Question
Can you please help me with these question? Thank you so much. Question 1: Stark and Company would like to evaluate one of the product
Can you please help me with these question? Thank you so much.
Question 1:
Stark and Company would like to evaluate one of the product lines that they sell to the defense department. Every month the Stark and Company produce an identical number of units, although the sales in units differ from month to month.
Selling price
$100
Units in beginning inventory
105
Units produced
6,300
Units sold
6,050
Units in ending inventory
610
Variable costs per unit:
Direct materials
$60
Direct labour
$47
Variable manufacturing overhead
$3
Variable selling and administrative
$6
Fixed costs:
Fixed manufacturing overhead
$64,100
Fixed selling and administrative
$35,500
Required:
1)Under variable costing, identify the unit product cost for the month.
2)What is the unit product cost for the month under absorption costing?
3) develop an income statement for the month using the contribution format and the variable costing method.
4) arrange an income statement for the month using the absorption costing method.
Question 2:
The following information pertains to Death Star Corporation for a period:
Selling price per unit
48
Standard fixed manufacturing costs per unit
25
Variable selling and administrative costs per unit
2
Fixed selling and administrative cost per unit
14800
Beginning inventories:
Units
?
Standard fixed manufacturing cost
35,900
Standard variable manufacturing cost
18,750
Units produced
8,950
Units sold
8,600
Required:
1)Assume the unit standard costs data for the beginning and ending inventories remained constant during the period. What was the total standard cost of the ending inventory under absorption costing?
Question 3:
DC and Marvel would like to evaluate one of the product lines that they sell to defense department. Every month the Stark and Company produce an identical number of units, although the sales in units differ from month to month.
Selling price
$111
100
Units in beginning inventory
400
350
Units produced
8,700
6800
Units sold
8,800
7100
Variable costs per unit:
Direct materials
$33
28
Direct labour
$36
30
Variable manufacturing overhead
$3
2
Variable selling and administrative
$8
6
Fixed costs:
Fixed manufacturing overhead
$61,500
53,400
Fixed selling and administrative
$169,000
144500
Required:
1)Compute the total Contribution Margin.
2)Compute the Operating Income under Variable Costing.
3) make a reconciliation from your Variable Costing Operating Income to compute Operating Income under absorption costing.
Question 4:
Stark and Company's has following cost data:
Systems development
$28,000
Final product testing and inspection
$1 1,000
Quality data gathering, analysis, and reporting
$ 8000
Net cost of scrap
$57,000
Returns arising from quality problems
$55,000
Amortization of test equipment
$52,000
Rework labour and overhead
$15,000
Test and inspection of incoming materials
$38,000
Product recalls
$32,000
Required:
1)Determine the prevention cost?
2)Determine Total appraisal cost?
3)Determine the total internal failure?
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