Solved by verified expert :Problem
1
Using the following information find the
unknown amounts. Assume each set of information is an independent case.
a. Merchandise Inventory Purchases $210,000
Cost
of goods sold 223,000
Beginning
balance 41,000
Ending
balance ?
b. Direct Materials Beginning balance $ 7,000
Ending
balance 14,000
Purchases 48,000
Direct
materials used ?
c. Work-in-process Inventory Ending balance $ 22,000
Cost
of goods manufactured 21,000
Beginning
balance 8,000
Current
manufacturing costs ?
d. Finished Goods Inventory Cost of goods manufactured $62,000
Ending
balance 20,000
Cost
of goods sold 61,000
Beginning
balance ?
Problem 2
Sprint Manufacturing Company produces two
products, X and Y. The following information is presented for both products:
X Y
Selling price per unit $30 $20
Variable cost per unit 20 5
Total fixed
costs are $292,500.
Required:
a. Calculate the contribution margin for each
product.
b. Calculate breakeven point in units of both X
and Y if the sales mix is 3 units of X for every unit of Y.
c. Calculate breakeven volume in total dollars
if the sales mix is 2 units of X for every 3 units of Y.
Problem 3
Rachel’s
Pet Supply Corporation manufactures two models of grooming stations, a standard
and a deluxe model. The following activity and cost information has been
compiled:
Number of Number of Number of
Product Setups Components Direct Labor Hours
Standard 3 30 650
Deluxe 7 50 150
Overhead costs $40,000 $120,000
Assume
a traditional costing system applies the $160,000 of overhead costs based on
direct labor hours.
a. What
is the total amount of overhead costs assigned to the standard model?
b. What
is the total amount of overhead costs assigned to the deluxe model?
Assume an activity-based costing system
is used and that the number of setups and the number of components are
identified as the activity-cost drivers for overhead.
c. What
is the total amount of overhead costs assigned to the standard model?
d. What
is the total amount of overhead costs assigned to the deluxe model?
Problem 4
Clothes,
Inc., has an average annual demand for red, medium polo shirts of 25,000 units.
The cost of placing an order is $80 and the cost of carrying one unit in
inventory for one year is $25.
Required:
a. Use
the economic-order-quantity model to determine the optimal order size.
b. Determine
the reorder point assuming a lead time of 10 days and a work year of 250 days.
c. Determine
the safety stock required to prevent stockouts assuming the maximum lead time
is 20 days and the maximum daily demand is 125 units.
Problem 5
The
following data are available for Ruggles Company for the year ended September
30, 2011.
Sales: 24,000
units at $50 each
Expected and actual production: 30,000 units
Manufacturing costs incurred:
Variable: $525,000
Fixed: $372,000
Nonmanufacturing costs incurred:
Variable: $144,800
Fixed: $77,400
Beginning inventories: none
Required:
a. Determine
operating income using the variable-costing approach.
b. Determine
operating income using the absorption-costing approach.
Problem 6
Jerry’s
TV and Appliance Store is a small company that has hired you to perform some
management advisory services. The following information pertains to 2011
operations.
Sales (1,000
televisions) $ 900,000
Cost of goods sold 400,000
Store manager’s salary
per year 70,000
Operating costs per year 157,000
Advertising and
promotion per year 15,000
Commissions (4% of
sales) 36,000
Part 1. What was the
variable cost per unit sold for 2011?
A)
$36
B)
$436
C)
$678
D)
$400
Part 2What were total
fixed costs for 2011?
A)
$678,000
B)
$436,000
C)
$242,000
D)
$227,000
Part 3 What are the
estimated total costs if Penny’s expects to sell 3,000 units next year?
A)
$1,550,000
B)
$1,332,000
C)
$1,671,000
D)
$1,453,000
Part 4Which cost
estimation method is being used by Jerry’s TV and Appliance Store?
A)
the industrial engineering method
B)
the conference method
C)
the account analysis method
D)
the quantitative analysis method
