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3 years ago

Exercise 19-08 a-b Oriole Corporation incurred the following costs while manufacturing its product.

Business

1 answer:

telo118 [61]3 years ago

6 0

Answer:

$371,700

Explanation:

The computation of the cost of goods sold is shown below:

Cost of goods manufactured = Direct materials used + Direct labor cost + Manufacturing overhead cost + beginning work in process inventory - ending work in process inventory

where,

Manufacturing overhead cost is

= Depreciation on plant + Factory supplies used + Property tax on plant

= $61,000 + $29,300 + $21,800

= $112,100

The cost of goods manufactured is

= $126,400 + $113,500 + $112,100 + $14,600 - $16,700

= $349,900

Now the cost of goods sold is

= Beginning finished goods + Cost of goods manufactured - ending finished goods

= $70,900 + $349,900 - $49,100

= $371,700

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Discuss the differences between the short run equilibrium and long run equilibrium from the perspective of producers and from th

ehidna [41]

Answer:

In the long-run, the economy tends to favor consumers more than it favors producers.

Explanation:

This is because, in competitive market structures, firms earn economic profit only in the short-run, but in the long-run, this economic profit either disappears, or decreases substantially, because the structure of the market itself provides incentive for a dynamic flux of firms in and out of the industry, and economic profit moves along that flux: it goes up when the number of firm in the industry goes down, and it goes down when the number of firms in the industry goes up.

Managers should understand these dynamics in order to be able to forecast trends and act accordingly, mainly by developing corporate strategy that tackle the forecasted scenarios.

Finally, an example of a business affected by a fall in demand is airline companies. The airline market is very competitive even if it is dominated by a few firms due to very high barriers to entry and exit. Airline companies are constantly pressured to offer lower prices, while costs do not necessarily fall at the same rate. The recent demand shock due to the current pandemic has left most airlines in a dire condition, using up past reserves to operate, and frequently in need of government assistance.

3 0

3 years ago

ABC Concept manufactures small tables in its Processing Department. Direct materials are added at the initiation of the producti

scoray [572]

Answer:

6,237

Explanation:

For computation of Abnormal spoilage totals first we need to find out the total spoiled units and normal spoiled units is shown below:-

Total spoiled units = Units in beginning Work in progress + Unit started - Units completed and transferred out - Units in ending Work in progress

= 23,000 + 76,500 - 72,100 - 19,000

= 99,500 - 72,100 - 19,000

= 8,400

and

Normal Spoiled units = Units completed and transferred out × Spoiled units percentage

= 72,100 × 3%

= 2,163

Abnormal Spoilage totals = Total spoiled units - Normal Spoiled units

= 8,400 - 2,163

= 6,237

Therefore for computing the abnormal spoilage totals we simply applied the above formula.

4 0

4 years ago

Lambert Company acquired machinery costing $110,000 on January 2, 2016. At that time, Lambert estimated that the useful life of

bulgar [2K]

Answer:

Depreciation expense for 2016 2017 2018

Method: Straight-line $15,833 $15,833 $15,833

Double-declining $36,663 $24,443 $16,296

The revision of the estimates at the beginning of 2018 would lead to lower yearly depreciation expense.

Explanation:

(a) Under straight-line method, depreciation expense is (cost - residual value) / No of years = ($110,000 - $15,000) / 6 years = $15,833 yearly depreciation expense. This depreciation expense of $15,833 applies to Years 2016, 2017 and 2018. Accumulated depreciation for those years is $15,833 x 3 years $47,499.

(b) The double-declining method is otherwise known as the reducing balance method and is given by the formula below:

Double declining method = 2 X SLDP X BV

SLDP = straight-line depreciation percentage

BV = Book value

SLDP is 100%/6 years = 16.67%, then 16.67% multiplied by 2 to give 33.33%

At Year 2016, 33.33% X $110,000 = $36,663

At Year 2017, 33.33% X $73,337 ($110,000 - $36,663) = $24,443

At Year 2018, 33.33% X $48,894 ($73,337 - $24,443) = $16,296

Accumulated depreciation expense for Years 2016 to 2018, under this method, is $77,402 (addition of all the yearly depreciation).

(c) If after 2 years, the revised estimated useful life becomes 7 years and the residual value is $10,000, depreciation would be calculated as follows:

Under the straight-line method, NBV (net book value) at the end of 2017 is: $110,000 - $15,833 x 2 years = $78,334

Depreciation expense is: ($78,334 - $10,000) / 7 years = $9,762 (decrease in 2018 yearly depreciation charge)

Under the double-declining method, SLDP is 100%/7 years = 14.29%, then multiplied by 2 to give 28.57%.

At Year 2018, 28.57% X $48,894 ($73,337 - $24,443) = $13,969 (decrease in 2018 yearly depreciation charge)

6 0

3 years ago

Blue Company acquired a manufacturing facility on four acres of land for a lump-sum price of $8,400,000. The building included u

Ksju [112]

Answer: c.$2,520,000 $2,520,000 $3,360,000

Explanation:

Sum the fair values from the independent appraisals up;

= 3,480,000 + 3,480,000 + 4,640,000

= $11,600,000

The proportion of the individual fair value to the total fair value can then be used to calculate the originals from the lump sum;

Building

= 3,480,000/11,600,000 * 8,400,000

= $‭2,520,000‬

Land

= 3,480,000/11,600,000 * 8,400,000

= $‭2,520,000‬

Equipment

= 4,640,000/11,600,000 * 8,400,000

= $‭3,360,000‬

6 0

3 years ago

Felinas Inc. produces floor mats for cars and trucks. The owner, Kenneth Felinas, asked you to assist him in estimating his main

Paul [167]

Answer:

D. $162

Explanation:

We know,

Using high-low method, variable cost per unit = (Highest maintenance expense - Lowest maintenance expense) / (Highest machine hours - Lowest machine hours)

Given,

Highest maintenance expense = $4,360

Lowest maintenance expense = $2,950

Highest machine hours = 2,500 hours

Lowest machine hours = 1,660 hours

Therefore,

Variable cost per unit = $(4360 - 2950)/(2500 - 1660)

Variable cost per unit = 1410/840 = 1.68

Total Fixed cost using lowest machine hours =

Total cost - (variable cost per unit x least machine hours)

= 2,950 - (1.68*1,660)

= $162

6 0

3 years ago