Solutions to Practice Midterm.pdf - 1 Variable cost per...

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1. Variable cost per X‐ray = (29,000 – 17,000) / (7,000 – 3,000) = $3 Total cost at 3,000 X‐rays = 17,000 Total fixed cost = Total cost – Total variable cost = 17,000 – (3*3,000) = 8,000 2. Variable cost per unit = v = 20 + 10 = $30 p=$50 Target quantity = (TFC + Target NOI) / (p‐v) Target quantity = (80,000 + 100,000) / (50‐30) = 9,000 units 3. Total setup cost allocated to B = ($240,000/120 setups)*40 setups = $80,000 Total gen. factory cost allocated to B = ($600,000/20,000 DLHs)*10,000 DLHs = $300,000 Total machine processing cost allocated to B = ($120,000/3,000 MHs)*1,000 MHs = $40,000 Total OH allocated to B = $80,000 + $300,000 + $40,000 = 420,000 Applied OH per unit for B = $420,000 / 10,000 units = $42 Unit product cost for B = 60 (for DM) + 36 (for DL) + 42 (for OH) = $138 4. BE sales dollars = TFC/CM ratio NOI = Total CM – TFC TFC = Total CM ‐ NOI TFC = 160,000 – (‐40,000) = 200,000 CM ratio = Total CM / Total sales = 160,000 / 640,000 = 0.25 BE sales dollars = 200,000 / 0.25 = 800,000 5. DM = RM(begin) + RM purchases – RM(end) = 34K + 66K – 37K = 63K DL = 38K Applied OH = 70K Total mfg costs = DM+DL+ Applied OH = 171K COGM = WIP(begin) + Total mfg costs – WIP (end) = 11K+171K‐23K = 159K Unadjusted COGS = FG(begin) + COGM – FG (end) = 31K+159K‐56K = 134K 6. a. Manufacturing OH is credited when manufacturing OH is applied b. Job cost sheets accumulate applied OH

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