Brad mcdonald said sleeping takes a backseat compared to when he was in college. A.True B.False

Exercise 06-5 Absorption costing and variable costing income statements LO P2 Rey Company’s single product sells at a price of $

Andru [333]

Answer:

1. Income statement for the year

using Absorption Costing

Selling price ( 20,000 x $216 ) $4,320,000

Direct materials ( 20,000 x $20 ) $400,000

Direct labor ( 20,000 x $28 ) $560,000

Variable overhead ( 20,000 x $6 ) $120,000

Fixed overhead $160,000

Total Production Cost ($1,240,000)

Gross Profit $3,080,000

Selling and Admin Expenses

Variable Cost ( 20,000 x $18) $360,000

Fixed Cost $200,000

Total Period Cost ($560,000)

Operating Income $2,520,000

2. Income statement for the year

using Variable Costing

Selling price ( 20,000 x $216 ) $4,320,000

Direct materials ( 20,000 x $20 ) $400,000

Direct labor ( 20,000 x $28 ) $560,000

Variable overhead ( 20,000 x $6 ) $120,000

Variable Cost S&A ( 20,000 x $18) $360,000

Variable Production Cost ($1,440,000)

Contribution Margin $2,880,000

Fixed Cost

Production overhead cost $160,000

Fixed Cost S&A $200,000

($360,000)

Operating Income $2,520,000

Explanation:

Variable and absorption costing income statement have difference of treatment of Variable and Fixed costs as production cost and period cost.

Variable costing consider all variable costs as production cost and Absorption costing consider all the cost incurred in production either variable or fixed as production cost.

3 0

3 years ago

On June 1, Year 3, Pete, a partner in the Sky Castle partnership, contributed to the partnership some undeveloped land (not inve

emmainna [20.7K]

Answer:

d. Is short-term because she received the land from a partnership in which she is a partner.

Explanation:

On September 22, Year 7, Sky Castle distributed the land to Linda, who is also a partner.

6 0

3 years ago

g How much do you need when you retire to provide a $2,500 monthly check that will last for 25 years? Assume that your savings c

leva [86]

Answer:

The correct answer is $388,017.16

Explanation:

The assumption is that you have to save x money, that generates 0.5% a month, and that provide $2,500 monthly. The savings at second month will be (x-2500) * 1.005. At third month, the saving will be (((x - 2500) * 1.005)-2500)* 1.005. This continues until the twelfth month of the twenty fifth year. The short form of this calculations is $C * (1-(1+i)x^{-t})/ i$ , where C is the monthly provision (2500), i is the interest (0.5%) and t is the time (12 months per year, 25 years, 300 months). The result is $2,500 * (1-(1.005)x^{-300} )/0.005 = $388,017.16$ .

4 0

3 years ago

g"Radford Inc. manufactures a sugar product by a continuous process, involving three production departments-Refining, Sifting, a

kondaur [170]

Answer:

to record direct materials used by refining department:

Dr Work in process - refining department 381,000

Cr Raw materials 381,000

to record direct labor used by refining department:

Dr Work in process - refining department 149,000

Cr Wages - direct labor 149,000

to record factory overhead allocated to refining department:

Dr Work in process - refining department 96,200

Cr Factory overhead 96,200

The work in process passed to the next department (sifting) will be: beginning WIP + WIP raw materials + WIP wages + WIP overhead - ending WIP = $30,000 + $381,000 + $149,000 + $96,200 - $28,600 = $627,600

Dr Work in process - sifting department 627,600

Cr Work in process - refining department 627,600

3 0

3 years ago

The ABC Company sells plastic model cars in retail stores primarily to hobbyists. It has decided to modify the cars’ exterior pa

Nata [24]

Answer:

The correct answer is letter "B": target market.

Explanation:

The target market represents the potential consumers of a good or service. If ABC company changes the packaging of its plastic model cars to attract more discerning buyers they are focusing on attending other consumer preferences not necessarily implying that the previous customers will decline to purchase the plastic model cars in the new presentation.

6 0

3 years ago