Lynch Company manufactures and sells a single product. The following costs were incurred during the company's first year of operations: Variable costs per uniti Manufacturing Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Pixed selling and administrative 10 4 1 1 $ $231,000 $141.000 During the year, the company produced 21,000 units and sold 17,000 units. The selling price of the company's product is $40 per unit. Required: 1. Assume that the company uses absorption costing: a. Compute the unit product cost. b. Prepare an income statement for the year. 2. Assume that the company uses variable costing: a. Compute the unit product cost. b. Prepare an income statement for the year. Ida Sidha Karya Company is a family-owned company located on the island of Ball in Indonesia. The company produces a handcrafted Balinese musical Instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $870. Selected data for the company's operations last year follow: 0 260 230 30 Units in beginning inventory Units produced Units sold Units in ending inventory Variable conta per uniti Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Tixed cost Fixed manufacturing overhead Fixed selling and administrative 105 325 45 15 $ $ 65,000 $ 21.000 The absorption costing income statement prepared by the company's accountant for last year appears below: Sales Cost of goods sold Gross margin Selling and administrative expense Not operating income S200, 100 166/1750 33, 350 24,650 S 0,900 Required: 1. Under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of last year? 2. Prepare an income statement for last year using variable costing. What is the amount of the difference in net operating Income between the two costing methods? Royal Lawncare Company produces and sells two packaged products-Weedban and Greengrow. Revenue and cost Information relating to the products follow: Selling price per unit Variable expenses per unit Traceable tixed expenses per year Product Weedban Greengrow $ 9.00 5 35.00 $ 2.70 $10.00 $ 138,000 $ 46,000 Common fixed expenses in the company total $102,000 annually. Last year the company produced and sold 43,500 units of Weedban and 19,500 units of Greengrow. Raner, Harris & Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two offices-one in Chicago and one in Minneapolis. The firm classifies the direct costs of consulting jobs as variable costs. A contribution format segmented income statement for the company's most recent year is given Assume that Minneapolis' sales by mejor market are: Salo Variable expensen Contribution margin Traceable Eixed expenses Market segment margin Common fixed expenses not traceable to marketa offien segment margin Minneapolis Medical Dental 3690,000 1001 $460,000 1001 $230,000 1001 414000 CON 299.000 651 115.000 sos 276.000 404 261.000 350 115,000 500 82.800 12 23.000 50 55.000 260 193,200 284 5138,000 301 $ 55,200 248 20.700 $172,500 18 251 The company would like to initiate an intensive advertising campaign in one of the two market segments during the month. The campaign would cost $9,200. Marketing studies indicate that such a campaign would increase sales in the Medical market by $80.500 or increase soles in the Dental market by $69.000 Required: 1. How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Medical Market 2. How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Dental Market? 3. In which of the markets would you recommend that the company focus its advertising campaign? (7-5) Piedmont Company segments its business into two regions-North and South. The company prepared the contribution format segmented income statement as shown Sales Variable expenses Contribution margin Traceable fixed expenses Segment margin Common fixed expenses Net operating income Total Company $750,000 510,000 240,000 120,000 112,000 54.000 $ 58,000 North # 600,000 410,000 120.000 64,000 $ 56,000 South $150,000 30,000 120,000 64.000 556.000 Required: 1. Compute the companywide break-even point in dollar sales. 2. Compute the break-even point in dollar sales for the North region 3. Compute the break-even point in dollar sales for the South region