John Company produces hats and sells them for $100 each. His cost to produce the hats are: DM 20 per unit DL 30 per unit VMOH 10 per unit FMOH 40,000 Selling expenses are $5 per unit and are all variable. Administrative expenses of 25,000 are all fixed. John produced 5,000 hats; sold 4,000; and had no beginning inventory. Complete the income statement and calculation of net income under absorption costing. Absorption Costing Income Statement Sales Cost of Goods Sold: 80,000 Direct labor Fixed manufacturing overhead Total Cost of Goods Sold Gross profit 128,000 Selling expenses 25,000 45,000 Net income

John Company produces hats and sells them for $100 each. His cost to produce the hats are: DM 20 per unit DL 30 per unit VMOH 10 per unit FMOH 40,000 Selling expenses are $5 per unit and are all variable. Administrative expenses of 25,000 are all fixed. John produced 5,000 hats; sold 4,000; and had no beginning inventory. Complete the income statement and calculation of net income under absorption costing. Absorption Costing Income Statement Sales Cost of Goods Sold: 80,000 Direct labor Fixed manufacturing overhead Total Cost of Goods Sold Gross profit 128,000 Selling expenses 25,000 45,000 Net income

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter11: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 16E

See similar textbooks

Similar questions

Cullumber Company makes three models of tasers. Information on the three products is given below. Sales Variable expenses Contribution margin Fixed expenses Net income (a) Net income $ (b) Shocker Net Income Tingler $300,000 $500,000 Tingler Net Income $ Total Net Income (c) Why or why not? Compute current net income for Cullumber Company. ta Net income would 151,400 148,600 $ 119,400 S $29,200 Fixed expenses consist of $298,000 of common costs allocated to the three products based on relative sales, as well as direct fixed expenses unique to each model of $30,000 (Tingler), $80,800 (Shocker), and $34,300 (Stunner). The common costs will be incurred regardless of how many models are produced. The direct fixed expenses would be eliminated if that model is phased out. James Watt, an executive with the company, feels the Stunner line should be discontinued to increase the company's net income. Shocker 197,000 303,000 229,800 $73,200 Compute net income by product line and in total for…
Use the information below to answer the following question(s). Franscioso Company sells several products. Information of average revenue and costs is as follows: Selling price per unit $28.50 Variable costs per unit: Direct material $5.25 Direct manufacturing labour $1.15 Manufacturing overhead $0.25 Selling costs $1.85 Annual fixed costs $110,000 The Franscioso Company contribution margin ratio is O A. 0.702:1. O B. 1.425:1. O C. 0.298:1. O D. 1.102:1. O E. 0.637:1.
Northenscold Company sells several products. Information of average revenue and costs are as follows: Selling price per unit $20.00 Variable costs per unit: Direct materials $4.00 Direct manufacturing labor $2.00 ABC cost per unit $0.50 Fixed MOH $0.40 Variable MOH $0.30 Selling costs $2.00 Annual fixed costs $96,000 Calculate the number of units Northenscold's must sell to yield a profit of $144,000. (round to nearest whole unit).
Jamison Company uses the total cost method of applying the cost-plus approach to product pricing. Jamison produces and sells Product X at a total cost of $800 per unit, of which $540 is product cost and $260 is selling and administrative expenses. In addition, the total cost of $800 is made up of $460 variable cost and $340 fixed cost. The desired profit is $168 per unit. Determine the markup percentage on total cost. %
Karera Bicycle shop sells 21-speed bicycles. For purposes of a cost-volume profit analysis, the shop owner divided sales into two-models: Model Sales Price Invoice Cost Sales Commission High-quality P10,000 P5,500 P500 Medium-quality 6,000 2,700 300 Seventy percent of the shop’s sales are medium quality bikes. The shop’s annual fixed expenses are P1,485,000. a. Compute the weighted average unit contribution margin assuming a constant sales mix. b. What is the shop’s break-even sales volume? c. How many bicycles of each model must be sold to earn a target net income of P990,000?
Green Thumb Garden Tools Inc. produces and sells home and garden tools and equipment. A lawnmower has a total cost of $230 per unit, of which $160 is product cost and $70 is selling and administrative expenses. In addition, the total cost of $230 is made up of $120 variable cost and $110 fixed cost. The desired profit is $58 per unit. Determine the markup percentage on product cost.fill in the blank --- %
Jenna Corporation sells a single product. Management has provided the following data for two levels of monthly sales volume. The company sells the product for $172.50 per unit. Sales Volume in Units 4,000 5,000 Cost of Sales (COS) $307,600 $384,500 Selling, General & Administrative Costs (SG&A) $321,200 $337,000 Selling Price Per Unit $173 Total costs for these cost categories and may include both Fixed and Variable costs. HINT: See high-low analysis. 1. Calculate the total contribution margin when 4,300 units are sold. 2. What is the breakeven point in Sales dollars if Advertising (a fixed SG&A cost) is increased by $40,000? Please show calculations.
Jamison Company produces and sells Product X at a total cost of $1,300 per unit, of which $880 is product cost and $420 is selling and administrative expenses. In addition, the total cost of $1,300 is made up of $740 variable cost and $560 fixed cost. The desired profit is $169 per unit. Determine the markup percentage on total cost.fill in the blank 1 %
The XYZ Company produces and sells two products: The Riffs and The Raffs. Below is revenue and cost information to facilitate the development of a basic segmented income statement. Product Riffs Raffs Sales Price per unit $8.00 6.00 Variable Cost per unit $3.20 3.00 Traceable Fixed Costs $62,000 $44,000 It is expected that the company will incur $21,000 of common fixed expenses and unit sales are expected to be 12,000 of Riffs and 18,000 of Raffs. Required: Construct a Contribution Format Income Statement segmented by product line and company total.
Blossom Company had the following amounts from its income statement: Sales revenue (800 units) $64000 Cost of goods sold - fixed 16000 Cost of goods sold - variable 14800 Selling expenses - fixed 5600 Selling expenses - variable 4800 Administrative expenses - fixed 4000 Administrative expenses - variable 6000 How much is Blossom's contribution margin? O $49200. O $38400. $33200. O $12800.
Solomon Manufacturing Company makes a product that sells for $75.30 per unit. Manufacturing costs for the product amount to $26.90 per unit variable, and $66,000 fixed. During the current accounting period, Solomon made 3,300 units of the product and sold 2,500 units. Selling and administrative expenses were zero. Required a. Prepare an absorption costing Income statement. b. Prepare a variable costing Income statement. Complete this question by entering your answers in the tabs below. Required A Required B Prepare an absorption costing income statement. Note: Do not round intermediate calculations. SOLOMON MANUFACTURING COMPANY Absorption Costing Income Statement
Karlik Enterprises distributes a single product whose selling price is $24 per unit and whose variable expense is $18 per unit. The company's monthly fixed expense is $24,000. Required: 1. Prepare a cost-volume -profit graph for the company using sales volumes of zero units and 8,000 units.