| Calculate the total monthly cost of the sales representatives salary for each of the following months: MONTH APRIL MAY JUNE JULY NUMBER OF UNITS SOLD 170 80 180 90 TOTAL VARIABLE COST ______ _______ ________ __________ TOTAL FIXED COST ______ ________ _________ _________ TOTAL SALARY COST $_______ $_______ $________ $_________ 7 Using JIT to minimize waste and lost opportunity LO 10-4 | Kate Connor, a teacher at Meadow Middle School, is in charge of ordering the T-shirts to be sold for the schools annual fund-raising project. The T-shirts are printed with a special Meadow School logo. In some years, the supply of T-shirts has been insufficient to satisfy the number of sales orders. In other years, T-shirts have been left over. Excess T-shirts are normally donated to some charitable organization. T-shirts cost the school $7 each and are normally sold for $14 each. Ms. Connor has decided to order 790 shirts. | | Required | | a. | If the school receives actual sales orders for 735 shirts, what amount of profit will the school earn? What is the cost of waste due to excess inventory? | PROFIT ( ) WASTE DUE TO EXCESS INVENTORY ( ) | 6 Upstream and downstream costs LO 10-2 During 2014, Welch Manufacturing Company incurred $44,000,000 of research and development (R&D) costs to create a long-life battery to use in computers. In accordance with FASB standards, the entire R&D cost was recognized as an expense in 2014. Manufacturing costs (direct materials, direct labor, and overhead) are expected to be $268 per unit. Packaging, shipping, and sales commissions are expected to be $54 per unit. Welch expects to sell 1,100,000 batteries before new research renders the battery design technologically obsolete. During 2014, Welch made 446,000 batteries and sold 393,000 of them. | | b. | Determine the 2014 amount of cost of goods sold and the ending inventory balance. COSTS OF GOODS SOLD ( ) ENDING INVENTORY ( ) | c. | Determine the sales price assuming that Welch desires to earn a profit margin that is equal to 25 percent of the total cost of developing, making, and distributing the batteries. (Round your answer to 2 decimal places.) SALES PRICE ( ) | d. | Prepare an income statement for 2014. Use the sales price developed in Requirement c. (Round your intermediate calculations to 2 decimal places.) WELCH'S MANUFACTURING COMPANY INCOME STATEMENT (COMPOSE A INCOME STATEMENT USING THE WORDS LISTED BELOW PLEASE) Cost of goods sold Research and development Sales revenue Selling expenses Net income or loss 9 Double-declining-balance and units-of-production depreciation: gain or loss on disposal LO 6-3, 6-4 [The following information applies to the questions displayed below.] | Graphics Service Co. purchased a new color copier at the beginning of 2014 for $35,150. The copier is expected to have a five-year useful life and a $6,270 salvage value. The expected copy production was estimated at 2,000,000 copies. Actual copy production for the five years was as follows: | | | | 2014 | 552,500 | | 2015 | 481,900 | | 2016 | 383,600 | | 2017 | 389,300 | | 2018 | 235,600 | | | | | Total | 2,042,900 | | | | | | | The copier was sold at the end of 2018 for $6,470. | 9 Exercise 6-10 Part a | a. | Compute the depreciation expense for each of the five years, using double-declining-balance depreciation. (Round your intermediate calculations and final answers to the nearest whole dollar amount. Leave no cells blank - be certain to enter "0" wherever required.) | DOUBLE-DECLINING BALANCE 2014 ___________________________ 2015 ___________________________ 2016 ___________________________ 2017 ___________________________ 10 Exercise 6-10 Part b | b. | Compute the depreciation expense for each of the five years, using units-of-production depreciation.(Round intermediate calculations to 3 decimal places. Round your final answers to nearest dollar amount.) UNITS OF PRODUCTION 2014 _______________________ 2015 ________________________ 2016 ________________________ 2017 _________________________ 11 Exercise 6-10 Part c | c. | Calculate the amount of gain or loss from the sale of the asset under each of the depreciation methods. DEPRECIATION METHODS AMOUNT EFFECT DOUBLE DECLINING BALANCE _________ _________ UNITS OF PRODUCTION _________ __________ 7 Computing and recording straight-line versus double-declining-balance depreciation LO 6-3 | [The following information applies to the questions displayed below.] | | At the beginning of 2014, Metal Manufacturing purchased a new computerized drill press for $210,000. It is expected to have a five-year life and a $30,000 salvage value. | 7 Exercise 6-9 Part a | a. | Compute the depreciation for each of the five years, assuming that the company uses | | | (1) | Straight-Line depreciation. STRAIGHT LINE DEPRECIATION | | | | | (2) | Double-Declining-Balance depreciation. (Round your answers to the nearest whole dollar amount. Leave no cells blank - be certain to enter "0" wherever required.) DOUBLE-DECLINING BALANCE YEAR 1 __________________________ YEAR 2 ___________________________ YEAR 3 __________________________ YEAR 4 ____________________________ | YEAR | | | | | |
