HW 6 1 Saved Help Save 7 points Print References Carlos Cavalas, the manager of Echo Products' Brazilian Division, is trying to set the production schedule for the last quarter of the year. The Brazilian Division had planned to sell 68,750 units during the year, but by September 30 only the following activity had been reported: Inventory, January 1 Production Sales Inventory, September 30 1 Units 71,800 62,500 9,300 The division can rent warehouse space to store up to 29,900 units. The minimum inventory level that the division should carry is 2,800 units. Mr. Cavalas is aware that production must be at least 5,580 units per quarter in order to retain a nucleus of key employees. Maximum production capacity is 44,200 units per quarter. Demand has been soft, and the sales forecast for the last quarter is only 20,000 units. Due to the nature of the division's operations. fixed manufacturing overhead is a major element of product cost. Required: 1a. Assume that the division is using variable costing. How many units should be scheduled for production during the last quarter of the year? 1b. Assume that the division is using variable costing. Will the number of units scheduled for production affect the division's reported income or loss for the year? 2. Assume that the division is using absorption costing and that the divisional manager is given an annual bonus based on divisional operating income. If Mr. Cavalas wants to maximize his division's operating income for the year, how many units should be scheduled for production during the last quarter? 2 Vulcan Company's contribution format income statement for June is as follows: Vulcan Company Income Statement For the Month Ended June 30 4 poets Sales Variable expenses Contribution margin Fixed expenses Net operating income P $900,000 400,000 500,000 475,000 $25,000 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 a The company is divided into two sales territories-Northern and Southern. The Northern Territory recorded $400,000 in sales and $160,000 in variable expenses during June; the remaining sales and variable expenses were recorded in the Southern Territory Fixed expenses of $176,000 and $140,000 are traceable to the Northern and Southern Territories, respectively. The rest of the fixed expenses are common to the two territories. b. The company is the exclusive distributor for two products-Paks and Tibs. Sales of Paks and Tibs totaled $140,000 and $260,000. respectively, in the Northern territory during June. Variable expenses are 27% of the selling price for Paks and 47% for Tibs. Cost records show that $67,200 of the Northern Territory's fixed expenses are traceable to Paks and $57,200 to Tibs, with the remainder common to the two products. Required: 1-a. Prepare contribution format segmented income statements for the total company broken down between sales territories. 1-b. Prepare contribution format segmented income statements for the Northern Territory broken down by product line. Complete this question by entering your answers in the tabs below. Mc Graw < Prev 2 of 5 Next > 4 points 1-a. Prepare contribution format segmented income statements for the 1-b. Prepare contribution format segmented income statements for the Northern Territory broken down by product line. Complete this question by entering your answers in the tabs below. ellock Req 1A Req 1B Print References Prepare contribution format segmented income statements for the total company broken down between sales territories. (Round the) percentage answers to one decimal place (i.e .1234 should be entered as 12.3).) Mc Sales Territory Total Company Amount Northern Southern % Amount % Amount % A Req 18 > 4 points Complete this question by entering your answers in the tabs below. eBook Req 1A Req 1B Print References Prepare contribution format segmented income statements for the Northern Territory broken down by product line. (Round the p answers to one decimal place (i.e 1234 should be entered as 12.3).) Product Line Northern Territory Paks Tibs Amount % Amount % Amount % HW 6 3 Whitman Company has just completed its first year of operations. The company's absorption costing income statement for the year follows: 3 points Whitman Company Income Statement Sales (42,000 units $41.10 per unit) Cost of goods sold (42,000 units x $21 per unit) Gross margin eflook Selling and administrative expenses Hrit Net operating income Print $ 1,726,200 882,000 844,200 483,000 $ 361,200 The company's selling and administrative expenses consist of $315,000 per year in fixed expenses and $4 per unit sold in variable expenses. The $21 unit product cost given above is computed as follows: Direct materials $9 Direct labor Variable manufacturing overhead 3 Fixed manufacturing overhead ($270,000 +54,000 units) Absorption costing unit product cost $21 Required: 1. Redo the company's income statement in the contribution format using variable costing. 2. Reconcile any difference between the net operating income on your variable costing income statement and the net operating income on the absorption costing income statement above. the tahe helow 4 Part 1 of 2 3 points eflook Print References Required information [The following information applies to the questions displayed below] Chuck Wagon Grills, Incorporated, makes a single product-a handmade specialty barbecue grill that it sells for $210. Data for last year's operations follow: Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit Fixed costs: Fixed manufacturing overhead Fixed selling and administrative Total fixed costs 24,000 21,000 3,000 $ 50 80 20 10 $ 160 $840,000 315,000 $ 1,155,000 Required: 1. Assume that the company uses variable costing. Compute the unit product cost for one barbecue grill.. 2. Assume that the company uses variable costing. Prepare a contribution format income statement for last year. 3. What is the company's break-even point in terms of the number of barbecue grills sold? HW 6 Seved 5 Part 2 of 2 3 points eBook Print References Required i [The following information applies to the questions displayed below.] Chuck Wagon Grills, Incorporated, makes a single product-a handmade specialty barbecue grill that it sells for $210. Data for last year's operations follow Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit Fixed costs: Fixed manufacturing overhead Fixed selling and administrative Total fixed costs 24,000 21,000 3,000 $ 50 80 20 10 $160 $840,000 315,000 $ 1,155,000 Required: 1. Assume that the company uses absorption costing. Compute the unit product cost for one barbecue grill. 2. Assume that the company uses absorption costing. Prepare an income statement for last year. Help Sa opped Book Pri ferences Carlos Cavalas, the manager of Echo Products' Brazilian Division, is trying to set the production schedule for the last quarter of the year. The Brazilian Division had planned to sell 68,750 units during the year, but by September 30 only the following activity had been reported: Inventory, January 1 Production Sales Inventory, September 38 Units B 71,800 62,500 9,300 The division can rent warehouse space to store up to 29,900 units. The minimum inventory level that the division should carry is 2,800 units. Mr. Cavalas is aware that production must be at least 5,580 units per quarter in order to retain a nucleus of key employees. Maximum production capacity is 44,200 units per quarter. Demand has been soft, and the sales forecast for the last quarter is only 20,000 units. Due to the nature of the division's operations, fixed manufacturing overhead is a major element of product cost Required: 1a. Assume that the division is using variable costing. How many units should be scheduled for production during the last quarter of the year? 1b. Assume that the division is using variable costing. Will the number of units scheduled for production affect the division's reported income or loss for the year? 2. Assume that the division is using absorption costing and that the divisional manager is given an annual bonus based on divisional operating income. If Mr. Cavalas wants to maximize his division's operating income for the year, how many units should be scheduled for production during the last quarter? 2 Vulcan Company's contribution format income statement for June is as follows: Vulcan Company Incone Statement For the Month Ended June 30 nts Sales Variable expenses Skipped Contribution margin Fixed expenses eBook Print References Net operating income $ 900,000 400,000 500,000 475,000 $ 25,000 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: a. The company is divided into two sales territories-Northern and Southern. The Northern Territory recorded $400,000 in sales and $160,000 in variable expenses during June; the remaining sales and variable expenses were recorded in the Southern Territory. Fixed expenses of $176,000 and $140,000 are traceable to the Northern and Southern Territories, respectively. The rest of the fixed expenses are common to the two territories. b. The company is the exclusive distributor for two products-Paks and Tibs. Sales of Paks and Tibs totaled $140,000 and $260,000, respectively, in the Northern territory during June. Variable expenses are 27% of the selling price for Paks and 47% for Tibs. Cost records show that $67,200 of the Northern Territory's fixed expenses are traceable to Paks and $57,200 to Tibs, with the remainder common to the two products. Required: 1-a. Prepare contribution format segmented income statements for the total company broken down between sales territories.. 1-b. Prepare contribution format segmented income statements for the Northern Territory broken down by product line. Whitman Company has just completed its first year of operations. The company's absorption costing income statement for the year follows: Whitman Company Income Statement pped Book Hint Print erences Sales (42,000 units x $41.10 per unit) Cost of goods sold (42,000 units x $21 per unit). Gross margin Selling and administrative expenses Net operating income $ 1,726,200 882,000 844,200 483,000 $ 361,200 The company's selling and administrative expenses consist of $315,000 per year in fixed expenses and $4 per unit sold in variable expenses. The $21 unit product cost given above is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($270,000 54,000 units) Absorption costing unit product cost Required: $21 1. Redo the company's income statement in the contribution format using variable costing. 2. Reconcile any difference between the net operating income on your variable costing income statement and the net operating income on the absorption costing income statement above. A 11 of 2 nts Skipped eBook Print References Required information [The following information applies to the questions displayed below.] Chuck Wagon Grills, Incorporated, makes a single product-a handmade specialty barbecue grill that it sells for $210. Data for last year's operations follow: Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit Fixed costs: Fixed manufacturing overhead Fixed selling and administrative Total fixed costs 24,000 21,000 3,000 $ 50 80 20 10 $160 $840,000 315,000 $ 1,155,000 Required: 1. Assume that the company uses variable costing. Compute the unit product cost for one barbecue grill. 2. Assume that the company uses variable costing. Prepare a contribution format income statement for last year. 3. What is the company's break-even point in terms of the number of barbecue grills sold? 5 art 2 of 2 oints Skipped eBook Print References Required information [The following information applies to the questions displayed below.] Chuck Wagon Grills, Incorporated, makes a single product-a handmade specialty barbecue grill that it sells for $210. Data for last year's operations follow: Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit Fixed costs: Fixed manufacturing overhead. Fixed selling and administrative Total fixed costs 0 24,000 21,000 3,000 $ 50 80 20 10 $ 160 $840,000 315,000 $ 1,155,000. Required: 1. Assume that the company uses absorption costing. Compute the unit product cost for one barbecue grill. 2. Assume that the company uses absorption costing. Prepare an income statement for last year