Question
In: Accounting
Mason Corporation began operations at the beginning of the current year. One of the company’s products,...
Mason Corporation began operations at the beginning of the current year. One of the company’s products, a refrigeration element, sells for $195 per unit. Information related to the current year’s activities follows.
| Variable costs per unit: | |||
| Direct material | $ | 10 | |
| Direct labor | 36 | ||
| Manufacturing overhead | 44 | ||
| Annual fixed costs: | |||
| Manufacturing overhead | $ | 600,000 | |
| Selling and administrative | 860,000 | ||
| Production and sales activity: | |||
| Production (units) | 24,000 | ||
| Sales (units) | 20,000 | ||
Mason carries its finished goods inventory at the average unit cost of production and is subject to a 30 percent income tax rate. There was no work in process at year-end.
1.)Determine the cost of the December 31 finished goods inventory.
2.)Compute Mason’s net income for the current year ended December 31.
3.)If next year’s production decreases to 23,000 units and general cost behavior patterns do not change, what is the likely effect on
The direct-labor cost of $36 per unit?
No change
Increase
Decrease
The fixed manufacturing overhead cost of $600,000?
No change
Increase
The fixed selling and administrative cost of $860,000?
No change
Increase
Decrease
The average unit cost of production?
No change
Increase
Decrease
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Mason Corporation began operations at the beginning of the current year. One of the company’s products,...
Mason Corporation
began operations at the beginning of the current year. One of the
company’s products, a refrigeration element, sells for $205 per
unit. Information related to the current year’s activities
follows.
Variable costs per unit:
Direct material
$
15
Direct
labor
36
Manufacturing
overhead
46
Annual fixed
costs:
Manufacturing
overhead
$
600,000
Selling and
administrative
860,000
Production and
sales activity:
Production
(units)
24,000
Sales
(units)
20,000
Mason carries its
finished goods inventory at the average unit cost of production...
Mason Corporation began operations at the beginning of the current year. One of the company’s products,...
Mason Corporation began operations at the beginning of the
current year. One of the company’s products, a refrigeration
element, sells for $195 per unit. Information related to the
current year’s activities follows.
Variable costs per unit:
Direct material $ 20
Direct labor 36
Manufacturing overhead 46
Annual fixed costs:
Manufacturing overhead $ 600,000
Selling and administrative 860,000
Production and sales activity:
Production (units) 24,000
Sales (units) 20,000
________________________________________
Mason carries its finished goods inventory at the average unit
cost of...
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years for financial reporting and MACRS (3-year asset). Information
about carrying value and tax basis of the asset is found in the
table below.
Book
Tax
Year
Depreciation
Carrying value
MACRS
Tax basis
1
40
160
66
134
2
40
120
90
44
3
40
80
30...
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current year. Budgeted sales for the first three months of business
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October, and November. The company expects to sell 25% of its
merchandise for cash. Of sales on account, 70% are expected to be
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The cash collections expected in October are
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Nuthatch Corporation began its operations on September 1 of the
current year. Budgeted sales for the first three months of
business—September, October, and November—are $237,000, $304,000,
and $414,000, respectively. The company expects to sell 30% of its
merchandise for cash. Of sales on account, 80% are expected to be
collected in the month of the sale and 20% in the month following
the sale.
The cash collections expected in September from accounts
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Nuthatch Corporation began its operations on September 1 of the current year. Budgeted sales for the...
Nuthatch Corporation began its operations on September 1 of the
current year. Budgeted sales for the first three months of
business—September, October, and November—are $260,000, $375,000,
and $400,000, respectively. The company expects to sell 30% of its
merchandise for cash. Of sales on account, 80% are expected to be
collected in the month of the sale and 20% in the month following
the sale.
The cash collections expected in November from accounts receivable
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Nuthatch Corporation began its operations on September 1 of the current year. Budgeted sales for the...
Nuthatch Corporation began its operations on September 1 of the
current year. Budgeted sales for the first three months of business
September, October, and November are $243,000, $307,000, and
$429,000, respectively. The company expects to sell 30% of its
merchandise for cash. Of sales on account, 80% are expected to be
collected in the month of the sale and 20% in the month following
the sale.
The cash collections expected in October from accounts
receivable are estimated to be
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Question 2 Hydropure Ltd commenced operations at the beginning of the current year. One of the...
Question 2
Hydropure Ltd commenced operations at the beginning of the
current year. One of the company’s products, an alkaline
antioxidant water filter, sells for $299 per unit. Information
related to the current year’s activities are as follows:
$
Variable costs per unit:
Direct materials 40
Direct labour 74
Manufacturing overhead 96
Annual fixed costs:
Manufacturing overhead 700,000
Selling and administrative 880,000
Production and sales activity:
Production (units) 25,000
Sales (units) 20,000
Hydropure Ltd carries its finished goods inventory...
Carolina Corporation, which uses throughput costing, began operations at the start of the current year. Planned...
Carolina Corporation, which uses throughput costing, began
operations at the start of the current year. Planned and actual
production equaled 20,000 units, and sales totaled 17,000 units at
$95 per unit. Cost data for the year were as follows: Direct
materials (per unit) $ 18 Conversion cost: Direct labor 225,000
Variable manufacturing overhead 335,000 Fixed manufacturing
overhead 300,000 Selling and administrative costs (total)
443,000
Required:
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Road Warrior Corporation began operations early in the current year, building luxury motor homes. During the...
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year (summarized alphabetically) were as follows.
Direct materials
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Direct labor
803,000
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