Question
In: Finance
Corporation has provided the following cost data for last year when 100,000 units were produced Raw...
Corporation has provided the following cost data for last year when 100,000 units were produced
Raw materials: $200,000
Direct Labor: $100,000
Manufacturing Overhead: $200,000
Sell & Admin Expense: $150,000
All costs are variable except for $100,000 of manufacturing overhead and $100,000 sell & admin expense. There are no beginning or ending inventories.
If the selling price is $10 per unit, the net operation income from producing and selling 110,000 units would be:
A) $560,000
B) $385,000
C) $405,000
D) $450,000
Solutions
Expert Solution
C) $405,000
| Step-1:Calculation of variable cost per unit at 100,000 units | |||||
| Total variable costs | Total units | Variable Cost per unit | |||
| a | b | c=a/b | |||
| Raw materials | $ 2,00,000 | 1,00,000 | $ 2.00 | ||
| Direct Labor | $ 1,00,000 | 1,00,000 | $ 1.00 | ||
| Manufacturing Overhead | $ 1,00,000 | 1,00,000 | $ 1.00 | ||
| Sell & Admin Expense | $ 50,000 | 1,00,000 | $ 0.50 | ||
| Note: | |||||
| Variable cost per unit remains same and fixed costs in total remains same. | |||||
| Step-2:Calculation of net operation income from producing and selling 110,000 units | |||||
| Per Unit | Total | ||||
| Sales | $ 10.00 | $ 11,00,000 | |||
| Variable costs: | |||||
| Raw materials | $ 2.00 | $ 2,20,000 | |||
| Direct Labor | $ 1.00 | $ 1,10,000 | |||
| Manufacturing Overhead | $ 1.00 | $ 1,10,000 | |||
| Sell & Admin Expense | $ 0.50 | $ 55,000 | |||
| Contribution Margin | $ 5.50 | $ 6,05,000 | |||
| Fixed Costs: | |||||
| Manufacturing Overhead | $ 1,00,000 | ||||
| Sell & Admin Expense | $ 1,00,000 | ||||
| Net Operation income | $ 4,05,000 | ||||
jeff jeffy answered 7 months agoRelated Solutions
Buttermilk bakery has provided the following cost data for the last year when 103,000 loaves of...
Buttermilk bakery has provided the following cost data for the
last year when 103,000 loaves of bread were produced and sold.
Raw Material $245.150
Direct labor $83,430
Manufacturing overhead $192,450
Selling and administrative costs $159,090
All costs are variable except for $116,230 overhead and $76,690
selling and administrative. The sales price was $10 per loaf.
A) How many units must be sold to meet a target operating income
of $348,309
B) If Buttermilk desires a target operating income of $152,600,...
Primare Corporation has provided the following data concerning last month’s manufacturing operations. Purchases of raw...
Primare Corporation has provided
the following data concerning last month’s manufacturing
operations.
Purchases of raw
materials
$
31,000
Indirect materials
included in manufacturing overhead
$
4,660
Direct labor
$
59,100
Manufacturing
overhead applied to work in process
$
88,300
Underapplied
overhead
$
4,110
Inventories
Beginning
Ending
Raw materials
$
10,500
$
19,400
Work in process
$
55,700
$
67,300
Finished goods
$
33,100
$
42,600
Required:
1.
Prepare a schedule of cost of
goods manufactured for the month....
Cienfuegos Corporation has provided the following data concerning last month’s operations. Purchases of raw materials $...
Cienfuegos Corporation
has provided the following data concerning last month’s
operations.
Purchases of raw
materials
$
36,000
Indirect
materials included in manufacturing overhead
$
4,000
Direct labor
cost
$
58,000
Manufacturing
overhead applied to Work in Process
$
90,000
Overapplied
overhead
$
3,000
Beginning
Ending
Raw materials
inventory
$
10,000
$
21,000
Work in process
inventory
$
62,000
$
70,000
Finished goods
inventory
$
36,000
$
40,000
The company closes out
any underapplied or overapplied manufacturing overhead to cost of...
Primare Corporation has provided the following data concerning last month’s manufacturing operations. Purchases of raw materials...
Primare Corporation has provided the following data concerning
last month’s manufacturing operations. Purchases of raw materials $
32,000 Indirect materials used in production $ 4,690 Direct labor $
59,200 Manufacturing overhead applied to work in process $ 87,000
Underapplied overhead $ 4,170 Inventories Beginning Ending Raw
materials $ 10,800 $ 19,800 Work in process $ 55,200 $ 66,800
Finished goods $ 35,000 $ 42,800
Required: 1. Prepare a schedule of cost of goods manufactured
for the month.
2. Prepare a...
Primare Corporation has provided the following data concerning last month’s manufacturing operations. Purchases of raw materials...
Primare Corporation has provided the following data concerning
last month’s manufacturing operations.
Purchases of raw materials
$
31,000
Indirect materials included in manufacturing overhead
$
4,550
Direct labor
$
58,600
Manufacturing overhead applied to work in process
$
88,100
Underapplied overhead
$
4,150
Inventories
Beginning
Ending
Raw materials
$
11,900
$
18,800
Work in process
$
54,600
$
68,100
Finished goods
$
33,300
$
43,000
Required:
1. Prepare a schedule of cost of goods manufactured for the
month.
2. Prepare...
Primare Corporation has provided the following data concerning last month’s manufacturing operations. Purchases of raw materials...
Primare Corporation
has provided the following data concerning last month’s
manufacturing operations.
Purchases of raw
materials
$
31,000
Indirect
materials used in production
$
4,510
Direct
labor
$
58,100
Manufacturing
overhead applied to work in process
$
88,600
Underapplied
overhead
$
4,170
Inventories
Beginning
Ending
Raw
materials
$
10,800
$
19,700
Work in
process
$
54,700
$
65,000
Finished
goods
$
34,700
$
43,500
Required:
1. Prepare a schedule
of cost of goods manufactured for the month.
2. Prepare a...
Primare Corporation has provided the following data concerning last month’s manufacturing operations. Purchases of raw materials...
Primare Corporation has provided the following data concerning
last month’s manufacturing operations.
Purchases of raw materials
$
31,000
Indirect materials included in manufacturing overhead
$
4,900
Direct labor
$
59,900
Manufacturing overhead applied to work in process
$
88,300
Underapplied overhead
$
4,100
Inventories
Beginning
Ending
Raw materials
$
10,800
$
19,400
Work in process
$
54,100
$
69,500
Finished goods
$
35,000
$
42,800
Required:
1. Prepare a schedule of cost of goods manufactured for the
month.
2. Prepare...
Primare Corporation has provided the following data concerning last month’s manufacturing operations. Purchases of raw materials...
Primare Corporation has provided the following data concerning
last month’s manufacturing operations.
Purchases of raw materials . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . $30,000
Indirect materials included in manufacturing overhead . . . . . . .
. . . . . . $5,000
Direct labor . . . ....
Primare Corporation has provided the following data concerning last month’s manufacturing operations. Purchases of raw materials...
Primare Corporation has provided the following data concerning
last month’s manufacturing operations. Purchases of raw materials $
32,000 Indirect materials included in manufacturing overhead $
4,690 Direct labor $ 58,100 Manufacturing overhead applied to work
in process $ 88,500 Underapplied overhead $ 4,180 Inventories
Beginning Ending Raw materials $ 10,300 $ 19,800 Work in process $
55,100 $ 67,100 Finished goods $ 34,200 $ 43,900
Required: 1. Prepare a schedule of cost of goods manufactured
for the month. 2. Prepare...
Primare Corporation has provided the following data concerning last month’s manufacturing operations. Purchases of raw materials...
Primare Corporation has provided the following data concerning
last month’s manufacturing operations.
Purchases of raw materials
$
32,000
Indirect materials included in manufacturing overhead
$
4,780
Direct labor
$
58,100
Manufacturing overhead applied to work in process
$
87,300
Underapplied overhead
$
4,040
Inventories
Beginning
Ending
Raw materials
$
10,700
$
18,700
Work in process
$
54,300
$
67,600
Finished goods
$
33,800
$
42,800
Required:
1. Prepare a schedule of cost of goods manufactured for the
month.
2. Prepare...
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