managerial accounting exercises
Franciscan Ltd. has provided the following contribution format income statement. Ober Corporation, which has only one product, has provided the following data All questions concern situations that are within the relevant range. concerning its most recent month of operations: Sales (3,000 units) $150,000 Variable expenses 90,000 Selling price $ 120 Contribution margin 60,000 Units in beginning inventory 0 Fixed expenses 48,000 Units produced 8,900 Net operating income $12,000 Units sold 8,400 Units in ending inventory 00 Required: Variable costs per unit: Direct materials a. What is the contribution margin per unit? Direct labor 36 b. What is the contribution margin ratio? Variable manufacturing overhead c. If sales increase to 3,050 units, what would be the amount of increase in net Variable selling and administrative expense operating income? Fixed costs: d. If the variable cost per unit increases by $5, spending on advertising increases Fixed manufacturing overhead $ 151,300 by $3,000, and unit sales increase by 450 units, what would be the estimated net Fixed selling and administrative expense $ 109,200 operating income? e. What is the break-even point in unit sales? f. What is the break-even point in dollar sales? g. Estimate how many units must be sold to achieve a target profit of $54,000. Required: h. What is the margin of safety in dollars? i. What is the margin of safety percentage? a. Calculate the unit product cost under variable costing. j. What is the degree of operating leverage? b. Prepare a contribution format income statement for the month using variable k. Using the degree of operating leverage, what is the estimated percent increase costing. in net operating income of a 15% increase in sales? c. Calculate the unit product cost under absorption costing. d. Prepare an income statement for the month using absorption costing.Craney Corporation makes one product and it provided the following information Groleau Corporation has an activity-based costing system with three activity cost to help prepare the master budget for the next four months of operations: pools--Processing, Setting Up, and Other. The company's overhead costs, which consist of factory utilities and indirect labor, are allocated to the cost pools in The budgeted selling price per unit is $87. proportion to the activity cost pools' consumption of resources. Costs in the Processing cost pool are assigned to products based on machine-hours (MHs) and Budgeted unit sales for January, February, March, and April are 7, 100, 8,300, costs in the Setting Up cost pool are assigned to products based on the number of 13,700, and 13,600 units, respectively. batches. Costs in the Other cost pool are not assigned to products. Data concerning All sales are on credit. the two products and the company's costs and activity-based costing system appear The credit sales are collected as follows: 20% in the month of the sale and 80% below: in the following month. . Craney wants the ending finished goods inventory to equal 40% of the Factory utilities (total) $ 24,000 following month's unit sales. Indirect labor (total) $ 3,000 . Craney wants the ending direct materials inventory to equal 40% of the following month's direct materials production needs. Distribution of Resource Consumption Across Activity Cost Pools: Each unit of finished goods requires 5 pounds of material. Processing Setting Up Other The raw materials cost $1.00 per pound. Factory utilities 30% 40% 30% Regarding raw materials purchases, 30% are paid for in the month of purchase Indirect labor 10% 40% 50% and 70% in the following month. Each unit of finished goods requires 2.7 direct labor-hours. MHs Batches The direct labor wage rate is $19.00 per hour. Product S8 2,200 700 Product F1 7,800 300 Required: Total 10,000 1,000 a. What are the budgeted sales for February? b. What are the expected cash collections for February? Product S8 Product F1 c. According to the production budget, how many units should be produced in Sales (total) $ 64,000 $ 68,700 February? Direct materials (total) $28,000 $ 19,800 d. If 68,300 pounds of direct materials are needed for production in March, how Direct labor (total) $ 25,300 $ 36,700 many pounds of direct materials should be purchased in February? e. What is the estimated cost of direct materials purchases for February? Required: f. If the cost of direct material purchases in January is $43,660, then in February what are the estimated cash disbursements for direct materials purchases? a. Assign overhead costs to activity cost pools using activity-based costing. g. What is the total estimated direct labor cost for February? b. Calculate activity rates for each activity cost pool using activity-based costing. c. Determine the amount of overhead cost that would be assigned to each product using activity-based costing. d. Calculate the product margins for each product using activity-based costing
