Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A company manufactures air cleaning machines. Here is the cost and sales information for 2020: . Selling price per machine $275.00 Variable Manufacturing cost per

image text in transcribed
image text in transcribed
image text in transcribed
A company manufactures air cleaning machines. Here is the cost and sales information for 2020: . Selling price per machine $275.00 Variable Manufacturing cost per machine $85.00 Fixed Manufacturing costs $125,000 Variable Selling and Administrative cost per machine $75 Fixed Selling and Administrative costs $195,000 . Target Operating Profit $250,000 Current number of machines sold in 2020 15,000 . Required: 1. Calculate the company's Break Even in Units (ROUND UP TO WHOLE UNIT) 2. Calculate the company's Break Even in Dollars (ROUND UP TO NEAREST WHOLE DOLLAR) 3. Calculate the company's Break Even in Units IF Variable Manufacturing Costs Increase by $10 per machine (ROUND UP TO WHOLE UNIT) 4. Calculate how many machines the company needs to sell if they want an operating profit of $250,000 (ROUND UP TO WHOLE UNIT) 5. Is the company currently selling enough units (see "current number of machines sold in 2020" above) to earn a profit based on your answer to #4? (ANSWER YES OR NO) Use the following information to answer the questions (6-9) below: . . . Materials Inventory, 1/1 Materials Inventory, 12/31 Maintenance costs Factory Supervisor Salary Work in Process Inventory, 1/1 Work in Process Inventory 12/31 Indirect Materials Direct Labor Finished Goods Inventory, 1/1 Finished Goods Inventory, 12/31 Depreciation- Machines Direct Materials Purchased Number of Units Completed $15,000 $ 8,000 $ 3,000 $10,000 $ 14,000 $ 9,000 $ 5,000 $ 29,000 $ 13,000 $ 18,000 $ 12,000 $ 25,000 80,000 . . Required: 6. What is the amount of Direct Materials used? 7. IGNORE YOUR ANSWER TO # 6. Assume that Direct Materials used was $30,000, what is the total amount of manufacturing costs? 8. IGNORE YOUR ANSWER TO # 7. Assume that the Total Amount of Manufacturing Costs equaled $90,000. What is the Cost of Goods Manufactured (completed) for the year? 9. What was the cost per unit? (ROUND TO NEAREST PENNY) The following information regarding overhead for a company is as follows. The company calculates a pre-determined (estimated) overhead rate at the beginning of the year so that it can determine the cost of jobs. Overhead is applied based on the number of actual machine- hours. It then adjusts overhead and cost of goods sold at year end. Please use to answer questions 10-13 below: Actual manufacturing overhead $33,725 Estimated manufacturing overhead $31,660 Actual machine hours 6,540 Estimated machine hours 6,600 . . Required: 10. Compute the manufacturing overhead rate per hour (ROUND TO NEAREST PENNY) 11. Compute the manufacturing overhead applied in total (ROUND TO WHOLE DOLLAR) 12. By how much was overhead OVERAPPLIED or UNDERAPPLIED? (ROUND TO WHOLE DOLLAR) 13. Indicate whether Cost of Goods Sold should be increased or decreased in order to adjust the balance to actual costs (based on your answer to # 12) (ANSWER INCREASED or DECREASED)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Keys To Reading An Annual Report

Authors: George T. Friedlob, Ralph E. Welton

4th Edition

0764139150, 978-0764139154

More Books

Students also viewed these Accounting questions

Question

8-6 Who poses the biggest security threat: insiders or outsiders?

Answered: 1 week ago