Denver Tool Co. is a supplier that assembles purchased parts into components for three distinct markets-scooter...
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Denver Tool Co. is a supplier that assembles purchased parts into components for three distinct markets-scooter parts, lawn mower parts, and hand tool parts. Following is the statement of operating income for the most recent period: (Click the icon to view the statement of operating income.) Denver Tool uses a traditional cost accounting system. Operating data used in the cost accounting system are as follows: (Click the icon to view the operating data.) Requirement 1. You have been asked to determine operating income (loss) for each product line. Sales Cost of goods sold Direct material Indirect production (allocated based on machine hours) Gross profit Selling and administrative expenses: Commissions Distribution to warehouses (allocated based on weight in kilograms) Income before unallocated expenses Unallocated expenses Corporate salaries Other general expenses Operating income before taxes Total 350,000 120,000 65,100 97,500 10,000 18,000 $ 1,479,600 470,000 $ 1,009,600 $ 162,600 847,000 28,000 819,000 Purchase cost of parts assembled Machine hours Weight of parts shipped to distributors (kilograms) Sales commissions per unit Units assembled and sold Sales price per unit $ Scooter Parts 165,000 $ 9,050 80,000 4.20 $ 10,000 75.00 $ Lawn Mower Parts 115,000 $ 1,850 380,000 0.75 $ 27,000 15.20 $ Hand Tool Parts 70,000 1,100 190,000 0.05 57,000 5.60 Sales Cost of goods sold: Direct material Indirect production Total cost of goods sold Gross profit Selling and administrative expenses: Commissions Distribution to warehouses Total selling and administrative expenses Contribution to corporate expenses and profit Corporate expenses (unallocated): Corporate salaries Other general expenses Total unallocated expenses Onerating income Total $ 1,479,600 $ 350,000 120,000 470,000 1,009,600 65,100 97,500 162,600 847,000 10,000 18,000 28,000 819,000 Parts Denver Tool Co. is a supplier that assembles purchased parts into components for three distinct markets-scooter parts, lawn mower parts, and hand tool parts. Following is the statement of operating income for the most recent period: (Click the icon to view the statement of operating income.) Denver Tool uses a traditional cost accounting system. Operating data used in the cost accounting system are as follows: (Click the icon to view the operating data.) Requirement 1. You have been asked to determine operating income (loss) for each product line. Sales Cost of goods sold Direct material Indirect production (allocated based on machine hours) Gross profit Selling and administrative expenses: Commissions Distribution to warehouses (allocated based on weight in kilograms) Income before unallocated expenses Unallocated expenses Corporate salaries Other general expenses Operating income before taxes Total 350,000 120,000 65,100 97,500 10,000 18,000 $ 1,479,600 470,000 $ 1,009,600 $ 162,600 847,000 28,000 819,000 Purchase cost of parts assembled Machine hours Weight of parts shipped to distributors (kilograms) Sales commissions per unit Units assembled and sold Sales price per unit $ Scooter Parts 165,000 $ 9,050 80,000 4.20 $ 10,000 75.00 $ Lawn Mower Parts 115,000 $ 1,850 380,000 0.75 $ 27,000 15.20 $ Hand Tool Parts 70,000 1,100 190,000 0.05 57,000 5.60 Sales Cost of goods sold: Direct material Indirect production Total cost of goods sold Gross profit Selling and administrative expenses: Commissions Distribution to warehouses Total selling and administrative expenses Contribution to corporate expenses and profit Corporate expenses (unallocated): Corporate salaries Other general expenses Total unallocated expenses Onerating income Total $ 1,479,600 $ 350,000 120,000 470,000 1,009,600 65,100 97,500 162,600 847,000 10,000 18,000 28,000 819,000 Parts
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Related Book For
Introduction to Management Accounting
ISBN: 978-0133058789
16th edition
Authors: Charles Horngren, Gary Sundem, Jeff Schatzberg, Dave Burgsta
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