Chapter 2 Homework 1. (PBI) Hicks Products produces and sells patio furniture through a national dealership network. They purchase raw materials from a variety of suppliers and all manufacturing and assembly work is performed at their plant outside of Cleveland, Ohio. They recorded these costs for the year ending December 31, 2017. Construct an income statement for Hicks Products, to reflect their net income for 2017. Sales revenue Straight-line depreciation on office equipment Advertising and marketing expense Administrative salaries Cost of goods sold Rent on corporate headquarters $3,100,000 90,000 625.000 136.000 1,700,000 65,000 2. (PA4) Listed as follows are various costs found in businesses. Classify each cost as a fixed or variable cost, and as a product and/or period cost. 1. Wages of administrative staff b. Shipping costs on merchandise sold c. Wages of workers assembling computers d. Cost of lease on factory equipment Insurance on factory f Direct materials used in production of lamps g. Supervisor salary, factory h. Advertising costs 1 Property taxes, factory j Health insurance cost for company executives k Rent on factory G. 3. (EBS) Suppose that a company has fixed costs of $11 per unit and variable costs $6 per unit when 11.000 units are produced. What are the fixed costs per unit when 20.000 units are produced? 4. (PAS) Wachowski Company reported these cost data for the year 2017. Factory maintenance costs Direct labor, wages Direct labor, health insurance Indirect labor, health insurance Health insurance for production supervisor Administrative costs Rental of office space for administrative staff Sales commissions Direct material Indirect materials Advertising expense Depreciation on factory building Indirect labor, wages Production supervisor's salary S 90,000 352,000 32,000 15,000 6,500 55,000 17.500 52.500 1.230,000 632,000 39.000 62.000 70.000 32,000 a. Use the data to complete the following table, Total prime costs Total manufacturing overhead costs Total conversion costs Total product costs Total period costs (EA9) The cost data for Evencoat Paint for the year 2019 is as follows: Month January February March April May June July August September October November December Gallons of Paint Produced 110,000 68,000 71,000 77,000 95,000 101,000 125,000 95,000 95,000 89,000 128,000 122,000 Equipment Maintenance Expenses $70,700 66,800 67,000 68,100 69.200 70,300 70,400 68,900 69,500 68,600 72,800 71.450 a. Using the high-low method, estimate the fixed and variable costs then express the company's maintenance costs as an equation where x represents the gallons of paint produced b. Predict the maintenance costs if 90,000 gallons of paint are produced. c. Predict the maintenance costs if 81,000 gallons of paint are produced
