[PDF] Maxwell Company Manufactures And Sells A Single Product. The ...

Search

• Categories
• Top Downloads
• Login
• Register
Search

• Home
• Maxwell Company manufactures and sells a single product. The following costs were incurred during the company\'s first year of operations:

Maxwell Company manufactures and sells a single product. The following costs were incurred during the company\'s first year of operations: May 12, 2016 | Author: Amberlynn Richards | Category: N/A DOWNLOAD PDF (1.1MB) Share Embed Donate Report this link

Short Description

1 1. Maxwell Company manufactures and sells a single product. The following costs were incurred during the company's fir...

Description

1. value: 10.00 points Maxwell Company manufactures and sells a single product. The following costs w ere incurred during the company's first y ear of operations: Variable costs per unit: Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per y ear: Fixed manufac turing ov erhead Fixed selling and administrative expenses $18 $7 $2 $2 $ 200,000 $ 110.000 During the y ear. the company produced 20,000 units and sold 16,000 units. The selling price of the company's product is $50 per unit. Required: 1. Assume that the company uses absorption costing: a. Compute the unit product cost. (Omit the " $" sign in your response.) Unit product cost 37 1 b. Prepare an income statement for the y ear. (Input all amounts as positive values except losses which should be indicated by a minus sign. Omit the "$" sign in your response.) Absorption Cosiing Income Statement [Sal~ ICost of goods s~ld IGross margin ISelling and administrative expenses INet operating income (loss) -. 1 -. 1 $1 800000 1 I 592000 1 -. 1 208000 1 -. 1 142000 1 -. 1 $1 66000 1 2. Assume that the company uses v ariable costing: a. Compute the unit product cost. (Omit the"$" sign in your response.) $J,____2_.7I Unit product cost b. Prepare an income statement for the y ear. (Input all amounts as positive values except losses which should be indicated by a minus sign. Omit the "$" sign in your response.) Variable Costing Income Statement ISales -. 1 .. Less: Variable expenses Variable cost of goods sold Variable selling expense .. IContribution margin -. 1 Less: Fixed expenses Fixed selling and administrative expenses Fixed manufacturing overhead .. .. INet operating income (loss) -. 1 $1 $ 432,000 32,000 800000 1 464000 1 336000 1 110,000 200,000 310000 1 $1 26000 1 3. The company 's controller believes that the company should have set last y ear's selling price at $51 instead of $50 per unit. She estimates the company could have sold 15,000 units at a price of $51 per unit, thereby increasing the company's gross margin by $2,000 and its net operating income by $4,000. a. Do y ou think the absorption costing approach is the proper w ay to assess the merits of the proposed price increase? O Yes 1!J N0 b. Do y ou think the v ariable costing approach is the proper w ay to assess the merits of the proposed price inc rease? 1,!) Yes O No c. Using the variable costing approach, by how much will profits increase or dec rease if the price increase in implemented? [Decrease~ chetk my work ~ eBook Links i2} $ l~_ _6_0_00..,..1 ':~"' references © 2015 http://mgmt027.wordpress.com 2. value: 10.00 points CompuDesk, Inc., makes an oak desk specially designed for personal computers. The desk sells for $200. Data for last y ear's operations follow: Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: Direct materials Direct labor Variable manufac turing ov erhead Variable selling and administrative 0 10,000 9,000 1,000 $ 60 30 10 20 $ 120 Total variable cost per unit Fixed costs: Fixed manufac turing overhead Fixed selling and administrativ e $300,000 450,000 Total fixed costs $750,000 Required : 1. Assume that the company uses v ariable costing. Comput e the unit product cost for one computer desk. (Omit the " $" sign in your response.) Unit produc t cost $ ._I_ _1_0_, oI 2. Assume that the company uses v ariable costing. Prepare a contribution format income statement for the y ear. (Input all amounts as positive values except losses which should be indicated by a minus sign. Om i t the " $" sign in your response.) Variable Costing Income Statement ISales $ ~I_ _ 18_00_0_ 00~1 ·I Variable exoenses: Variable cost of goods sold Variable selling and administrative expense: • $ IContribution margin • Fixed exnnses: Fixed manufac turing overhead Fixed selling and administrative expenses • • INet operating income (loss) •I 900,000 180,000 1080000 1 I 120000 1 300,000 450,000 750000 1 $1 -30000 1 3. W hat is the company 's break-ev en point in terms of units sold? I 9375 units Break-ev en point theck mv work ~ eBook Links (2) @ references © 2015 http://mgmt027.wordpress.com 3. value 10.00 points Shastri Bicycle of Bombay, india, produces an inexpensive, y et ruggeifblcycle for use on the city's crowded streets that it sells for 500 rupees. (Indian currency is denominated in rupees, denoted by ~.) Selected data for the company's operations last year follow: Units in beginning inventoiy Units produced Units sold Units in ending inventory Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs: Fixed manufacturing overhead Fixed selling and administrative 0 10.000 8.000 2,000 ~ ~ 120 140 ~ ~ ~ ~ 50 20 600,000 400,000 Required: 1. Assume that the company uses absorption costing. Compute the unit product cost for one bicycle. (Omit the"'°' sign in your response.) Unrt product cost 370 ~ '-- 2. Assume that the company uses variable costing. Compute the unit product cost for one bicycle. (Omit the'" " sign in your response.) Unit product cost ctmk my work ltJ eBook Link li \fiew Hint# I View more...

Comments

Report "Maxwell Company manufactures and sells a single product. The following costs were incurred during the company\'s first year of operations:"

Please fill this form, we will try to respond as soon as possible.

Your name Email Reason -Select Reason- Pornographic Defamatory Illegal/Unlawful Spam Other Terms Of Service Violation File a copyright complaint Description Close Submit Share & Embed "Maxwell Company manufactures and sells a single product. The following costs were incurred during the company\'s first year of operations:"

Please copy and paste this embed script to where you want to embed

Embed Script Size (px) 750x600 750x500 600x500 600x400 URL Close Copyright � 2017 SILO Inc.