Question
In: Accounting
1. Andrew Clark's shoe company has the following information: Selling price per pair of shoes: $100...
1.
Andrew Clark's shoe company has the following information:
Selling price per pair of shoes: $100
Direct materials per pair of shoes: $30
Direct labor per pair of shoes: $20
Variable Selling expense per pair of shoes: $5
Variable overhead per pair of shoes: $10
Fixed overhead per month: $10,000
Fixed Selling expenses per month: $20,000 I
n January, 2,000 pairs of shoes were produced and 1,800 pairs of shoes were sold.
Using variable contribution margin costing, what is the contribution margin for January?
Group of answer choices
$81,000
$63,000
$70,000
$72,000
Using absorption costing, what is the gross margin for January?
Group of answer choices
$63,000
$62,010
$54,000
$36,000
2.
Brat Pack books has the following financial information for the month of October:
Direct labor per book: $3
Direct material per book: $2
Manufacturing overhead per book: $1
Variable selling expense per book: $0.50
Fixed Manufacturing overhead: $5,000
Fixed selling expenses: $2,000
If there were 4,000 books produced and sold in October, what is the variable cost per book using the contribution margin method?
Group of answer choices
$5.00
$7.25
$6.00
$6.50
If there were 4,000 books produced and sold in October, what is the cost of goods sold per book using the absorption costing method?
Group of answer choices
$6.25
$5.00
$6.50
$7.25
3.
Reynolds Corp has the following information:
Selling price: $15 per unit
Direct labor: $4 per unit
Direct materials: $2 per unit
Fixed Manufacturing Expense: $50,000
What is their breakeven point?
Group of answer choices
8,334 Units
3,334 Units
5,000 Units
5,556 Units
Solutions
Expert Solution
| 1) | ||||||
| a) | Using variable contribution margin costing, what is the contribution margin for January? | |||||
| Direct Material Cost per unit | $ 30.00 | |||||
| Direct Labor cost per unit | $ 20.00 | |||||
| Variable manu. OH cost per unit | $ 10.00 | |||||
| Variable selling expense per unit | $ 5.00 | |||||
| $ 65.00 | ||||||
| Contribution Margin | ||||||
| ($ 100 - $ 65) x 1800 = | $ 63,000.00 | |||||
| b) | Using absorption costing, what is the gross margin for January? | |||||
| Direct Material Cost per unit | $ 30.00 | |||||
| Direct Labor cost per unit | $ 20.00 | |||||
| Variable manu. OH cost per unit | $ 10.00 | |||||
| Fixed manu. OH cost per unit | $ 5.00 | ($ 10000 / 2000) | ||||
| $ 65.00 | ||||||
| Gross Margin | ||||||
| ($ 100 - $ 65) x 1800 = | $ 63,000.00 | |||||
| 2) | ||||||
| a) | If there were 4,000 books produced and sold in October, | |||||
| what is the variable cost per book using the contribution margin method? | ||||||
| Direct Material Cost per unit | $ 2.00 | |||||
| Direct Labor cost per unit | $ 3.00 | |||||
| Variable manu. OH cost per unit | $ 1.00 | |||||
| Variable selling expense per unit | $ 0.50 | |||||
| $ 6.50 | ||||||
| b) | If there were 4,000 books produced and sold in October, | |||||
| what is the cost of goods sold per book using the absorption costing method? | ||||||
| Direct Material Cost per unit | $ 2.00 | |||||
| Direct Labor cost per unit | $ 3.00 | |||||
| Variable manu. OH cost per unit | $ 1.00 | |||||
| Fixed manu. OH cost per unit | $ 1.25 | ($ 5000 / 4000) | ||||
| $ 7.25 | ||||||
| 3) | ||||||
| a) | What is their breakeven point? | |||||
| Contribution Margin per unit = | Selling Price - Direct Labor - Direct Material | |||||
| = | $ 15 - $ 4 - $ 2 | |||||
| = | 9 | |||||
| Break even point = | Fixed Manu. Exp / Cont. Margin per unit | |||||
| = | $ 50000 / 9 | |||||
| = | 5556 | units | ||||
ekkarill92 answered 8 months agoRelated Solutions
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