Question
Juicy Lemonade Company The Juicy Lemonade Company manufactures premium flavored organic lemonade. Management is ready to close the books for the end of the first
Juicy Lemonade Company
The Juicy Lemonade Company manufactures premium flavored organic lemonade. Management is ready to close the books for the end of the first quarter in 2019 and your supervisor has presented you with the following information.
A) Total sales in gallons of flavored lemonade for January 2019 through March 2019 are as follows:
January 10,000
February 12,000
March 14,000
Each gallon of lemonade is packaged in eight 16 ounce bottles and sold in a case that sells for $15.00 per case. The company produced 37,500 units during the first quarter of 2019.
B) The companys Variable Costs include the following
Direct Materials of $3.25 per gallon
Direct Labor of $____ per gallon (Each gallon of lemonade requires 15 minutes of direct labor time and the wage rate is $8 per hour)
Variable MOH $_____per gallon (The variable overhead rate is $2.00 per machine hour and processing one gallon of lemonade takes 45 minutes of machine time)
Variable Selling and Administrative costs of $1.25 per gallon
C) The companys Fixed Costs for the quarter include the following:
Manufacturing Overhead $37,500
Selling and Administrative $26,900
The companys fixed manufacturing overhead per gallon is $______. (The Fixed Manufacturing Overhead rate is based on Fixed Costs for the quarter and the units produced for the quarter.)
D) The companys manufacturing overhead is applied based on the number of gallons produced using the Variable Manufacturing Overhead Rate per gallon calculated in b and the Fixed Manufacturing Overhead Rate per gallon calculated in c.
E) Raw Materials Inventory consists entirely of direct materials and, at the beginning of the year, consists of 700 units of direct material at a cost of $3.25 per unit. The company purchased 38,000 units of direct material at a cost of $3.25 per unit. Each gallon of lemonade requires one unit of direct materials.
F) Beginning Work in process inventory consists of 500 gallons of partially processed lemonade. All raw materials are added at the beginning of the production process and these partially completed units are 60% complete with respect to conversion costs. Ending work in process consists of 800 gallons of partially processed lemonade that are 40% complete with respect to conversion costs. The company completed and transferred out 37,500 units this quarter.
The beginning work in process and current period costs are as follows
Beginning WIP
Direct Materials $1,625
Conversion Costs $450
Current period Costs
Direct Materials $129,675
Conversion Costs $168,750
G) There are 300 gallons of lemonade in Finished Goods Inventory at the beginning of the year carried at a cost of $7.75. There are 1,800 gallons in ending Finished Goods Inventory carried at a cost of $7.75 per unit.
You are required to prepare all of the following:
A Production Cost Report using both the weighted average and FIFO methods of assigning costs to goods transferred out and ending inventory.
Schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold using both methods of assigning costs to goods transferred out and ending inventory.
Gross Margin and Contribution Margin Income Statements (HINT: For the Gross Margin Income Statement, Total Cost of Goods Sold should be equal to the Cost of Goods Sold calculated based on the FIFO method of assigning costs to goods transferred out and ending inventory).
A Break-Even Analysis that includes all of the following components (HINT: Use the information in parts a, b, and c for your calculations)
Break-Even in gallons and dollars
Target Profit in gallons and dollars if the company wants a net operating income of $250,000 after taxes. The tax rate is 20%.
Margin of Safety expressed in dollars, units, and as a percentage of sales
(I need an answer for this ASAP) (this is due by Saturday 4/22 at 10am)
Please help me and make sure the answers are right
Please show all of the calculations on how to get each number
This problem is in cost accounting
Attached below this are the templates for all of the required statements
attached below areas to put the correct numbers for calculations to make it easier in excel (ignore the yellow highlight)
Production Cost Report Weighted Average Method Equivalent units or production Unit Started in production Started \& completed Ending WIP Costs to be accounted for Costs in beginning WIP $ Current period costs Total costs to be accounted for $ Costs per equivalent unit Total Materials Conversion Cost per equivalent unit $ Costs accounted for Costs assigned to units transferred out Costs assigned to WIP ending inventory Total Costs accounted for S Juicy Lemonade Production Cost Report FIFO Method Cost assigned to units transferred out cost from prior period Current cost added to completed beg. WIP. Current cost of units started \& completed Total costs transferred out Cost of ending WIP inventory Total costs accounted for Juicy Lemonade Cost of Goods Manufactured Statement For the Quarter Ended March, 31, 2019 (Weighted Average) Beginning Work In Process $Beg(WIP) Total Manufacturing Costs Direct Materials Total Work in Process during the Year Less: Ending Work in Process Eding From sheet 1WA (rounded) Cost of Goods Manufactured $ Juicy Lemonade Cost of Goods Sold Statement For the Quarter Ended March 31, 2019 (Weighted Average) eginning Finished Goods Inventory $ Part-g dd: Cost of Goods Manufactured cost of Goods Available for Sale ess: Ending Finished Goods Inventory Part g Cost of Goods Sold $ Juicy Lemonade Cost of Goods Manufactured Statement For the Quarter Ended March 31, 2019 (FIFO) Beginning Work In Process $ Beg (WIP) Total Manufacturing Costs Direct Materials Total Work in Process during the Year Less: Ending Work in Process Eding From sheet 1WA (rounded) Cost of Goods Manufactured $ Juicy Lemonade Cost of Goods Sold Statement For the Quarter Ended March 31, 2019 (FIFO) Beginning Finished Goods Inventory $ Part-g Add: Cost of Goods Manufactured Cost of Goods Available for Sale Less: Ending Finished Goods Inventory Part g Cost of Goods Sold Juicy Lemonade Gross Margin Income Statement Unit Cost from notes For the Quarter Ended March 31, 2019 Revenue Part a Cost of Goods Sold Variable Manufacturing Costs Computed in notes D18 Fixed Manufacturing Costs (compute in notes E25) Gross Margin Marketing \& Administrative Costs Variable Marketing \& Admin. Given Fixed Marketing \& Admin Net Operating Income Juicy Lemonade Contribution Margin Income Statement For the Quarter Ended March 31, 2019 Revenue Part 1 Variable Costs Variable Manufacturing Costs Computed in notes D18 Variable Marketing \& Admin. Given Contribution Margin Fixed Costs Fixed Manufacturing Costs (compute in notes E25) Fixed Marketing \& Admin Net Operating Income % of sales - margin of safety percentage = margin of safety volum/sales volume c. Margin of Safety units Margin of Safety Percentage percentage dollars dollars a. Break even volume in units X=F/(PV) Break even volume in sales dollars Contribution margin ratio unit contribution margin/sales per per unit Break even dollars = fixed costs/contribution margin ratio Target Profit \& taxes target volume (units) = fixed costs + [target profit/(1-t)]/unit contribution margin target volume (dollars)= need to find equation or derive fixed costs + [target profit/(1- t)/contribution margin ratio target volume (units) = fixed costs + [target profit /(1t)]/ unit contribution margin target volume (dollars)= need to find equation or derive fixed costs + [target profit/(1t)/contribution margin ratio Margin of safety dollars sales dollars - break even volume dollars units - Sales Volume - Break even volume % of sales - margin of safety percentage = margin of safety volum/sales volume \begin{tabular}{|l|r|} \hline January & 10,000 \\ \hline February & 12,000 \\ \hline March & 14,000 \\ \cline { 2 - 2 } & 36,000 \\ \hline \end{tabular} one gallon goes into 816 oz bottle and sold in a case for $15, so one gallon equals $15 816 gallon sales price company produceds 37,500 units in first quarter \begin{tabular}{|l|r|r|r|r|r|} \hline & & & Minutes & per hours \\ \hline Direct Materials & $ & 3.25 & gallon & & \\ \hline Direct Labor & $ & 2.00 gallon & 15 & 8 \\ \hline Variable MOH & $ & 1.5 gallon & 45 & \\ \hline Direct cost & & & \\ \hline Selling and administrative cost & $ & 1.25 & gallon & \\ \hline Total variable cost & & & \\ \hline Contribution per margin & & & \\ \hline Contribution margin ratio & & & \\ \hline \end{tabular}
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