Eur 1. Rhiner Corporation is a manufacturer that uses job-order costing. On January 1, the company's inventory balances were as follows: Raw materials $40,000 Work in process $18,000 Finished goods $35,000 . The company applies overhead cost to jobs on the basis of direct labor-hours. For the current year, the company's predetermined overhead rate of $16.25 per direct labor- hour was based on a cost formula that estimated $650,000 of total manufacturing overhead for an estimated activity level of 40,000 direct labor-hours. The following transactions were recorded for the year: I Raw materials were purchased on account, $510,000. Raw materials used in production, $480,000. All of of the raw materials were used as direct materials. The following costs were accrued for employee services: direct labor, $600,000; indirect labor, $150,000; selling and administrative salaries, $240,000. Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods warehousing). $367,000. Incurred various manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $500,000. Manufacturing overhead cost was applied to production. The company actually worked 41,000 direct labor-hours on all jobs during the year. Jobs costing $1,680,000 to manufacture according to their job cost sheets were completed during the year. Jobs were sold on account to customers during the year for a total of $2,800,000. The jobs cost $1,690,000 to manufacture according to their job cost sheets. Dcos BE Paragraph The jobs cost $1,690,000 to manufacture according to their job cost sheets. C 0. Required (Show all work Calculations!) What is the journal entry to record raw materials used in production? b What is the ending balance in Raw Materials? (Show T-Account) What is the joumal entry to record the labor costs incurred during the year? d What is the total amount of manufacturing overhead applied to production during the year? (Show completo calculations) What is the total manufacturing cost added to Work in Process during the year? 1. What is the joumal entry to record the transfer of completed jobs that is referred to in bullet point number 7 above? What is the ending balance in Work in Process? h What is the total amount of actual manufacturing overhead cost incurred during the year? (Show T-Account) 1. Is manufacturing overhead underapplied or overapplied for the year? By how much? i What is the cost of goods available for sale during the year? (Show completo calculations) K What is the joumal entry record the cool of goods sold referred to in bullet point number & above? 1 What is the ending balance in Finished Goods? (Show T-Account) Assuming.that the company closes its underapplied or overapplied overhead to Cost of Goods Sok, what is the adjusted cost of goods sold for the yoar? n What is the gross margin for the year? 0 What is the net operating income for the year? 2 Rbloer Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units) I Sales $20,000 12.000 8.000 Variable expenses Contribution margin Fixed expenses Net operating income 6.000 52 000 Required: (Answer each question independently and always refer to the original data unless instructed otherwise.)(Show all work/calculations. No credit will be given without showing your work and/or calculations.) a. What is the contribution margin per unit? b. What is the contribution margin ratio? c. What is the variable expense ratio? d. If sales increase to 1,001 units, what would be the increase in net operating income? e. If sales decline to 900 units, what would be the net operating income? f. If the selling price increases by $2 per unit and the sales volume decreases by 100 units, what would be the net operating income? g. If the variable cost per unit increases by $1. spending on advertising increases by $1,500, and unit sales increase by 250 units, what would be the net operating income? h. What is the break-even point in unit sales? i. What is the break-even point in dollar sales? j. How many units must be sold to achieve a target profit of $5,000? k. What is the margin of safety in dollars? What is the margin of safety percentage? 1. What is the degree of operating leverage? m. Using the degree of operating leverage, what is the estimated percent increase in net operating income of a 5% increase in sales? n. Assume that the amounts of the company's total variable expenses and total fixed expenses were reversed. In other words, assume that the total variable expenses are $6,000 and the total fixed expenses are $12,000. Under this scenario and assuming that total sales remain the same, what is the degree of operating leverage? o. Using the degree of operating leverage that you computed in the previous question, what is the estimated percent increase in net operating income of a 5% increase in sales? assuming that total sales remain the same, what is the degree of operating leverage? o. Using the degree of operating leverage that you computed in the previous question, what is the estimated percent increase in net operating income of a 5% increase in sales? A template (FA20 Comprehensive Problem 1 Template) in Excel is provided to assist you in completing the assignment. The template provides two worksheets, one for chapter 17 with areas to include journal entries, t-accounts, schedules and an income statement and one for chapter 20 with areas to include a contribution format income statement and formulas for all topics and calculations discussed in the chapter. Using the template is optional and not required to complete the problem although it may help you in doing so. You may modify the template as needed. You may submit the template or not as support for your completed problem but be sure you have labeled all work appropriately. You will be working in the YELLOW areas of the template. E TOUS File Page Layout Formulas Data Review View Help Home Insert X Cut In Copy ~ Format Painter Anal 12 General ' ' A 25 Wrap Text Merge & Center Paste BIV w $ % 8.90 Conditional forme Formatting luble Styles Clipboard Font Number Alignment 020 f K M N D E AAB c 2 Requirement 3 4 Date Accounts and Explanation Debit Credit 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Chapter 17 Chapter 20 a Type here to search O EL Arial 12 - A A 2 Wrap Text General X Cut Format Painter Paste BIU OA Merge & Center $ % 9 % Conditional Format as Formatting Table Sty Styles Clipboard rt Alignment Number 020 X fr D E K M N Total estimated overhead cost Total estimated quantity of the overhead allocation base AB 38 Predetermined 39 Overhead 40 Allocation Rate 41 42 43 44 45 46 47 Raw Materials Inventory Work-in-Process Inventory 48 49 50 51 52 53 Finished Goods Inventory Manufacturing Overhead 54 55 56 57 58 59 80 61 02 63 61 Cost of Goods Sold Chapter 17 Chapter 20 a Tvbe here to search Arial General X Cut Format Painter 12 - A A 23 Wrap Text BIU - BASSE Merge & Center $ % 88 Conditional For Formatting Clipboard 6 Font Alignment 5 Number N Sty 020 X 4AB c D E IG H M 68 Schedule of Cost of Goods Manufactured 69 Month Ended 70 Beginning Work-in-Process Inventory 71 Direct Materials Used 72 Direct Labor 73 Manufacturing Overhead Allocated 74 Total Manufacturing Costs Incurred during the Month 75 Total Manufacturing Costs to Account for 76 Ending Work-in-Process Inventory 77 Cost of Goods Manufactured 78 79 00 81 82 83 84 85 B6 87 88 89 90 91 92 93 94 Income Statement Month Ended Sales Revenue Cost of Goods Sold: Beginning Finished Goods Inventory Cost of Goods Manufactured Cost of Goods Available for Sale Ending Finished Goods Inventory Cost of Goods Sold Before Adjustment Underallocated Overhead Cost of Goods Sold After Adjustment Gross Profit Selling and Administrative Expenses Net Income Chapter 17 Chapter 20 Clipboard Font 134 X I! A B D 1 2. 3 % Per Unit Total Costs 4 5 6 #units Sales Revenue Variable Costs Contribution Margin Fixed Costs Net Operating Income 1 8 9 10 11 12 13 14 Contribution margin per unit Sales price Variable costs 15 16 17 18 19 / Contribution margin ratio Contribution margin Net sales revenue 20 21 22 23 Breakeven sales in units Fixed costs + Target profit Unit Contribution Marain 24 Chapter 17 Chapter 20 File Home Insert View Formulas Data Review Help Page Layout Arial 12 ' General 2 Wiap Ted X Cut Ib Copy Format Painter Clipboard 5 Paste Conditional Format as Formatting Table $ % 8-9 A BIU Merge & Center Nurter Styles Fort Nigament 134 X f K A B C D E 23 Breakeven sales in units Fixed costs + Target profit Unit Contribution Margin 24 25 26 27 / Required sales in dollars Fixed costs + Target profit Contribution Margin Ratio 28 29 30 310 Targeted sales in units Fixed costs + Target profit Unit Contribution Margin 32 33 34 35 36 1 Targeted sales in dollars Fixed costs + Target profit Contribution Margin Ratio 37 38 39 40 41 42 Expected sales Chanter 20 Breakeven Marain of File Home Insert Page Layout Formulas Data Review View Help X Cut Anal General I Copy Paste - A A == 29 Wrap Text QA-EES Merge & Center BIU $ - % Format Painter clipboard F Conditional Format as C Formatting Table Styl Style Foot Alignment Number 134 X fr A B D E H L 43 Expected sales Breakeven sales Margin of safety in units 44 16 17 40 X Margin of safety in units Sales price per - unit Margin of safety in dollars 49 50 51 52 13 54 Degree of operating leverage Contribution margin Operating income 56 57 58 59 30 31 33 31 55 Percent change in operating income Chapter 17 Chapter 20 Operating leverage Percent change in sales revenue 38 Alignment Number Styles 134 B D E G H 4 A 63 61 65 Percent change in operating income 66 67 Operating leverage Percent change in sales revenue X 19 70 Estimated operating income Operating income 1 2 3 (1 + Percent change in operating income) X = 4 5 + Chapter 17 Chapter 20 + Eur 1. Rhiner Corporation is a manufacturer that uses job-order costing. On January 1, the company's inventory balances were as follows: Raw materials $40,000 Work in process $18,000 Finished goods $35,000 . The company applies overhead cost to jobs on the basis of direct labor-hours. For the current year, the company's predetermined overhead rate of $16.25 per direct labor- hour was based on a cost formula that estimated $650,000 of total manufacturing overhead for an estimated activity level of 40,000 direct labor-hours. The following transactions were recorded for the year: I Raw materials were purchased on account, $510,000. Raw materials used in production, $480,000. All of of the raw materials were used as direct materials. The following costs were accrued for employee services: direct labor, $600,000; indirect labor, $150,000; selling and administrative salaries, $240,000. Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods warehousing). $367,000. Incurred various manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $500,000. Manufacturing overhead cost was applied to production. The company actually worked 41,000 direct labor-hours on all jobs during the year. Jobs costing $1,680,000 to manufacture according to their job cost sheets were completed during the year. Jobs were sold on account to customers during the year for a total of $2,800,000. The jobs cost $1,690,000 to manufacture according to their job cost sheets. Dcos BE Paragraph The jobs cost $1,690,000 to manufacture according to their job cost sheets. C 0. Required (Show all work Calculations!) What is the journal entry to record raw materials used in production? b What is the ending balance in Raw Materials? (Show T-Account) What is the joumal entry to record the labor costs incurred during the year? d What is the total amount of manufacturing overhead applied to production during the year? (Show completo calculations) What is the total manufacturing cost added to Work in Process during the year? 1. What is the joumal entry to record the transfer of completed jobs that is referred to in bullet point number 7 above? What is the ending balance in Work in Process? h What is the total amount of actual manufacturing overhead cost incurred during the year? (Show T-Account) 1. Is manufacturing overhead underapplied or overapplied for the year? By how much? i What is the cost of goods available for sale during the year? (Show completo calculations) K What is the joumal entry record the cool of goods sold referred to in bullet point number & above? 1 What is the ending balance in Finished Goods? (Show T-Account) Assuming.that the company closes its underapplied or overapplied overhead to Cost of Goods Sok, what is the adjusted cost of goods sold for the yoar? n What is the gross margin for the year? 0 What is the net operating income for the year? 2 Rbloer Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units) I Sales $20,000 12.000 8.000 Variable expenses Contribution margin Fixed expenses Net operating income 6.000 52 000 Required: (Answer each question independently and always refer to the original data unless instructed otherwise.)(Show all work/calculations. No credit will be given without showing your work and/or calculations.) a. What is the contribution margin per unit? b. What is the contribution margin ratio? c. What is the variable expense ratio? d. If sales increase to 1,001 units, what would be the increase in net operating income? e. If sales decline to 900 units, what would be the net operating income? f. If the selling price increases by $2 per unit and the sales volume decreases by 100 units, what would be the net operating income? g. If the variable cost per unit increases by $1. spending on advertising increases by $1,500, and unit sales increase by 250 units, what would be the net operating income? h. What is the break-even point in unit sales? i. What is the break-even point in dollar sales? j. How many units must be sold to achieve a target profit of $5,000? k. What is the margin of safety in dollars? What is the margin of safety percentage? 1. What is the degree of operating leverage? m. Using the degree of operating leverage, what is the estimated percent increase in net operating income of a 5% increase in sales? n. Assume that the amounts of the company's total variable expenses and total fixed expenses were reversed. In other words, assume that the total variable expenses are $6,000 and the total fixed expenses are $12,000. Under this scenario and assuming that total sales remain the same, what is the degree of operating leverage? o. Using the degree of operating leverage that you computed in the previous question, what is the estimated percent increase in net operating income of a 5% increase in sales? assuming that total sales remain the same, what is the degree of operating leverage? o. Using the degree of operating leverage that you computed in the previous question, what is the estimated percent increase in net operating income of a 5% increase in sales? A template (FA20 Comprehensive Problem 1 Template) in Excel is provided to assist you in completing the assignment. The template provides two worksheets, one for chapter 17 with areas to include journal entries, t-accounts, schedules and an income statement and one for chapter 20 with areas to include a contribution format income statement and formulas for all topics and calculations discussed in the chapter. Using the template is optional and not required to complete the problem although it may help you in doing so. You may modify the template as needed. You may submit the template or not as support for your completed problem but be sure you have labeled all work appropriately. You will be working in the YELLOW areas of the template. E TOUS File Page Layout Formulas Data Review View Help Home Insert X Cut In Copy ~ Format Painter Anal 12 General ' ' A 25 Wrap Text Merge & Center Paste BIV w $ % 8.90 Conditional forme Formatting luble Styles Clipboard Font Number Alignment 020 f K M N D E AAB c 2 Requirement 3 4 Date Accounts and Explanation Debit Credit 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Chapter 17 Chapter 20 a Type here to search O EL Arial 12 - A A 2 Wrap Text General X Cut Format Painter Paste BIU OA Merge & Center $ % 9 % Conditional Format as Formatting Table Sty Styles Clipboard rt Alignment Number 020 X fr D E K M N Total estimated overhead cost Total estimated quantity of the overhead allocation base AB 38 Predetermined 39 Overhead 40 Allocation Rate 41 42 43 44 45 46 47 Raw Materials Inventory Work-in-Process Inventory 48 49 50 51 52 53 Finished Goods Inventory Manufacturing Overhead 54 55 56 57 58 59 80 61 02 63 61 Cost of Goods Sold Chapter 17 Chapter 20 a Tvbe here to search Arial General X Cut Format Painter 12 - A A 23 Wrap Text BIU - BASSE Merge & Center $ % 88 Conditional For Formatting Clipboard 6 Font Alignment 5 Number N Sty 020 X 4AB c D E IG H M 68 Schedule of Cost of Goods Manufactured 69 Month Ended 70 Beginning Work-in-Process Inventory 71 Direct Materials Used 72 Direct Labor 73 Manufacturing Overhead Allocated 74 Total Manufacturing Costs Incurred during the Month 75 Total Manufacturing Costs to Account for 76 Ending Work-in-Process Inventory 77 Cost of Goods Manufactured 78 79 00 81 82 83 84 85 B6 87 88 89 90 91 92 93 94 Income Statement Month Ended Sales Revenue Cost of Goods Sold: Beginning Finished Goods Inventory Cost of Goods Manufactured Cost of Goods Available for Sale Ending Finished Goods Inventory Cost of Goods Sold Before Adjustment Underallocated Overhead Cost of Goods Sold After Adjustment Gross Profit Selling and Administrative Expenses Net Income Chapter 17 Chapter 20 Clipboard Font 134 X I! A B D 1 2. 3 % Per Unit Total Costs 4 5 6 #units Sales Revenue Variable Costs Contribution Margin Fixed Costs Net Operating Income 1 8 9 10 11 12 13 14 Contribution margin per unit Sales price Variable costs 15 16 17 18 19 / Contribution margin ratio Contribution margin Net sales revenue 20 21 22 23 Breakeven sales in units Fixed costs + Target profit Unit Contribution Marain 24 Chapter 17 Chapter 20 File Home Insert View Formulas Data Review Help Page Layout Arial 12 ' General 2 Wiap Ted X Cut Ib Copy Format Painter Clipboard 5 Paste Conditional Format as Formatting Table $ % 8-9 A BIU Merge & Center Nurter Styles Fort Nigament 134 X f K A B C D E 23 Breakeven sales in units Fixed costs + Target profit Unit Contribution Margin 24 25 26 27 / Required sales in dollars Fixed costs + Target profit Contribution Margin Ratio 28 29 30 310 Targeted sales in units Fixed costs + Target profit Unit Contribution Margin 32 33 34 35 36 1 Targeted sales in dollars Fixed costs + Target profit Contribution Margin Ratio 37 38 39 40 41 42 Expected sales Chanter 20 Breakeven Marain of File Home Insert Page Layout Formulas Data Review View Help X Cut Anal General I Copy Paste - A A == 29 Wrap Text QA-EES Merge & Center BIU $ - % Format Painter clipboard F Conditional Format as C Formatting Table Styl Style Foot Alignment Number 134 X fr A B D E H L 43 Expected sales Breakeven sales Margin of safety in units 44 16 17 40 X Margin of safety in units Sales price per - unit Margin of safety in dollars 49 50 51 52 13 54 Degree of operating leverage Contribution margin Operating income 56 57 58 59 30 31 33 31 55 Percent change in operating income Chapter 17 Chapter 20 Operating leverage Percent change in sales revenue 38 Alignment Number Styles 134 B D E G H 4 A 63 61 65 Percent change in operating income 66 67 Operating leverage Percent change in sales revenue X 19 70 Estimated operating income Operating income 1 2 3 (1 + Percent change in operating income) X = 4 5 + Chapter 17 Chapter 20 +