BBAZ101_ACT2620 Fundamental of Managerial Accounting 20211 Review Exercises Problem 2 - Fill in the blank Sales Cost of goods sold ......... Gross margin......... Seling and administrative expres........... Net operating income (los). Year 1 $100,000 580,000 220,000 190,000 $ 30,000 Year 2 $640,000 400,000 240,000 180,000 $ 60,000 Year 3 $800,000 620.000 180.000 190,000 5 (10.000 Year 1 Year 2 Year 3 Production in units ....... 50,000 60,000 40,000 Sales in units ............ 50.000 40,000 50,000 Additional information about the company follows 1. The company's plant is highly automated. Variable manufacturing costs (direct materials, direct labor, and variable manufacturing overhead) total only $2 per unit, and fixed manufacturing overhead costs total $480,000 per year. 2. Fixed manufacturing overhead costs are applied to units of product on the basis of each year's production 3. Variable selling and administrative expenses were si per unit sold in each year. Fixed selling S1 . and administrative expenses aled S140,000 per year. 4. The company uses a FIFO inventory flow assumption. AMY Determine the amount of the following using the given data Questions 1. Year 2 absorption casting product unit cost . Year I total contribution margin 2 Year 3 fixed manufacturing overhead deferred in the ending inventory 3 Year 2 fixed manufacturing overhead released in the beginning inventory. Year 2 variable costing net operating income S 4 BBA2101_ACT2620 Fundamental of Managerial Accounting 20211 Review Exercises BBAZ101_ACT2520 Fundamental of Managerial Accounting 2021 Review Exercises Problem 3-fill in the blank Vulcan Company's contribution format income statement for Junc is given below: Vulcan Company Income Statement For the Month Ended June 30 .............. $750,000 Variable expenson 338.000 Contribution margin................ 414,000 Fixed expenses 370.000 Net operating Income $36.000 Problem 1) Doggy Company has three joint products, produced using single raw material. Joint production cost total $140,000 and allocated to each product equally. X-Wynal Z Wool Quantity produced in units........ 10,000 20,000 15.000 Sales value per unit at split-off point $ 12.00 S 7.50 $ Sales value after further processed.... 5 16,00 s 12.00 S 6.00 Additional processing cost per unit...... S 5.0 S 3,110 S To maximize company's overall profit, which product should be sold at split-off point and which product should be further proced X-Want Y-Wynnt ZW00 SV after further process Additional processing cost Netralizable value Management is disappointed with the company's performance and is wondering what can be done to improve profits. By examining sales and cost records, you have determined the following: The company is divided into two products and S. The Product N recorded $300,000 in sales and $156,000 in variable expenses during June; the remaining sales and variable expenses were recorded in the Southern Territory. Fixed expenses of $120,000 and $108,000 are traceable to the Product N and Product Srespectively. The rest of the fixed expenses are common to the two products and was alloested equally. Each territory has an average operating asset of $100,0 and with the used of these operating assets the company required a minimum rate of return on investment of 5% and 8% for Northern and Southern Territory respectively, Products Tocal L. Complete the table using the data of Vulcan Company Product N Sales Variable expenses Contribution margin Traceable fixed expenses Segment margin Common fixed expenses Net operating income 2) Fox Company selling price per unit on its improfitable product-line is $8010, cost data for the oth of this product-line below Por Unit DM 400 100 Variable MOH... Variable selling and administrative 75 Monthly production and sales of this product line total 1,000 units. Total fixed costs $211.000 per month. If the product is cropped variable selling and administrative expense can be reduced hy $15 per unit and 20% of fixed cost can be eliminated. How much would be the increase or decrease in profit, if the product line wis dropped! Determine the following using Vulcan Company data Questions AT 1 Product N rate of return on investment 2 Product S rate of retum on investment 2 Southern Territory margin Northem ferritory residual income 4 Southern Territory tamover. Selling price Relevant cost of the product line Manufacturing cost Variable selling Fixed.com Ir drop profit decrease per unit by Total decrease in profit % % 5 BBA2101_ACT2620 Fundamental of Managerial Accounting 20211 Review Exercises BBA2101_ACT2520 Fundamental of Managerial Accounting 2021 Review Exercises Problem The comparative balance sheet of Nesbitt Inc. for December 31, 2019 and 2020 is as follows: Nesbitt Ine. Comparative Balance Sheet December 31, 2019 and 2020 201201 2010 Assets An examination of the accounting records revealed that following aklitional information applicable to 2020 a. There was no purchase of land but a piece of land was sold for cash b. Mortgage note was issued for $60,00 c. Burkling was constructed for cash d. 2.500 shares of comme stock were issued in exchange for the bonds payable u. Cash dividends declared $60,000 SAS 10 91.350 1614.00 3.600 Trade receivable net Inventories Prepaid expenses Investment long-term) Land Building Accumulated depreciation building Machinery and equipment Accumulated depreciation machinery and equipment Patents 30,000 345,000 120,600 255,000 92.000 35.000 S2626 $42 500 61.150 109.500 2.700 35.000 50.000 210,000 110.400 255.000 165,000 40.00 S63045 Determine the following amount and indicate whether its cash inflows or cash outflows: Transactions Effect in Cash Amount Inflows or Outflows 1. Total depreciation expense (building & machinery and equipment 2 Income tax paid 3. Cash sales of long-term investment 4. Cash paid for the construction of building 5. Cost of common stock xsued, 6. Cash dividends paid 7. Net cash from operating activities. & Net cash froen investing activities 9. Net cash from Financing activities. 10. Interest expense paid Liabilities and Stockholders' quity Accounts payable (merchandise creditors) Acord expenses Income taxes payable Dividends uyable Mortape payable Bonds pawahle Common stock, S20 par Excess of issue price over par common stock Retnine.cuming $42,00 18,000 7.000 15,000 60,000 65.950 12.00 4,000 10.000 300,000 100,000 24.150 26.950 75.000 250.000 75.000 200 630450 The income statement for Nesbitt Inc. is shown below Nesbitt Inc. Income Statement For Year Ended December 31, 2020 Sales Cost of goods old Gra! Operating expenses Netoneming income Other income and expenses Gain on sales of investment Interested Net inecame balita Income tax Net income S800,000 480.000 320,000 1822002 137,300 $15,000 16.500 8.500 $145.00 49.30 $96.250 5/5 7