Question
In: Accounting
Franklin Company incurred manufacturing overhead cost for the year as follows: Direct materials $ 38.20 /unit...
Franklin Company incurred manufacturing overhead cost for the year as follows:
| Direct materials | $ | 38.20 | /unit |
| Direct labor | $ | 27.10 | /unit |
| Manufacturing overhead | |||
| Variable | $ | 10.50 | /unit |
| Fixed ($19.20/unit for 1,300 units) | $ | 24,960 | |
| Variable selling and administrative expenses | $ | 6,160 | |
| Fixed selling and administrative expenses | $ | 14,300 | |
The company produced 1,300 units and sold 800 of them at $180.30 per unit. Assume that the production manager is paid a 2 percent bonus based on the company’s net income.
Required
Prepare an income statement using absorption costing.
Prepare an income statement using variable costing.
Determine the manager’s bonus using each approach. Which approach would you recommend for internal reporting?
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Shellborn Company incurred manufacturing overhead cost for the year as follows. Direct materials $ 39.50 /unit...
Shellborn Company
incurred manufacturing overhead cost for the year as
follows.
Direct
materials
$
39.50
/unit
Direct
labor
$
27.10
/unit
Manufacturing
overhead
Variable
$
10.30
/unit
Fixed
($19.70/unit for 1,100 units)
$
21,670
Variable selling
and administrative expenses
$
3,660
Fixed selling
and administrative expenses
$
14,200
The company produced
1,100 units and sold 600 of them at $180.60 per unit. Assume that
the production manager is paid a 1 percent bonus based on the
company’s net income.
Required...
Adams Company incurred manufacturing overhead cost for the year as follows. Direct materials $ 38.70 /unit...
Adams Company incurred manufacturing overhead cost for the year
as follows.
Direct materials
$
38.70
/unit
Direct labor
$
26.10
/unit
Manufacturing overhead
Variable
$
10.90
/unit
Fixed ($20.10/unit for 1,500 units)
$
30,150
Variable selling and administrative expenses
$
7,700
Fixed selling and administrative expenses
$
15,400
The company produced 1,500 units and sold 1,000 of them at
$181.00 per unit. Assume that the production manager is paid a 3
percent bonus based on the company’s net income.
Required...
Rundle Company incurred manufacturing overhead cost for the year as follows. Direct materials $ 39.20 /unit...
Rundle Company incurred manufacturing overhead cost for the year
as follows.
Direct materials
$
39.20
/unit
Direct labor
$
28.00
/unit
Manufacturing overhead
Variable
$
10.40
/unit
Fixed ($18.50/unit for 1,700 units)
$
31,450
Variable selling and administrative expenses
$
9,600
Fixed selling and administrative expenses
$
14,300
The company produced 1,700 units and sold 1,200 of them at
$181.70 per unit. Assume that the production manager is paid a 2
percent bonus based on the company’s net income.
Required...
Dilia Company incurred manufacturing overhead cost for the year as follows: Direct materials $ 50 /unit...
Dilia Company incurred manufacturing overhead cost for the year
as follows:
Direct materials
$
50
/unit
Direct labor
$
35
/unit
Manufacturing overhead
Variable
$
15
/unit
Fixed ($25/unit for 1,500
units)
$
37,500
Variable selling and
administrative expenses
$
10,500
Fixed selling and administrative
expenses
$
20,000
The company produced 1,500 units and sold 1,200 of them at $225
per unit. Assume that the production manager is paid a 2 percent
bonus based on the company’s net income.
Required...
Dilia Company incurred manufacturing overhead cost for the year as follows: Direct materials $ 50 /unit...
Dilia Company incurred manufacturing overhead cost for the year
as follows:
Direct materials
$
50
/unit
Direct labor
$
35
/unit
Manufacturing overhead
Variable
$
15
/unit
Fixed ($25/unit for 1,500
units)
$
37,500
Variable selling and
administrative expenses
$
10,500
Fixed selling and administrative
expenses
$
20,000
The company produced 1,500 units and sold 1,200 of them at $225
per unit. Assume that the production manager is paid a 2 percent
bonus based on the company’s net income.
Required...
Variable Cost Per Unit: Manufacturing: Direct Materials = $20 Direct Labor = $12 Variable Manufacturing Overhead...
Variable Cost Per Unit:
Manufacturing:
Direct Materials = $20
Direct Labor = $12
Variable Manufacturing Overhead = $4
Variable Selling and Administrative = $2
Fixed costs per year:
Fixed manufacturing overhead = $960,000
Fixed selling and administrative expenses = $240,000
During its first year of Operations, produced 60,000 units and
sold 60,000 units. During it's second year of operations, it
produced 75,000 and sold 50,000 units. In its third year, it
produced 40,000 units and sold 65,000 units. The selling...
The following costs were incurred in April: Direct materials $45,300 Direct labor $23,800 Manufacturing overhead $17,500...
The following costs were incurred in April: Direct materials
$45,300 Direct labor $23,800 Manufacturing overhead $17,500 Selling
expenses $16,800 Administrative expenses $30,200 Prime costs during
the month totaled: ? $41,300 ? $69,100 ? $86,600 ? $133,600
Case Prime Cost Conversion Cost Direct Materials Direct Labor Manufacturing Overhead Total Manufacturing Cost A 9,480...
Case
Prime Cost
Conversion Cost
Direct Materials
Direct Labor
Manufacturing Overhead
Total Manufacturing Cost
A
9,480
16,460
4,040
11,020
B
10,010
7,330
25,200
42,540
C
55,700
110,300
42,300
D
48,150
19,900
11,750
68,050
E
14,000
24,300
56,200
For each of the following independent cases (A–E),
compute the missing values in the table:
Variable costs per unit: Manufacturing: Direct materials $ 27 Direct labor $ 13 Variable manufacturing overhead...
Variable costs per unit: Manufacturing: Direct materials $ 27
Direct labor $ 13 Variable manufacturing overhead $ 2 Variable
selling and administrative $ 1 Fixed costs per year: Fixed
manufacturing overhead $ 320,000 Fixed selling and administrative
expenses $ 90,000 During its first year of operations, Walsh
produced 50,000 units and sold 40,000 units. During its second year
of operations, it produced 40,000 units and sold 50,000 units. The
selling price of the company’s product is $58 per unit.
Assume...
Morton Company has two divisions. Sales, direct materials cost, direct labor cost, and manufacturing overhead data...
Morton Company has two divisions. Sales, direct materials cost,
direct labor cost, and manufacturing overhead data for Morton’s two
divisions are available below. Note: All of Morton Company’s
products are sold in competitive markets.
Missile
Salt
Products Products
Sales
$1,500,000
$1,000,000
Direct
labor
(800,000)
(300,000)
Direct
materials
(100,000)
(40,000)
Manufacturing
overhead*
(400,000)
(150,000)
Gross
profit
$200,000
$510,000
*Manufacturing overhead is allocated to production based on the
amount of direct labor cost.
Morton has determined
that its total...
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