Part 5-6-7:

Part 5Inventory Schedules and Cost of Goods Sold(20 points)

EmilyAnne Company has the following information:

Direct Labor$80,000

Beginning Finished goods inventory$10,000

Ending Finished goods inventory$40,000

Manufacturing Overhead Applied$90,000

Raw [direct] Materials Used in Production$ 50,000

Beginning Work in Process Inventory$ 30,000

Ending Work in Process inventory$ 72,000

OVERapplied Manufacturing Overhead$8,000

Required

IN GOOD FORM, complete the partial "Inventory Schedules and Cost of Goods Sold" statement shown below.Place the above items in the proper places on the statement.

EmilyAnne Company

Inventory Schedules and Cost of Goods Sold

Beginning Work-In-Process Inventory$30,000

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Cost of Goods Manufactured

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Unadjusted Cost of Goods Sold

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Cost of Goods Sold

Part 6 Absorption versus Variable Costing (20 points)

Beau Company presents the following aggregate information:

Total sales$500,000

Variable Cost of Sales250,000

Fixed Costs included in Cost of Sales50,000

Variable Selling and Administrative Costs30,000

Fixed Selling and Administrative Costs40,000

Required

1.In good form, prepare Income statements under both the Absorption Costing and Variable Costingapproached. [Partial setup shown below]

2.Answer about the impact of releasing fixed manufacturing costs from inventory shown below.

Beau Company

Income StatementAbsorption Costing Approach

SALES$500,000

Beau Company

Income StatementVariable Costing Approach

SALES$500,000

Requirement #2.

A company uses the Absorption Costing method.Finished Goods Inventory decreases during the period.$2,000 of fixed manufacturing overhead was included in the inventory.This will result in

Income under Absorption costing to be______than Income under Variable Costing:

A.SMALLERBThe SAMEC GREATER[put letter [word]on your answer sheet ]

Part 7Company wide and Segment Break-even analysis (15 points)

Buttons Company has two segments: East and West.Consider the company contribution margin income statements:

Total CompanyEast SegmentWest Segment

Sales$1,000,000$600,000$400,000

Variable Expenses600,000330,000270,000

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Contribution margin400,000270,000130,000

Traceable fixed expenses100,00060,00040,000

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Segment margin300,000210,00090,000

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Common fixed expenses140,000

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Net operating income$160,000

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Required:

1.Compute the company wide break-even point in dollar sales.SHOW WORK or you may lose

points.

2.Compute the break-even point in dollar sales for the East region. SHOW WORK or you may lose

points.

NOTE Do not compute the breakeven point for the WEST region.SAVE TIME!

#1.Company wide

#2.East Region