QUESTION 1 A company manufactures and sells a single product. Budgeted data per unit of the product is: (20 Marks) Selling Price Variable Cost* Fixed Production overhead R 8.50 3.70 2.90 *All variable costs are manufacturing i.e there are no non-manufacturing variable costs. The above fixed production overhead absorption rate is based on budgeted production of 12,000 units per period. Budgeted non-production overhead (all fixed) is R16, 800 per period. Actual sales and production for two periods has been: Sales Production Period 1 11 600 units 12 000 units Period 2 12 400 units 12 300 units There was no stock at the start of Period 1. The selling price, unit variable costs and total fixed costs were as per budget in both periods. REQUIRED 1.1 Prepare statements of Comprehensive income for both periods (ie period 1 & Period 2), using absorption costing, showing the actual results for each of the two periods. (7) The company wishes to compare the results reported in (1.1) above with those that would be reported using marginal costing. Prepare the statement of comprehensive income for periods (ie period 1 & Period 2), using marginal costing, showing the actual results for each of the two periods.

QUESTION 1 A company manufactures and sells a single product. Budgeted data per unit of the product is: (20 Marks) Selling Price Variable Cost* Fixed Production overhead R 8.50 3.70 2.90 *All variable costs are manufacturing i.e there are no non-manufacturing variable costs. The above fixed production overhead absorption rate is based on budgeted production of 12,000 units per period. Budgeted non-production overhead (all fixed) is R16, 800 per period. Actual sales and production for two periods has been: Sales Production Period 1 11 600 units 12 000 units Period 2 12 400 units 12 300 units There was no stock at the start of Period 1. The selling price, unit variable costs and total fixed costs were as per budget in both periods. REQUIRED 1.1 Prepare statements of Comprehensive income for both periods (ie period 1 & Period 2), using absorption costing, showing the actual results for each of the two periods. (7) The company wishes to compare the results reported in (1.1) above with those that would be reported using marginal costing. Prepare the statement of comprehensive income for periods (ie period 1 & Period 2), using marginal costing, showing the actual results for each of the two periods.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter7: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 46E: Lotts Company produces and sells one product. The selling price is 10, and the unit variable cost is...

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Lotts Company produces and sells one product. The selling price is 10, and the unit variable cost is 6. Total fixed cost is 10,000. Required: 1. Prepare a CVP graph with Units Sold as the horizontal axis and Dollars as the vertical axis. Label the break-even point on the horizontal axis. 2. Prepare CVP graphs for each of the following independent scenarios: (a) Fixed cost increases by 5,000, (b) Unit variable cost increases to 7, (c) Unit selling price increases to 12, and (d) Fixed cost increases by 5,000 and unit variable cost is 7.
Income Statements under Absorption and Variable Costing In the coming year, Kalling Company expects to sell 28,700 units at 32 each. Kallings controller provided the following information for the coming year: Required: 1. Calculate the cost of one unit of product under absorption costing. 2. Calculate the cost of one unit of product under variable costing. 3. Calculate operating income under absorption costing for next year. 4. Calculate operating income under variable costing for next year.
Variable Cost Ratio, Contribution Margin Ratio Chillmax Company plans to sell 3,500 pairs of shoes at 60 each in the coming year. Unit variable cost is 21 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Fixed factory overhead is 30,000 and fixed selling and administrative expense is 48,000. Required: 1. Calculate the variable cost ratio. 2. Calculate the contribution margin ratio. 3. Prepare a contribution margin income statement based on the budgeted figures for next year. In a column next to the income statement, show the percentages based on sales for sales, total variable cost, and total contribution margin.
Kirchoff, Inc., manufactures a product with the following costs: Direct materials Per Unit Per Year P18.00 Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable SG&A expenses P11.90 P2.10 P1,422,000 P3.60 Fixed SG&A expenses The pricing calculations are based on budgeted production and sales P1,540,500
Analyzing Income under Absorption and Variable Costing Variable manufacturing costs are $126 per unit, and fixed manufacturing costs are $157,500. Sales are estimated to be 10,000 units. If an amount is zero, enter "O" a. How much would absorption costing operating income differ between a plan to produce 10,000 units and a plan to produce 15,000 units? 141.75 X b. How much would variable costing operating income differ between the two production plans? 136.5 X
Mazoon Company has information on its revenue and costs is as follows: Selling price per unit $80; Variable costs per unit includes: Direct material $16, Direct manufacturing labor $8, Manufacturing overhead $8, and Selling costs $10; Annual fixed costs $96,000. What is the contribution margin percentage? Finisk a. 47.5% O b. 52.5% O c. 70% ype here to search & 7. V 3 5. 8. W. R Y. G H. V M alt ctri alt 立
Breakeven analysis and target profit, taxes, what - if analysis Pome Company produces a single product: the Core. The .....$30 Materials cost. . . 7 following table provides the Core's details: Per unlt Selling price. Labor cost. . . . . . . 6 Variable overhead cost. . . . . 2 Sales commissions. . . . . . . . 10% of selling price for the upcoming year, Pome Company expects to sell 500,000 units of the Core, have total fixed costs of $ 4,500,000, and face a tax rate of 30% of income. (c) The marketing manager believes that if the Core's price is cut by $2 unit, sales will increase by 10% . Is this change desirable from a financial perspective? (d) Ignore part (c) when answering this question. The production manager believes that if Pome Company rents a new machine, total manufacturing variable costs (materials, labor, and overhead) per unit will each drop by 10%. What is the annual rent for this machine so that the income with this machine will equal the income in part (a) = $1050000
3)Some cost information of the enterprise, which calculates its costs according to the Standard Cost Method, is as follows.Total Budgeted Fixed General Production Expenses = 2.000.-₺Unit Budgeted Variable General Production Expense = 1,10.-₺/brTotal Actual Direct Labor Hours = 1.500 DİSTotal Standard Direct Labor Hours = 1.300 DISRequested: Calculate the “Efficiency Difference of General Production Costs”. A. 120.-₺ positiveB. 320.-₺ negativeC. 120.-₺ negativeD. 320.-₺ positiveE. 220.-₺ negativeF. 220.-₺ positive
be determined using the above information Mazoon Company has information on its revenue and costs is as follows: Selling price per unit $125; Variable costs per unit includes: Direct material $15, Direct manufacturing labor $10, Manufacturing overhead $5, and Selling costs $10; Annual fixed costs $78,000. What is the contribution margin percentage? O a. None of the given answers O b. 68% O c. 70% d. 32% e. 60% NEXT PAGE AGEVindows but Jail ENG G 4)
ook int rint rences W ! Required information [The following information applies to the questions displayed below.] Hudson Company reports the following contribution margin income statement. Sales (9,900 units at $225 each) Variable costs (9,900 units at $180 each) Contribution margin Fixed costs Income HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31 1. Amount of sales 2. Margin of safety $ 1,167,000 900 1. Assume Hudson has a target income of $165,000. What amount of sales (in dollars) is needed to produce this target income? 2. If Hudson achieves its target income, what is its margin of safety (in percent)? (Round your answer to 1 decimal place.) % Help DD Save & Exit Submit Check my work F10
Mazoon Company has information on its revenue and costs is as follows: Selling price per unit $175; Variable costs per unit includes: Direct material $60, Direct manufacturing labor $8, Manufacturing overhead $8, and Selling costs $10; Annual fixed costs $45,000. What is the contribution margin percentage? O a. 56.6% O b. 61.1% O c. None of the given answers d. 50.9% Ое. 49.1%
QUESTION 1 Dee and Co. Limited makes and sells a particular product. At the moment, the company uses absorption costing to measure profits and inventory values. The cost per unit of each item of the product is as follows: GHe Direct material (6 kilograms@GHé9per kilo) 54 Direct labour (5 hours@GHe8per hour) 40 Fixed production overhead 30 The fixed production overhead figure has been calculated on the basis of a budgeted normal volume of 32,000 units per annum. The fixed production overhead incurred amount to GH₵960,000 per annum. Costs relating to sales, distribution and administration are: Fixed GH₵ 420,000 per annum Variable 15% of the sales value. There were no units of finished goods inventory at…