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Elden [556K]
3 years ago
9

Exercise 06-2 Computing unit and inventory costs under variable costing LO P1 Trio Company reports the following information for

the current year, which is its first year of operations. Assume instead that Trio Company uses variable costing. Direct materials $15 per unit Direct labor $16 per unit Overhead costs for the year Variable overhead $4 per unit Fixed overhead $160,000 per year Units produced this year 20,000 units Units sold this year 14,000 units Ending finished goods inventory in units 6,000 units1. Compute the product cost per unit using variable costing. Cost per unit of finished goods using: Variable costing Cost per unit of finished goods 2. Determine the cost of ending finished goods inventory
Business
1 answer:
storchak [24]3 years ago
8 0

Answer:

Trio Company

1. Using Variable Costing:

a. Product Cost per unit = $35 (see below)

b. Cost per unit of finished goods = $35 (see below)

2. Using variable cost, the cost of ending finished goods inventory = 6,000 * $35 = $210,000

b. Using total cost, the cost of ending finished goods inventory =

6,000 * $43 = $258,000

Explanation:

a) Calculation of Costs:

                              Cost per unit            Total Costs

Direct materials        $15                          $300,000

Direct labor                 $16                        $320,000

Variable overhead       $4                          $80,000

Total Variable             $35                       $700,000

Fixed Cost                    $8                        $160,000

Total Cost                  $43                       $860,000

b) Cost of Goods sold 14,000 x $43 = $602,000 using total cost per unit.

c) Cost of Goods sold 14,000 x $35 = $490,000 using variable cost per unit.

d) Variable costing is a method of assigning only variable costs to a product while the fixed overheads are treated as period expenses.

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Blake eats two bags of generic potato chips each day. Blake's hourly wage increases from $ 8 to $ 15 , and he decides to stop ea
Oksanka [162]

Answer:

-3.28

Explanation:

Given that,

Initial quantity, Q1 = 2

Final quantity, Q2 = 0

Change in quantity = Q2 - Q1

                                = 0 - 2

                                = -2

Initial income, M1 = $8

Final income, M2 = $15

Change in Income = M2 - M1

                               = $15 - $8

                               = $7

Average quantity:

= (2 + 0) ÷ 2

= 1

Average income:

= (15 + 8) ÷ 2

= 11.5

Therefore,

Percentage change in quantity demanded:

= (Change in quantity demanded ÷ Average quantity) × 100

= (-2 ÷ 1) × 100

= -200%

Percentage change in income:

= (Change in income ÷ Average income) × 100

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= 60.87%

Income elasticity of demand:

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2 years ago
Scrumptious Snacks Inc. manufactures three types of snack foods: tortilla chips, potato chips, and pretzels. The company has bud
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Answer:

Results are below.

Explanation:

<u>First, we need to calculate the number of processing hours:</u>

Processing hours= (0.25*3,000) + (0.1*6,000) + (0.3*3,500)

Processing hours= 750 + 600 + 1,050

Processing hours= 2,400

<u>Now, we can calculate the predetermined overhead rate:</u>

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined manufacturing overhead rate= 207,000 / 2,400

Predetermined manufacturing overhead rate=$86.25 per processing hour

<u>To allocate overhead, we need to use the following formula:</u>

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Tortilla chips= 86.25*75= 64,687.5

Potato chips= 600*86.25= 51,750

Pretzels= 86.25*1,050= 90,562.5

<u>Finally, the unitary cost:</u>

Tortilla chips= 64,687.5 / 3,000= $21.56

Potato chips= 51,750 / 6,000= $8.63

Pretzels= 90,562.5 / 3,500= $25.88

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