1. Global Systems began business on January 1 of the current year, producing a single product that is popular with home builders. Demand was very strong, allowing the company to sell its entire manufacturing output of 80,000 units. The following unit costs were incurred:

Manufacturing costs

Direct materials $15

Direct labor 8

Variable overhead 11

Fixed overhead 6

Selling & administrative costs

Variable 5

Fixed 2

Global anticipates an increase in productive output to 100,000 units and sales of 95,000 units in the next accounting period. The company uses appropriate drivers to determine cost behavior and estimates. REQUIRED: A. Assuming that present cost behavior patterns continue, compute the total expected costs in the upcoming accounting period.

B. George Levy is about to prepare a graph that shows the unit cost behavior for variable selling and administrative cost. If the graph's horizontal axis is volume and the vertical axis is dollars, briefly describe what George's graph should look like.

C. Determine whether the following costs are variable or fixed in terms of behavior: 1. Yearly lease payments for a state-of-the-art cutting machine. 2. A fee paid to a consultant who provided advice about quality issues. The fee was based on the number of consulting hours provided. 3. Cost of an awards dinner for "star" salespeople.

2. Quartz Products started and finished job no. C19 during June. The job required $15,000 of direct material and 75 hours of direct labor at $12 per hour. The predetermined overhead rate is $16 per direct labor hour. During June, direct materials requisitions for all jobs totaled $149,000; the total direct labor hours and cost were 6,200 hours at $12 per hour, and the total cost of jobs completed was $337,500. All of these figures include data that pertain to job no. C19. REQUIRED:

A. Prepare journal entries that summarize June's total activity. B. Determine the cost of job no. C19.

3. Shawinigan Inc. uses a weighted-average process-costing system. All materials are introduced at the beginning of production; conversion costs are incurred evenly throughout the manufacturing process. The following information pertains to April:

Beginning work in process (80% complete)	9,000 units
Goods completed during April	53,000 units
Ending work in process (30% complete)	12,000 units

The company's accountant has already computed the cost per equivalent unit, as follows: materials, $5; conversion, $14.

REQUIRED:

Calculate the cost of goods completed during April and the cost of the ending work-in-process inventory.

4. Tesco Company showed the following costs for last month.

Direct materials $40,000

Direct labour 35,000

Overhead 52,000

Selling expense 17,000

Administrative expense 12,000

Last month, Tesco produced and sold 20,000 units at a sales price per unit of $18. Assume no beginning or ending inventory balances for work in process and finished goods inventory.

Required:

Solve for the following amounts.

A. Total product cost for last month

B. Unit product cost for last month

C. Total period costs

D. Gross margin for last month

E. Operating income for last month

5. Viscount Corporation has a machining capacity of 200,000 hours per year. Utilization of capacity is normally 75%; it has been as low as 40% and as high as 90%. An analysis of the accounting records revealed the following selected costs:

	At a 40% Utilization Rate	At a 90% Utilization Rate
Cost A:
Total	$440,000	$ 440,000
Per hour	$5.50	?
Cost B:
Total	?	$1,944,000
Per hour	$10.80	$10.80
Cost C:
Total	$680,000	$1,330,000
Per hour	$8.50	$7.39

Viscount uses the high-low method to analyze cost behavior.

REQUIRED:

A. Classify each of the costs as being either variable, fixed or semi-variable.

B. Calculate amounts for the two unknowns in the preceding table.

C. Calculate the total amount that Viscount would expect at a 75% utilization rate for Cost A, Cost B, and Cost C.

D. Develop an equation that Viscount can use to predict the total cost for any level of hours within its range of operation.

6.During 2019, Charles Corporation produced 60,000 units and sold 50,000 for $10 per unit. Variable manufacturing costs were $4 per unit. Annual fixed manufacturing overhead was $120,000 ($2 per unit). Variable selling and administrative costs were $1 per unit sold, and fixed selling and administrative costs were $30,000.

REQUIRED:

How would you prepare an absorption costing income statement for Charles Corporation?