Question
In: Accounting
The Hans Solo Company reports the following cost data for its single product. The company regularly...
The Hans Solo Company reports the following cost data for its
single product. The company regularly sells 300,000 units of its
product at a price of $45.00 per unit.
|
Direct materials |
$3.86 |
per unit |
|
Direct labor |
$9.03 |
per unit |
|
Overhead costs for the year |
||
|
Variable overhead |
$4.75 |
per unit |
|
Fixed overhead per year |
$456,700 |
|
|
Selling and administrative costs for the year |
||
|
Variable |
$1.99 |
per unit |
|
Fixed |
$89,100 |
|
|
Normal production level (in units) |
300,000 |
units |
If using variable costing:
a. What is the total product cost per unit? Round your answer to the nearest cent (2 decimal places).
b. What is the contribution margin per unit? Round your answer to the nearest cent (2 decimal places).
c. What is the contribution margin ratio? Round your answer to 2 decimal places and include a percentage (%) sign.
If using absorption costing:
d. What is the total product cost per unit? Round your answer to the nearest cent (2 decimal places).
e. What is the gross margin per unit? Round your answer to the nearest cent (2 decimal places).
f. What is the gross margin percentage? Round your answer to 2 decimal places and include a percentage (%) sign.
Solutions
Expert Solution
a.
| Computation of Unit Product Cost | |
| Variable Costing | |
| Direct Meterial | $ 3.86 |
| Direct Labour | $ 9.03 |
| Variable Manufactoring Overhead | $ 4.75 |
| Unit product cost | $ 17.64 |
b.
| Selling price per unit | $ 45.00 |
| Less: Unit product cost under variable costing | $ (17.64) |
| Less: Variable selling and administrative costs | $ (1.99) |
| Contribution margin | $ 25.37 |
c.
| Contribution margin ratio = Contribution margin / Selling price * 100 |
| Contribution margin ratio = $25.37 / $45 * 100 = 56.38% |
d.
| Computation of Unit Product Cost | |
| Absorption Costing | |
| Direct Meterial | $ 3.86 |
| Direct Labour | $ 9.03 |
| Variable Manufactoring Overhead | $ 4.75 |
| Fixed Manufactoring Overhead ($456,700/300,000) | $ 1.52 |
| Unit Product Cost | $ 19.16 |
e
| Selling price per unit | $ 45.00 |
| Less: Unit product cost under absorption costing | $ (19.16) |
| Gross margin | $ 25.84 |
f.
| Gross margin ratio = Gross margin / Selling price * 100 |
| Gross margin ratio = $25.84 / $45 * 100 |
| Gross margin ratio = 57.42% |
ekkarill92 answered 1 year agoRelated Solutions
Jacquie Inc. reports the following annual cost data for its single product. Normal production and sales...
Jacquie Inc. reports the following annual cost data for its
single product.
Normal production and sales level
67,000
units
Sales price
$
56.70
per unit
Direct materials
$
9.70
per unit
Direct labor
$
7.20
per unit
Variable overhead
$
11.70
per unit
Fixed overhead
$
944,700
in total
Complete the below table using absorption costing. (Round
cost per unit answers to 2 decimal places.)
Production volume
Cost of goods sold:
67,000 units
94,000 units
Cost of goods sold per...
Thompson Company uses a standard cost system for its single product. The following data are available:...
Thompson Company uses a standard cost system for its single
product. The following data are available:
Actual experience for the current year:
Raw materials purchased and used (12,000 yards at $13.00 per
yard) $156,000
Direct labor costs (10,200 hours at $10.00 per hour) …………
$102,000
Actual variable overhead cost …………………………………...............
$84,150
Units produced ………………………………………………..........................
12,600 units
Standards per unit of product:
Raw Materials................. 1.1 yarts at $15.00 per
yard
Direct Labor..................... 0.8 hours at $9.50 per
hour
Variable Overhead........ $8...
Thompson Company uses a standard cost system for its single product. The following data are available:...
Thompson Company uses a standard cost system for its single
product. The following data are available:
Actual experience for the current year:
Purchases of raw materials (11,000 yards at $11.00
per yard)
$
121,000
Raw materials used
15,000
yards
Direct labor costs (10,400 hours at $8.00 per
hour)
$
83,200
Actual variable overhead cost
$
84,050
Units produced
12,800
units
Standards per unit of product:
Raw materials
1.5 yards at $13.00 per yard
Direct labor
.8 hours at $7.50 per...
Thompson Company uses a standard cost system for its single product The following data is available...
Thompson Company uses a standard cost system for its single
product The following data is available for the month of May
2017:
Standards per unit of product:
Direct materials 3 pounds at $8 per yard
Direct labor 1.5 hours at $14 per hour
Actual experience for the current year:
Purchases of raw materials (15,000 pounds ) $124,500
Raw materials used $12,000 pounds
Direct labor costs (6,720) $95,760
Units produced 4200
Required: Complete a table and state how well direct material...
Diaz Company reports the following variable costing income statement for its single product. This company’s sales...
Diaz Company reports the following variable costing income
statement for its single product. This company’s sales totaled
51,000 units, but its production was 81,000 units. It had no
beginning finished goods inventory for the current
period.
DIAZ COMPANY
Income Statement (Variable Costing)
Sales (51,000 units × $61.00 per unit)
$
3,111,000
Variable expenses
Variable manufacturing expense (51,000 units × $28.10 per
unit)
1,433,100
Variable selling and admin. expense (51,000 units × $5.10 per
unit)
260,100
Total variable expenses
1,693,200
Contribution...
Diaz Company reports the following variable costing income statement for its single product. This company’s sales...
Diaz Company reports the following variable costing income
statement for its single product. This company’s sales totaled
48,000 units, but its production was 78,000 units. It had no
beginning finished goods inventory for the current period. DIAZ
COMPANY Income Statement (Variable Costing) Sales (48,000 units ×
$58.00 per unit) $ 2,784,000 Variable expenses Variable
manufacturing expense (48,000 units × $27.80 per unit) 1,334,400
Variable selling and admin. expense (48,000 units × $4.80 per unit)
230,400 Total variable expenses 1,564,800 Contribution...
Rundle Manufacturing Company produces a single product. The following data apply to the standard cost of...
Rundle Manufacturing Company produces a single product.
The following data apply to the standard cost of materials and
labor associated with making the product:
Materials quantity per unit
1
pound
Materials price
$
6.10
per pound
Labor quantity per unit
2
hours
Labor price
$
10.10
per hour
During the year, the company made 2,020 units of product. At the
end of the year, the following variances had been calculated.
Materials usage variance
$
1,159
Favorable
Materials price variance
$...
Denton Company manufactures and sells a single product. Cost data for the product are given: Variable...
Denton Company manufactures and sells a single product. Cost
data for the product are given:
Variable costs per unit:
Direct materials
$
4
Direct labor
10
Variable manufacturing
overhead
2
Variable selling and
administrative
3
Total variable cost per
unit
$
19
Fixed costs per month:
Fixed manufacturing
overhead
$
75,000
Fixed selling and
administrative
166,000
Total fixed cost per month
$
241,000
The product sells for $50 per unit. Production and sales data
for July and August, the first...
Denton Company manufactures and sells a single product. Cost data for the product are given: Variable...
Denton Company
manufactures and sells a single product. Cost data for the product
are given:
Variable costs
per unit:
Direct
materials
$
3
Direct
labor
9
Variable
manufacturing overhead
4
Variable selling
and administrative
1
Total variable
cost per unit
$
17
Fixed costs per
month:
Fixed
manufacturing overhead
$
108,000
Fixed selling
and administrative
166,000
Total fixed cost
per month
$
274,000
The product sells for
$53 per unit. Production and sales data for July and August, the
first...
Denton Company manufactures and sells a single product. Cost data for the product are given: Variable...
Denton Company manufactures and sells a single product. Cost
data for the product are given:
Variable costs per unit:
Direct materials
$
5
Direct labor
10
Variable manufacturing overhead
3
Variable selling and administrative
3
Total variable cost per unit
$
21
Fixed costs per month:
Fixed manufacturing overhead
$
120,000
Fixed selling and administrative
166,000
Total fixed cost per month
$
286,000
The product sells for $50 per unit. Production and sales data
for July and August, the first...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Young and Company claims that its pressurized diving bell will, on average, maintain its integrity to...
- 1) Alternative compiled code sequence using instructions in classes A, B, C. What is the average...
- An asset is purchased on January 1 for $48,700. It is expected to have a useful...
- Do we have any online or offline tool to convert c and cpp programs into MIPS...
- -what is the pH of HCl 0,1M and NaCl 0,1M mixed together solution? -What is the...
- function X=extractDWT(x_train,startS,endS,wStep,wRange) % x_train = input signal % startS = from second % endS = end...
- Do you agree that Social Loafing is similar to Theory X. Give an example to support...
ADVERTISEMENT