Question
1) Inventoriable costs ________. A) include administrative and marketing costs B) are expensed in the accounting period in which the products are sold C) are
1) Inventoriable costs ________.
A) include administrative and marketing costs
B) are expensed in the accounting period in which the products are sold
C) are expensed in the accounting period in which the products are manufactured
D) are also referred to as nonmanufacturing costs
- Fill in the Blanks (20 points)
Black Pearl, Inc., sells a single product. The company's most recent income statement is given below.
Sales $50,000
Less variable expenses (30,000)
Contribution margin 20,000
Less fixed expenses (12,500)
Net income $ 7,500
Required:
a. Contribution margin ratio is ________%
b. Breakeven point in total sales dollars is $ ________
c. To achieve $40,000 in operating income, sales must total $ ________
d. If sales increase by $50,000, operating income will increase by $ ________
e. To achieve a $40,000 after tax income, given a tax rate of 20%, sales must total $________
- Calculation
Jordan Company has two departments, Assembly and Machining. Overhead is applied based on direct labor cost in Department Assembly and machine-hours in Department Machining. The following additional information is available:
Budgeted Amounts Assembly Machining
Direct labor cost $200,000 $165,000
Factory overhead $300,000 $180,000
Machine-hours 51,000 mh 30,000 mh
Actual data for Job #10 Assembly Machining
Direct materials requisitioned $10,000 $16,000
Direct labor cost $11,000 $14,000
Machine-hours 5,000 mh 3,000 mh
Required:
a. Compute the budgeted factory overhead rate for Assembly.
b. Compute the budgeted factory overhead rate for Machining.
c. What is the total overhead cost of Job 10?
d. If Job 10 consists of 50 units of product, what is the unit cost of this job?
- Calculation
Sodius Chemical Inc. placed 220,000 liters of direct materials into the mixing process. At the end of the month, 5,000 liters were still in process, 30% converted as to labor and factory overhead. All direct materials are placed in mixing at the beginning of the process and conversion costs occur evenly during the process. Sodius uses weighted-average costing.
Required:
a. Determine the equivalent units in process for direct materials and conversion costs, assuming there was no beginning inventory.
b. Determine the equivalent units in process for direct materials and conversion costs, assuming that 12,000 liters of chemicals were 40% complete prior to the addition of the 220,000 liters.
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