Question
In: Accounting
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 year under full costing.
2. Compute the operating income for the first year under variable costing.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
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.
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.
SolarTubeGen is a start-up company in the renewable energy sector. The founder of SolarTubeGen, Fritz Herzberg,...
SolarTubeGen is a start-up company in the renewable energy
sector. The founder of SolarTubeGen, Fritz Herzberg, has developed
cutting-edge technology to convert the energy in the sun’s rays to
electricity via a novel system of mirrors designed to focus the
sun’s rays onto tubes containing a patented type of gas, which then
heats and expands to drive turbines. Ramirez & Walker LLP has
won the contract for the first audit of SolarTubeGen on the basis
of its expertise in the...
Inc. manufactures and sells one product. The following information pertains to each of the company's first...
Inc. manufactures and sells one product. The following
information pertains to each of the company's first two years of
operations:
Selling price per unit
$200
Variable costs per unit:
Manufacturing:
Direct materials
$68
Direct labor
$40
Variable manufacturing overhead
$11
Variable selling and administrative expense
$5
Fixed costs per year:
Fixed manufacturing overhead
$49,000
Selling and administrative expense
$111,000
Year
1
2
Production (units)
5,000
4,700
Sales (units)
4,600
5,100
Q.) What is net operating income under absorption costing...
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