Midterm - 1. Short Answer Direct Materials: Beginning raw...

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1. Short Answer Direct Materials: Beginning raw materials inventory: 70,000 +Purchases of raw materials: 170,000 Raw Materials available for use: 240,000 - Ending raw materials inventory: 80,000 Raw materials used in production: 160,000 Direct Labor: 210,000 Manufacturing Overhead: 200,000 Total Manufacturing Costs: 570,000 +Beginning work in progress inventory: 30,000 -Ending work in progress inventory: 20,000 Cost of Goods Manufactured: $580,000 2. Essay Units Complete: 280,000 Units in ending inventory: 55,000 Equivalent Units: 335,000 Transferred = 280,000 Units Equivalent = Materials: 55,000 x .75 = 41,250 Conversion: 55,000 x .65 = 35,750 Equivalent Units: Materials: 280,000+41,250 = 69,250 Conversion: 280,000+35,750 = 63,750 3. a. Contribution Margin per Unit = Unit Price - Variable Costs Unit Price = 650,000/26,000 = 25 Variable Costs = 442,000/26,000 = 17 Contribution Margin Per Unit = $8 b. a. Contribution Margin per Unit = Unit Price - Variable Costs Unit Price = 650,000/26,000 = 25 Variable Costs = 442,000/26,000 = 17 Contribution Margin Per Unit = $8 b. Break-even Point in dollars = (total fixed costs + target profit) / contribution margin ratio contribution margin ratio = contribution margin/revenue total fixed costs = 234,000 target profit = 0
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contribution margin ration = 208,000/650,000 = 3.2 break-even point = (234,000+0) / 3.2 = $73,125 c. Desired Net Income: 20,000 (total fixed costs + target income) / contribution margin per unit (234,000 + 20,000) / 8 = 31,750 units 4. a. Unit Product Cost Variable = direct materials + direct labor + variable manufacturing overhead Absorption = DM + DL + var. man. ov. + fixed manufactuing overhead Variable Unit Product Cost = 190 + 40 + 25 = 255 Absorption Unit Product Cost= 190+40+25+ (250,000/20,000) = 267.50 b. Absorption Income Statement: Sales (350 x 19000) = 6,650,000 -Varibale Expenses Beginning Inventory = 0 COGM = 5,350,000 -End Balance = 267,500 GM = 1,567,500 -Selling and Admin Costs [(20x19000) +225000] = 605,000 Net Income 962,500 Notes: COGM = variable cost x units produces + fixed costs variable costs = 190+40+25 = 255 COGM = (255x19000) +250000 = 5,350,000 Ending Balance = units left x variable cost + fixed cost 1000 x 255 + [(250000 / 20000) x 1000] = 267500 c. Variable Income Statement Sales = 6,650,000 -Variable Expenses Beginning Inventory = 0 Variable COGS = 255x19000 = 4,845,000 Variable Selling and Admin 380,000 CM = 1,425,000 -Fixed expenses Fixed Manufacturing Overhead =250,000 Fixed selling and admin cost = 225,000 Net Income 950,000 1. Question: (TCO A) Wages paid to a timekeeper in a factory are a:
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Your Answer: Prime Cost YES. ....Conversion Cost NO Prime Cost YES. ....Conversion Cost YES Prime Cost NO. ...Conversion Cost NO Prime Cost NO. ....Conversion Cost YES CORRECT Instructor Explanation: Chapter 2 Points Received: 6 of 6 2. Question: (TCO A) A cost incurred in the past that is not relevant to any current decision is classified as a(n): Your Answer: period cost. opportunity cost.
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This note was uploaded on 03/26/2012 for the course AC505 AC505 taught by Professor Dillan during the Spring '10 term at Keller Graduate School of Management.

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Midterm - 1. Short Answer Direct Materials: Beginning raw...

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