Question
In: Finance
Start Me Up Inc. manufactures a caffeinated energy drink that sells for $5.00 each. The results...
Start Me Up Inc. manufactures a caffeinated energy drink that sells for $5.00 each. The results for its first year of operations appear in the table below:
| Projections | |||
| Number of drinks produced | 57,500 | ||
| Number of drinks sold | 47,900 | ||
| Direct materials per drink | $ | 0.75 | |
| Direct labor per drink | $ | 0.45 | |
| Variable manufacturing overhead per drink | $ | 0.35 | |
| Total fixed manufacturing overhead | $ | 45,425 | |
| Total fixed selling and administrative costs | $ | 60,000 | |
Required:
1. Compute the operating income for the first year under full costing.
2. Compute the operating income for the first year under variable costing.
(For all requirements, do not round intermediate calculations.)
Solutions
jeff jeffy answered 5 months agoRelated Solutions
Start Me Up Inc. manufactures a caffeinated energy drink that sells for $4.80 each. The results...
Start Me Up Inc. manufactures a caffeinated energy drink that
sells for $4.80 each. The results for its first year of operations
appear in the table below:
Projections
Number of drinks produced
56,500
Number of drinks sold
47,700
Direct materials per drink
$
0.73
Direct labor per drink
$
0.43
Variable manufacturing overhead per drink
$
0.33
Total fixed manufacturing overhead
$
43,505
Total fixed selling and administrative costs
$
59,000
Required:
1. Compute the operating income for the first...
Start Me Up Inc. manufactures a caffeinated energy drink that sells for $4.70 each. The results...
Start Me Up Inc. manufactures a caffeinated energy drink that
sells for $4.70 each. The results for its first year of operations
appear in the table below:
Projections
Number of drinks produced
51,000
Number of drinks sold
46,600
Direct materials per drink
$
0.62
Direct labor per drink
$
0.32
Variable manufacturing overhead per drink
$
0.22
Total fixed manufacturing overhead
$
33,660
Total fixed selling and administrative costs
$
53,500
Required:
1. Compute the operating income for the first...
Quik Results, Inc.(QRI), a Michigan corporation, makes and sells Power Up!, a super energy boosting, carbonated...
Quik Results, Inc.(QRI), a Michigan corporation, makes and sells
Power Up!, a super energy boosting, carbonated beverage. Power Up!
is made in Michigan, but shipped to stores all across the Midwest
and East Coast. Power Up! is made by QRI, and delivered on QRI.
trucks, by QRI employees. QRI has in-house accounting and marketing
staff.
QRI’s in-house marketing department decides to use in print ads for
Power Up! direct quotes from a study that shows the ingredients in
Power...
Imagine Chiquita owns a start up – Swanky Dog Inc. – a firm that sells high...
Imagine Chiquita owns a start up – Swanky Dog Inc. – a firm that
sells high end winter coats for dogs. Dog coats sell for $80 each
without deviation. She only has enough capacity in her facility to
produce a maximum of 10 coats per week. The fixed costs of
production are $100. The total variable costs are as follows:
price
quantity
FC
VC
80
0
100
0
80
1
100
55
80
2
100
84
80
3
100
114...
The company Volar inc. manufactures and sells a single answering machine. Here are the results established...
The company Volar inc. manufactures and sells a single answering
machine. Here are the results established using the variable cost
method for the most recent period.
Total
Per unit
Percentage of sales
Sales (20,000 units)
1 200 000 $
60 $
100%
Less: variable costs
900 000
45
25%
Variable cost margin
300 000
15
75%
Less: fixed costs
240 000
Profit
60 000 $
Work to do :
1) Calculate the breakeven point (in units and dollars) of
Voltar...
Fact Scenario: Quik Results, Inc.(QRI), a Michigan corporation, makes and sells Power Up!, a super...
Fact Scenario:
Quik Results, Inc.(QRI), a Michigan corporation, makes and sells
Power Up!, a super energy boosting, carbonated beverage. Power Up!
is made in Michigan, but shipped to stores all across the Midwest
and East Coast. Power Up! is made by QRI, and delivered on QRI.
trucks, by QRI employees. QRI has in-house accounting and marketing
staff.
Quicksilver Delivery Service contracts to deliver Power Up! in
California for $5,000, payable in advance. QRI pays the money, but
Quicksilver...
Fact Scenario: Quik Results, Inc.(QRI), a Michigan corporation, makes and sells Power Up!, a super...
Fact Scenario:
Quik Results, Inc.(QRI), a Michigan corporation, makes and sells
Power Up!, a super energy boosting, carbonated beverage. Power Up!
is made in Michigan, but shipped to stores all across the Midwest
and East Coast. Power Up! is made by QRI, and delivered on QRI.
trucks, by QRI employees. QRI has in-house accounting and marketing
staff.
QRI, hires Cole to its in-house marketing team to develop and
implement an e-commerce strategy for marketing Power Up!. Cole
signs...
Fact Scenario: Quik Results, Inc.(QRI), a Michigan corporation, makes and sells Power Up!, a super...
Fact Scenario:
Quik Results, Inc.(QRI), a Michigan corporation, makes and sells
Power Up!, a super energy boosting, carbonated beverage. Power Up!
is made in Michigan, but shipped to stores all across the Midwest
and East Coast. Power Up! is made by QRI, and delivered on QRI.
trucks, by QRI employees. QRI has in-house accounting and marketing
staff.
Steve, a driver for QRI, leaves the truck's motor running in
neutral and carelessly forgets to set the parking brake while...
Fact Scenario: Quik Results, Inc.(QRI), a Michigan corporation, makes and sells Power Up!, a super...
Fact Scenario:
Quik Results, Inc.(QRI), a Michigan corporation, makes and sells
Power Up!, a super energy boosting, carbonated beverage. Power Up!
is made in Michigan, but shipped to stores all across the Midwest
and East Coast. Power Up! is made by QRI, and delivered on QRI.
trucks, by QRI employees. QRI has in-house accounting and marketing
staff.
QRI is concerned about preventing competitors from imitating the
distinctive Power Up! logo and thereby misleading customers. How
can QRI protect...
SHU Inc., manufactures and a product that sells for $1,720 each. During the year, the budgeted...
SHU Inc., manufactures and a product
that sells for $1,720 each. During the year, the budgeted fixed
manufacturing overhead is estimated to be $1,900,000. Variable
costs per unit are $440.
Required:
a.
Determine the break-even point in units.
b. Determine the break-even sales dollars
c.
Determine the number of units that must be sold
to earn $300,000 in profit before taxes.
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