Comprehensive Problem Chapters 18-21 . Acct 201The Comprehensive Problem starting on page 1163 - 1165

Comprehensive Problem For Chapters 18 - 21 Requirements 1. Complete a production cost report for the Cutting Department and the Sewing Department. What is the cost of one basic shirt? 2. Determine the total cost and the average cost per shirt for jobs 367, 368, 369, and 370. If the company set the sales price at 160% of the total cost, determine the total sales price of each job. In addition to the custom jobs, the Savannah Shirt Company sold 1,250 basic shirts (assume the beginning balance in Finished Goods Inventory is sufficient to make these sales, and the unit cost of the basic shirts in Finished Goods Inventory is the same as the unit cost incurred this month). If the company set the sales price at 140% of the cost, determine the sale price per unit, total sales revenue, and the total cost of goods sold for the basic shirts. Calculate the total revenue and total cost of goods sold for all sales, basic and custom. Assume the company sold only basic shirts (no custom designs) and incurred fixed costs of $1,403 per month. a. Calculate the contribution margin per unit, contribution margin ratio, required sales in units to break even, and required sales in dollars to break even. the margin of safety in units and dollars. b. Determine c. Graph Savannah Shirt Company CVP relationships. Show the break even point, the sales in revenue line, the fixed cost line, the total cost line,Suppose the operating loss area, andCompany the operating income d. the Savannah Shirt wants to earnarea. an operating income of $4,100 per month. Compute the required sales in units and dollars to achieve this profit goal. The Savannah Shirt Company is considering adding a new product line, a cloth shopping bag with custom screen printing that will be sold to grocery stores. If the current market price of cloth shopping bags is $1.25 and the company desires a net profit of 40%, what is the target cost? The company estimates the full product cost of the cloth bags will be $0.60. Should the company manufacture the cloth bags? Why or why 3. 4. 5. 6. Solution: Requirement 1 THE SAVANNAH SHIRT COMPANY Production Cost ReportCUTTING DEPARTMENT Month Ended March 31, 2016 Whole Transfe Direct Conver Units rred In Material sion s Costs UNITS COSTS Transfe Direct Conver Total rred In Material sion Costs s Costs Requirement 1 (continued) THE SAVANNAH SHIRT COMPANY Production Cost ReportSEWING DEPARTMENT Month Ended March 31, 2016 UNITS COSTS Requirement 2 Job Whole Transfe Direct Conver Units rred In Material sion s Costs Transfe Direct Conver Total rred In Material sion Costs s Costs 367 368 369 369 Totals Requirement 3 Requirement 4 Custom Shirts ic Shirts Requirement 5a Totals Requirement 5b Requirement 5c Requirement 5d Requirement 6