development, followed by design, and manufacturing, ma
    15·1 answer
  • Which security method involves coding your readable emails into a format that is illegible
    6·1 answer
  • Net income for the year for Carrie, Inc. was $750,000, but the statement of cash flows reports that net cash provided by operati
    6·1 answer
  • The span of control for a manager: a. should never exceed 7 subordinates. b. varies somewhat from manager to manager, but most m
    14·1 answer
  • Blaylock plans to sell 85,000 units of product no. 794 in May, and each of these units requires three units of raw material. Per
    12·1 answer
  • If a preferred stock from Pfizer Inc. (PFE) pays $4.00 in annual dividends, and the required return on the preferred stock is 8.
    14·1 answer
  • Listed below are the transactions that affected the shareholders’ equity of Branch-Rickie Corporation during the period 2018–202
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!