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
luda_lava [24]
3 years ago
12

Mary's Mugs produces and sells various types of ceramic mugs. The business began operations on January 1, year 1, and its costs

incurred during the year include these:
Direct materials cost $ 3,400 Direct manufacturing labor costs 25,280 Indirect manufacturing costs 1,140 Administration and marketing 2,350 Fixed costs: Administration and marketing costs 11,800 Indirect manufacturing costs 4,180

On December 31, year 1, direct materials inventory consisted of 3,400 pounds of material. Production in that year was 17,000 mugs. All prices and unit variable costs remained constant during the year. Sales revenues for year 1 was $52,500. Finished goods inventory was $6,000 on December 31, year 1. Each finished mug requires 0.4 pounds of material. (Do not round intermediate calculations.)

Required:

a. Compute the direct materials inventory cost, December 31, year 1.

b. Compute the finished goods ending inventory in units on December 31, year 1. (Do not round intermediate calculations.)

c. Compute the selling price per unit. (Round your answer to 2 decimal places.)

d. Compute the operating profit (loss) for year 1.
Business
1 answer:
vova2212 [387]3 years ago
7 0

Answer:

Explanation:

a.

Direct Material cost per unit = Cost of Direct materials/ units produced = $3400/17000 mugs = $0.20 per mug

Direct material used per mug = 0.40 pounds

Direct material cost per pound = $0.20 / 0.40 = $0.50 per round

Direct material inventory = 3400 * $0.50 = $1700

b. Compute the finished goods ending inventory in units on December 31, year 1.

Finished Goods inventory (in units) = Finished goods inventory / manufacturing cost per unit

Manufacturing cost per unit = (Direct material + Direct Labour + Indirect manufacturing cost)/Units Produced

= ($3400+$25280+$1140+$4180)/17000 = $2 per unit

Finished Goods inventory (in unit) :

Year 1 = $6,000/$2 = 3000 units

c. Compute the selling price per unit.

Selling price per unit = Revenues / units sold

Units sold = Units produced - units in the ending finished goods inventory = 17000-3000 = 14000

Selling price per unit = $52,500/14000 = $3.75

d.Compute the operating profit (loss) for year 1

Operating income for the year :

Revenues  $52,500

Cost of goods sold (14000*$2)  (28000 )

-----------------------------------------------------------------

Gross Margin                          $24,500

Less marketing and administrative cost:  

Variable cost ($2,350)  

Fixed cost ($11,800)

-----------------------------------------

                                                  ($14,150)

Operating Profit  $10,350

You might be interested in
You have a good friend from india who has done very well as after college. his work in telecommunications has landed him a job t
JulsSmile [24]
Your friend is in the category of people considered to have HIGH INCOME.

Friend's salary is more than $1 million and he lives off a credit card. He has high income but net worth can't be determined.

5 0
3 years ago
Argon Chemicals had a total overhead amount of $47,200 during the month of June. Of that total, 58% was related to the factory,
andreyandreev [35.5K]

Answer:

(C )  debit; $27,376.

Explanation:

The 58% portion related to factory expenses and  should be charged to Manufacturing Overhead (DR) as an indirect expense. This should be absorbed as part of production costs.

The Balance of 42% will be charged as general depreciation on office building.

6 0
3 years ago
This principle suggests that a certain amount of money today has different buying power than the same amount of money in the fut
Taya2010 [7]

Answer:

Time value of money

Explanation:

This principle states that money is more valuable at the moment or present than same amount of money in the future due its potential for increase in profit. A person or an investor that wants to make a return or gain will prefer to have the money now than have the same amount of money in the future. This is due to the potential of the money to increase in terms of earning capacity.

7 0
3 years ago
If a person drives an automobile, they are required by law to have automobile liability insurance. in which situation would this
cupoosta [38]

James backed into a vehicle in the grocery store parking lot and caused $2000 in damages to his own car and $3000 in damages to the other vehicle.
7 0
3 years ago
1) A face-to-face conversation in which you are asking probing questions to get
almond37 [142]

Answer:

2) B. secondary data

3) D. all of the above

3 0
2 years ago
Other questions:
  • 4. Although bananas are grown in almost one hundred countries worldwide, Ecuador and Costa Rica are among the world's largest ba
    9·1 answer
  • Manufacturing output in the u.s. continues to increase. the high unemployment of skilled workers who previously worked in the ma
    7·1 answer
  • Joan has 40 employees and produces 800 units of output; when she adds one more employee to her construction company. The total o
    15·1 answer
  • The market for household appliances in Richland is monopolistically competitive. Some firms in this market are incurring losses.
    5·1 answer
  • Which of the following is necessary to create an agency relationship? a. consideration b. an agent with contractual capacity c.
    11·1 answer
  • 1. Spratt Company purchased Treasury bond futures contracts when the quoted price was 93-50. When this position was closed out,
    11·1 answer
  • Would johnny sins still be famous if he was a girl? (WILL GIVE BRAINLIEST)
    8·2 answers
  • The owner of a small fleet of taxicabs had his cabs serviced by a national chain of auto service centers. One of his cabs went t
    6·1 answer
  • He following transactions are for Alonzo Company.
    11·1 answer
  • A consumer charges a $2,530. 16 purchase on their credit card. The card has a daily interest rate of 0. 42%. If the consumer pay
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!