Sims Company, a manufacturer of tablet computers, began operations on January 1, 2019. Its cost and sales information for this year follows. Manufacturing costs Direct materials Direct labor 30 per unit 50 per unit Overhead costs Variable S Fixed 40 per unit $6,600,000 (per year) selling and administrative costs for the year. Variable $ 775,000 Fixed $5,000,000 Production and sales for the year 110,000 units Units produced Units sold 80,000 units sales price per unit $ 1. Prepare an income statement for the year using variable costing. 2. Prepare an income statement for the year using absorption costing. 360 per unit

Sims Company, a manufacturer of tablet computers, began operations on January 1, 2019. Its cost and sales information for this year follows. Manufacturing costs Direct materials Direct labor 30 per unit 50 per unit Overhead costs Variable S Fixed 40 per unit $6,600,000 (per year) selling and administrative costs for the year. Variable $ 775,000 Fixed $5,000,000 Production and sales for the year 110,000 units Units produced Units sold 80,000 units sales price per unit $ 1. Prepare an income statement for the year using variable costing. 2. Prepare an income statement for the year using absorption costing. 360 per unit

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 22E: Ellerson Company provided the following information for the last calendar year: During the year,...

See similar textbooks

Similar questions

The expected costs for the Maintenance Department of Stazler, Inc., for the coming year include: Fixed costs (salaries, tools): 64,900 per year Variable costs (supplies): 1.35 per maintenance hour Estimated usage by: Actual usage by: Required: 1. Calculate a single charging rate for the Maintenance Department. 2. Use this rate to assign the costs of the Maintenance Department to the user departments based on actual usage. Calculate the total amount charged for maintenance for the year. 3. What if the Assembly Department used 4,000 maintenance hours in the year? How much would have been charged out to the three departments?
A company estimates its manufacturing overhead will be $750,000 for the next year. What is the predetermined overhead rate given the following independent allocation bases? Budgeted direct labor hours: 60,000 Budgeted direct labor expense: $1,500,000 Estimated machine hours: 100,000
Ellerson Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 278,000, direct labor cost was 189,000, and overhead cost was 523,000. During the year, 100,000 units were completed. Refer to Exercise 2.21. Last calendar year, Ellerson recognized revenue of 1,312,000 and had selling and administrative expenses of 204,600. Required: 1. What is the cost of goods sold for last year? 2. Prepare an income statement for Ellerson for last year.
Self-Construction Olson Machine Company manufactures small and large milling machines. Selling prices of these machines range from 35,000 to 200,000. During the 5-month period from August 1, 2019, through December 31, 2019, Olson manufactured a milling machine for its own use. This machine was built as part of the regular production activities. The project required a large amount of time front planning and supervisory personnel, as well as that of some of the companys officers, because it was a more sophisticated type of machine than the regular production models. Throughout the 5-month period, Olson charged all costs directly associated with the construction of the machine to a special account entitled Asset Construction Account. An analysis of the charges to this account as of December 31, 2019, follows: Olson allocates factory overhead to normal production as a percent of direct labor dollars as follows: Olson uses a flat rate of 40% of direct labor dollars to allocate general and administrative overhead. During the machine testing period, a cutter head malfunctioned and did extensive damage to the machine table and one cutter housing. This damage was not anticipated and was the result of an error in the assembly operation. Although no additional raw materials were needed to make the machine operational after the accident, the following labor for rework was required: Olson has included all these labor charges in the asset construction account. In addition, it included in the account the repairs and maintenance charges of 1,340 that it incurred as a result of the malfunction. Required: 1. Compute, consistent with GAAP and common practice, the amount that Olson should capitalize for the milling machine as of December 31, 2019, when it declares the machine operational. 2. Next Level Identify the costs you included in Requirement 1 for which there are acceptable alternative procedures. Describe the alternative procedure(s) in each case.
Sims Company, a manufacturer of tablet computers, began operations on January 1, 2019. Its cost and sales Information for this year follows. Manufacturing costs Direct materials 24 24 30 per unit 50 per unit Direct labor Overhead costs 20 per unit $8,800, 000 (per year) variable 24 Fixed selling and administrative costs for the year variable $ 750,000 $4,500,000 Fixed Production and sales for the year Units produced 110,000 units 80, 000 units 360 per unit Units sold Sales price per unit 1. Prepare an Income statement for the year using varlable costing. 2. Prepare an Income statement for the year using absorption costing. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare an income statement for the year using variable costing. SIMS COMPANY Variable Costing Income Statement
Overtime produces and sells a mantel clock for $200 per unit. In 2020, 41,000 clocks were produced and 37,000 were sold. Other information for the year includes: Direct materials $42.00 per unit Direct manufacturing labor $8.00 per unit Variable manufacturing costs $5.00 per unit Sales commissions $14.50 per unit Fixed manufacturing costs $64.00 per unit Administrative expenses, all fixed $38.50 per unit What is the inventoriable cost per unit using absorption costing and variable costing? a. $119.00, $55.00 b. $117.00, $53.00 c. $49.00, $51.00 d. $53.00, $42.00
Information about Hannah Industries for the month ending December 31, 2019, is as follows: Sales $450,000 Cost of goods sold 329,000 Net operating income 22,000 Beginning inventories: Direct materials 70,000 Work in process…
Sims Company, a manufacturer of tablet computers, began operations on January 1, 2019. Its cost and sales information for this year follows. Manufacturing costs Direct materials 35 per unit 55 per unit Direct labor Overhead costs Variable 20 per unit (per year) $ Fixed $8,400,000 Selling and administrative costs for the year $ 750,000 $4,500,000 Variable Fixed Production and sales for the year Units produced 105,000 units 75,000 units 360 per unit Units sold Sales price per unit $ 1. Prepare an income statement for the year using variable costing. 2. Prepare an income statement for the year using absorption costing. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare an income statement for the year using absorption costing. SIMS COMPANY Absorption Costing Income Statement %24
TikTok Electronics manufactures an aluminium fibre tripod model "TRI-X" which sells for $1,600. The production cost computed per unit under traditional costing for each model in 2019 was as follows: Traditional Costing TRIX $700 $120 $228 $1, 048 Direct Materials Direct Labour ($20/hour) Manufacturing overhead ($38 per DLH) Total per unit cost In 2019, TikTok Electronics manufactured 26,000 units of TRI-X. Under traditional costing, the gross profit on TRI-X was $552 ($1,600-$1,048). Management is considering phasing out TRI-X as it has continuously failed to reach the gross profit target of $600. Before finalizing its decision, anagement asks TikTok Electronics manag based costing (ABC). The management accountant accumulates the following information about overhead for the year ended December 31, 2019. ent accountant to prepare an analysis using activity- Activity Cost Cost Drivers Estimated Expected Use of Pools Overhead Cost Drivers Purchasing Number of $1,200,000 40,000 orders…
The following manufacturing costs were incurred by the Miracle Mile Company in 2019: Direct materials $ 225,000 Direct labor 350,000 Manufacturing overhead 470,000 These costs were incurred to produce 50,000 units of product. Variable manufacturing overhead was 70% of the direct materials cost. In 2020, the direct material and variable overhead costs per unit will increase by 12%, but the direct labor costs per unit are not expected to change. Fixed manufacturing costs are expected to increase by 8%.Required:(a.) Prepare a cost estimate for an activity level of 40,000 units of product in 2020.(b.) Determine the total product costs per unit for 2019 and 2020.
X Co. Ltd. produces three types of products A, B and C and keeps accounts for Process I, Process II and Process III. Following statements show the relative importance of each type of product in each process : Process I Points Process II Points Process III Points Product A Product B 2 4 2 4 2 1 Product C 8 3 2 Costs for each process for March, 2019 are as follows : Process I Process II $ 9,000 3,000 5,100 Process III $ 9,000 1,800 2,400 Total Materials Labour Overheads 12,000 4,200 3,000 $ 30,000 9,000 10,500 19,200 17,100 13,200 49,500 Production during the period : Product A 600 units ; Product B 300 units ; Product C 900 units. You are required to- (a) prepare a statement showing weighted average production for each process and (b) compute the cost for each type of product.
TikTokElectronics manufactures an aluminium fibre tripod model“TRI-X” which sells for $1,600.The production cost computed per unit under traditional costing for each model in 2019was as follows: Traditional Costing TRIX Direct Materials $700 Direct Labour($20/hour) $120 Manufacturing overhead($38 per DLH) $228 Total per unit cost $1,048 In 2019, TikTokElectronics manufactured 26,000units of TRI-X. Under traditional costing, the gross profit on TRI-X was $552 ($1,600-$1,048). Management is considering phasing out TRI-X as it has continuously failed to reach the gross profit target of $600. Before finalizing its decision, management asks TikTokElectronics management accountant to prepare an analysis using activity-based costing (ABC). The management accountant accumulates the following information…