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
IRISSAK [1]
3 years ago
11

Variable and absorption costing and breakeven points. Camino, a leading firm in the sports industry, produces basketballs for th

e consumer market. For the year ended December 31, 2017, Camino sold 400,000 basketballs at an average selling price of $12 per unit. The following information also relates to 2017 (assume constant unit costs and no variances of any kind):
Inventory, January 1, 2017: 0 basketballs
Inventory, December 31, 2017: 20,000 basketballs
Fixed manufacturing costs: $380,000
Fixed administrative costs: $660,000
Direct materials costs: $ 3 per basketball
Direct labor costs: $ 4 per basketball

1. Prepare income statements under (a) variable, (b) absorption, and (c) throughput costing for the year endedDecember 31,2017.
2. Calculate the breakeven point (in basketballs sold) in 2017 under:
a. Variable costing
b. Absorption costing
c. Throughput costing
3. Suppose direct materials costs were $4 per basketball instead. Assuming all other data are the same, calculate the minimum number of basketballs Camino must have sold in 2017 to attain a target operating income of $120,000 under:
a. Variable costing
b. Absorption costing
c. Throughput costing
Business
1 answer:
Vlad1618 [11]3 years ago
3 0

Answer:

1       VARIABLE COSTING ABSORPTTION THROUGHPUT

sales    4800000                      4800000              4800000

opening stock 0                                      0                       0

produced    2940000                       3320000                1260000

closing     140000                      158095.24          60000

cost of sales     2800000                    3161904.762         1200000

contribution     2000000                    1638095.238        3600000

direct labour                                                           1680000

fixed cost    

admin        660000                         660000           660000

manufacturing      380000                                                  380000

net income  960000                   978095.2381          880000

2.            variable                        absorption       throughput

breakeven  $218,487                  $160,976       121353.5589

3. units to be sold 145000                        87640.44944            332000

Explanation:

UNIT COST  7                                     7.90                      3

material          3                                       3                         3

labor          4                                         4  

fixed cost                                        0.90  

   

   

produced units    

opening           0                                          0                          0

produced  420000                           420000             420000

closing          20000                            20000                      20000

sold                  400000                            400000              400000

breakeven = fixed cost / contribution per unit

3.  change in unit cost  

                   variable   absorption throughput

material            4                4              4

labour                 4                 4  

fixed cost                         0.9  

unit cost                8                8.9               4

sales    

opening stock    

produced    

closing    

cost of sales    

contribution  1160000    780000     1328000

direct labour                                 168000

fixed cost    

admin          660000         660000       660000

manufacturing                  380000  380000

net income  120000          120000         120000

to get the amounts for the closing stock, opening stock, produced and sold we multiply by unit cost

to get produced units we take sold stock plus closing stock less openning stock

to get the units that must be sold to make net income of 120 000

we do bottom up approach and can stop at contribution then divide it by contribution per unit.

You might be interested in
A company reports the following:
fredd [130]

Answer:

a. 15 times

b. 24.3 days

Explanation:

The computation is shown below:

a. Accounts receivable turnover

Account receivable turnover ratio = Net credit sales ÷ Average accounts receivable  

= $3,150,000 ÷ $210,000

= 15 times

b. Number of days sales in receivables = Total number of days in a year ÷ accounts receivable turnover ratio

= 365 days ÷ 15 times

= 24.3 days

7 0
3 years ago
Tammy's take-home pay is $800 a month. 7% of her take-home pay is spent on her cell phone bill. how much is tammy's monthly cell
ioda
Pretty sure its $56. Hope that helps
3 0
3 years ago
Read 2 more answers
Momentous Occasions is a photography business that shoots videos at college parties. The freshman class pays​ $1,000 in advance
Viefleur [7K]

Answer:

a. Considering the $1,000 paid by the freshman class,

Revenue earned on April 2

Did the earnings occur on the same date the cash was received No

b. Considering the $4,100 paid by the sophomore class,

Revenue earned on April 2

Did the earnings occur on the same date the cash was received No

Explanation:

a. Considering the $1,000 paid by the freshman class, on what date was revenue earned? Did the earnings occur on the same date the cash was received?

Revenue According to IFRS 15 is earned when earnings occur on the same date the cash was received when Momentous Occasions (the entity) transferres goods or services to the customer ( freshman class)

Thus $1,000 paid by the freshman class on March 3 is a Deferred Revenue. Earnings did not occur on the same date the cash was received.

Revenue occured when  Momentous Occasions (the entity) transferred goods or services to freashman class on April 2

b. Considering the $4,100 paid by the sophomore class, on what date was the revenue earned? Did the earnings occur on the same date cash received?

Revenue According to IFRS 15 is earned when earnings occur on the same date the cash was received when Momentous Occasions (the entity) transferres goods or services to the customer ( freshman class)

Revenue occured when  Momentous Occasions (the entity) transferred goods or services to freashman class on April 2

The $4,100 paid by the sophomore class on February 28 is payment for services rendered by  Momentous Occasions on  party held on April 2.

Thus Earnings did not occur on the same date the cash was received.

5 0
3 years ago
Pablo management has ten part-time employees, each of whom earns $145 per day. they are normally paid on fridays for work comple
kvv77 [185]

Explanation:

December 31, 2016: To record accrued wages for one day (10 workers × $145) = $1,450.

January 4, 2017: To record accrued and current wages.

Wages expense = 10 workers × 3 days × $145 = $4,350

Cash = 10 workers × 4 days × $145 = $5,800.

See attached photo.

4 0
3 years ago
In the "Input Analysis" section of the spreadsheet model, calculate the correlations between the sales of each type of product a
rodikova [14]

Answer:

The correct formula will be :

=average(past event tab then col in that tab) use this for att, programs, food, and merch

=AVERAGE('Past Events'!C4:C103)

Explanation:

To calculate the correlation between the sales of each kind of product and event attendance, from the Input analysis part of the spreadsheet model.

According to the information provided, in the targeted cell, we will use formula

=Average(data cells)

and for other part of the question is to calculate sales. For this part we can simply use the sum formula, first, we will sum the sales for a single item in past events column than at the end of the past column.

Thus, the correct formula will be :

=average(past event tab then col in that tab) use this for att, programs, food, and merch

=AVERAGE('Past Events'!C4:C103)

7 0
3 years ago
Other questions:
  • A company manufactures mountain bikes. The research department produced the marginal cost function C'(x)=700-(x/3) where 0 is le
    13·1 answer
  • Suppose that GDP is $50 million in 2015 but falls to $48 million in 2016, and that no changes in personal consumption expenditur
    14·1 answer
  • If there is no clearly identified author for a document on the internet, you should try to determine the ____________ that is re
    10·1 answer
  • "It is ethical for a firm to have a policy to sell goods or services to people who cannot afford them or to people who should no
    13·1 answer
  • ________ are combating competitive pressures by providing better value with private-label merchandise; adding new value-added se
    11·1 answer
  • On January 1, $500,000 of 8%, 10-year bonds were sold for $530,000. The bonds require semiannual interest payments on June 30 an
    10·1 answer
  • Given the following historical demand and forecast, calculate the Tracking Signal in Week 3:Week 1 Demand: 50 Forecast: 49Week 2
    9·1 answer
  • The June 1 work in process inventory consisted of 5,000 units with $16,000 in materials cost and $12,000 in conversion cost. The
    12·1 answer
  • What is the product 0.3 × 8.7? please help me
    14·2 answers
  • What problems might face a company that focuses mainly on its most profitable customers?
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!