ACCT 202 Study Guide - Final Guide: Budget, Net Income

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blushllama275

19 Mar 2020

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Murphy manufacturing corporation makes and sells one product, cleverly named product x . Product x normally sells for per unit and is only sold in whole units! Production for april 2010 is expected to equal sales at a level of 32,000 units, which represents. The company expects inventory levels to remain unchanged for the month. (production equals sales). The following budget monthly estimates for manufacturing, selling and administrative expenses are available for normal capacity of 32,000 monthly units: 1. 50 (1) based on established standards of . 5 labor hours per unit at per hour. The following information was gathered for the previous. 12 months, regarding the other factory overhead costs: The static budget for production costs for the year would be: Direct materials direct labor overhead : the company wishes to use normal costing to apply overhead to production, on the basis of direct labor hours.

Related Questions

Schwiesow Corporation has provided the following information:

	Cost per Unit		Cost per Period
Direct materials	$	7.05
Direct labor	$	3.50
Variable manufacturing overhead	$	1.65
Fixed manufacturing overhead			$	11,000
Sales commissions	$	1.00
Variable administrative expense	$	0.40
Fixed selling and administrative expense			$	5,500

For financial reporting purposes, the total amount of period costs incurred to sell 5,000 units is closest to:

$5,500

$8,300

$12,500

$7,000

Kesterson Corporation has provided the following information:

	Cost per Unit		Cost per Period
Direct materials	$	6.20
Direct labor	$	3.10
Variable manufacturing overhead	$	1.35
Fixed manufacturing overhead			$	14,000
Sales commissions	$	1.50
Variable administrative expense	$	0.40
Fixed selling and administrative expense			$	4,500

If the selling price is $21.90 per unit, the contribution margin per unit sold is closest to:

$12.60

$9.35

$8.45

$5.65

At a volume of 5,000 units, Pwerson Company incurred $32,000 in factory overhead costs, including $14,000 in fixed costs. If volume increases to 6,000 units and both 5,000 units and 6,000 units are within the relevant range, then the company would expect to incur total factory overhead costs of: (Round intermediate calculations to 2 decimal places.)

Garrison 16e Rechecks 2017-06-28

$21,600

$35,600

$32,000

$18,000

13 A manufacturing company that produces a single product hasprovided the following data concerning its most recent month ofoperations:

Selling price	$149

Units in beginning inventory	0
Units produced	2,770
Units sold	2,520
Units in ending inventory	250

Variable costs per unit:
Direct materials	$51
Direct labor	$20
Variable manufacturing overhead	$10
Variable selling and administrative	$12
Fixed costs:
Fixed manufacturing overhead	$96,950
Fixed selling and administrative expenses	$35,280

The total gross margin for the month under absorption costingis:

$83,160

$17,640

$130,320

$141,120

14 A manufacturing company that produces a single product hasprovided the following data concerning its most recent month ofoperations:

Units in beginning inventory	0
Units produced	4,750
Units sold	4,650
Units in ending inventory	100

Variable costs per unit:

Direct materials	$	56
Direct labor	$	58
Variable manufacturing overhead	$	21
Variable selling and administrative	$	19

Fixed costs:

Fixed manufacturing overhead	$	99,750
Fixed selling and administrative	$	46,500

What is the variable costing unit product cost for the month?

$154 per unit

$175 per unit

$135 per unit

$141 per unit

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15 Bartelt Inc., which produces a single product, has providedthe following data for its most recent month of operations:

Number of units produced	4,600
Variable costs per unit:
Direct materials	$108
Direct labor	$105
Variable manufacturing overhead	$5
Variable selling and administrative expense	$12
Fixed costs:
Fixed manufacturing overhead	$184,000
Fixed selling and administrative expense	$322,000

There were no beginning or ending inventories. The absorptioncosting unit product cost was:

$213 per unit

$258 per unit

$218 per unit

$340 per unit

16 Rehmer Corporation is working on its direct labor budget forthe next two months. Each unit of output requires 0.09 directlabor-hours. The direct labor rate is $8.50 per direct labor-hour.The production budget calls for producing 5,600 units in June and6,100 units in July.

Required:

Construct the direct labor budget for the next two months,assuming that the direct labor work force is fully adjusted to thetotal direct labor-hours needed each month. (Round youranswers to 2 decimal places.)

	June	July
Required production in units
Direct labor hours per unit
total direct labor hours needed
direct labor cost per hour
total direct labor cost

orangeeagle418

Denton Company manufactures and sells a single product. Cost data for the product are given:


Variable costs per unit:
Direct materials			$	3
Direct labor				10
Variable manufacturing overhead				3
Variable selling and administrative				1
Total variable cost per unit			$	17
Fixed costs per month:
Fixed manufacturing overhead	$	63,000
Fixed selling and administrative		160,000
Total fixed cost per month	$	223,000

The product sells for $46 per unit. Production and sales data for July and August, the first two months of operations, follow:

	Units Produced	Units Sold
July	21,000	17,000
August	21,000	25,000

The companyâs Accounting Department has prepared the following absorption costing income statements for July and August:

	July		August
Sales	$	782,000	$	1,150,000
Cost of goods sold		323,000		475,000
Gross margin		459,000		675,000
Selling and administrative expenses		177,000		185,000
Net operating income	$	282,000	$	490,000

Required:

1. Determine the unit product cost under:

a. Absorption costing.

b. Variable costing.

2. Prepare contribution format variable costing income statements for July and August.

3. Reconcile the variable costing and absorption costing net operating incomes.

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ACCT 202 Study Guide - Final Guide: Budget, Net Income

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