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A. The Sunsoria Company employs a job-order pricing method and uses a predetermined overhead rate to apply manufacturing overhead to Work in Process inventory.
A. The Sunsoria Company employs a job-order pricing method and uses a predetermined overhead rate to apply manufacturing overhead to Work in Process inventory. In the current month, the business had no beginning or ending inventories. The following was among the transactions made by the company during the month: Account Direct materials issued to production Indirect materials issued to production Direct labor cost incurred Manufacturing overhead cost incurred Manufacturing overhead cost applied Amount in US $ 1,100,000 75,000 950,000 2,500,000 1,507,000 REQUIRED: i. ii. Determine the cost of goods manufactured? Compute the amount of cost of goods sold? (5 Marks) (5 Marks) B. AXA Company reported the following information during the month of September as follows: Account Sales Amount in US $ 4,000,000 70% of the sales Variable Expenses Fixed Expenses No of units produced & sold last month 18% of the sales 80,000 unit The company has no beginning or ending inventories. REQUIRED: i. Calculate the company's total contribution margin and contribution margin per unit. (5 Marks) ii. If the company intends to achieve a desired target profit of $600,000, How many units should be sold in this case? (3 Marks) iii. Refer to original information in the case, Calculate the company's break-even point in sales dollars? (2 Marks) iv. Compute the company's margin of safety in dollars. (3 Marks) V. Is the company's degree of operating leverage good enough? give your reason?
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Answer A i To determine the cost of goods manufactured we need to calculate the total manufacturing costs incurred during the month Total Manufacturin...Get Instant Access to Expert-Tailored Solutions
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