Kubin Company’s relevant range of production is 15,000 to 19,000 units. When it produces and sells 17,000 units, its average costs per unit are as follows:
| Average Cost per Unit | ||
| Direct materials | $ | 7.60 |
| Direct labor | $ | 4.60 |
| Variable manufacturing overhead | $ | 2.10 |
| Fixed manufacturing overhead | $ | 5.60 |
| Fixed selling expense | $ | 4.10 |
| Fixed administrative expense | $ | 3.10 |
| Sales commissions | $ | 1.60 |
| Variable administrative expense | $ | 1.10 |
Required:
1. Assume the cost object is units of production:
a. What is the total direct manufacturing cost incurred to make 17,000 units?
b. What is the total indirect manufacturing cost incurred to make 17,000 units?
2. Assume the cost object is the Manufacturing Department and that its total output is 17,000 units.
a. How much total manufacturing cost is directly traceable to the Manufacturing Department?
b. How much total manufacturing cost is an indirect cost that cannot be easily traced to the Manufacturing Department?
3. Assume the cost object is the company’s various sales representatives. Furthermore, assume that the company spent $52,700 of its total fixed selling expense on advertising and the remainder of the total fixed selling expense comprised the fixed portion of the company's sales representatives’ compensation.
a. When the company sells 17,000 units, what is the total direct selling expense that can be readily traced to individual sales representatives?
b. When the company sells 17,000 units, what is the total indirect selling expense that cannot be readily traced to individual sales representatives?
In: Finance
Kubin Company’s relevant range of production is 30,000 to 35,000 units. When it produces and sells 32,500 units, its average costs per unit are as follows:
| Average Cost per Unit | ||
| Direct materials | $ | 9.00 |
| Direct labor | $ | 6.00 |
| Variable manufacturing overhead | $ | 3.50 |
| Fixed manufacturing overhead | $ | 7.00 |
| Fixed selling expense | $ | 5.50 |
| Fixed administrative expense | $ | 4.50 |
| Sales commissions | $ | 3.00 |
| Variable administrative expense | $ | 2.50 |
Required:
1. Assume the cost object is units of production:
a. What is the total direct manufacturing cost incurred to make 32,500 units?
b. What is the total indirect manufacturing cost incurred to make 32,500 units?
2. Assume the cost object is the Manufacturing Department and that its total output is 32,500 units.
a. How much total manufacturing cost is directly traceable to the Manufacturing Department?
b. How much total manufacturing cost is an indirect cost that cannot be easily traced to the Manufacturing Department?
3. Assume the cost object is the company’s various sales representatives. Furthermore, assume that the company spent $146,250 of its total fixed selling expense on advertising and the remainder of the total fixed selling expense comprised the fixed portion of the company's sales representatives’ compensation.
a. When the company sells 32,500 units, what is the total direct selling expense that can be readily traced to individual sales representatives?
b. When the company sells 32,500 units, what is the total indirect selling expense that cannot be readily traced to individual sales representatives?
In: Accounting
Kubin Company’s relevant range of production is 30,000 to 35,000 units. When it produces and sells 32,500 units, its average costs per unit are as follows:
| Average Cost per Unit | ||
| Direct materials | $ | 9.00 |
| Direct labor | $ | 6.00 |
| Variable manufacturing overhead | $ | 3.50 |
| Fixed manufacturing overhead | $ | 7.00 |
| Fixed selling expense | $ | 5.50 |
| Fixed administrative expense | $ | 4.50 |
| Sales commissions | $ | 3.00 |
| Variable administrative expense | $ | 2.50 |
Required:
1. Assume the cost object is units of production:
a. What is the total direct manufacturing cost incurred to make 32,500 units?
b. What is the total indirect manufacturing cost incurred to make 32,500 units?
2. Assume the cost object is the Manufacturing Department and that its total output is 32,500 units.
a. How much total manufacturing cost is directly traceable to the Manufacturing Department?
b. How much total manufacturing cost is an indirect cost that cannot be easily traced to the Manufacturing Department?
3. Assume the cost object is the company’s various sales representatives. Furthermore, assume that the company spent $146,250 of its total fixed selling expense on advertising and the remainder of the total fixed selling expense comprised the fixed portion of the company's sales representatives’ compensation.
a. When the company sells 32,500 units, what is the total direct selling expense that can be readily traced to individual sales representatives?
b. When the company sells 32,500 units, what is the total indirect selling expense that cannot be readily traced to individual sales representatives?
In: Accounting
Kubin Company’s relevant range of production is 13,000 to 18,000 units. When it produces and sells 15,500 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 7.40 Direct labor $ 4.40 Variable manufacturing overhead $ 1.90 Fixed manufacturing overhead $ 5.40 Fixed selling expense $ 3.90 Fixed administrative expense $ 2.90 Sales commissions $ 1.40 Variable administrative expense $ 0.90 Required: 1. Assume the cost object is units of production: a. What is the total direct manufacturing cost incurred to make 15,500 units? b. What is the total indirect manufacturing cost incurred to make 15,500 units? 2. Assume the cost object is the Manufacturing Department and that its total output is 15,500 units. a. How much total manufacturing cost is directly traceable to the Manufacturing Department? b. How much total manufacturing cost is an indirect cost that cannot be easily traced to the Manufacturing Department? 3. Assume the cost object is the company’s various sales representatives. Furthermore, assume that the company spent $44,950 of its total fixed selling expense on advertising and the remainder of the total fixed selling expense comprised the fixed portion of the company's sales representatives’ compensation. a. When the company sells 15,500 units, what is the total direct selling expense that can be readily traced to individual sales representatives? b. When the company sells 15,500 units, what is the total indirect selling expense that cannot be readily traced to individual sales representatives?
In: Accounting
Kubin Company’s relevant range of production is 20,000 to 23,000 units. When it produces and sells 21,500 units, its average costs per unit are as follows:
| Average Cost per Unit | ||
| Direct materials | $ | 8.00 |
| Direct labor | $ | 5.00 |
| Variable manufacturing overhead | $ | 2.50 |
| Fixed manufacturing overhead | $ | 6.00 |
| Fixed selling expense | $ | 4.50 |
| Fixed administrative expense | $ | 3.50 |
| Sales commissions | $ | 2.00 |
| Variable administrative expense | $ | 1.50 |
Required:
1. Assume the cost object is units of production:
a. What is the total direct manufacturing cost incurred to make 21,500 units?
b. What is the total indirect manufacturing cost incurred to make 21,500 units?
2. Assume the cost object is the Manufacturing Department and that its total output is 21,500 units.
a. How much total manufacturing cost is directly traceable to the Manufacturing Department?
b. How much total manufacturing cost is an indirect cost that cannot be easily traced to the Manufacturing Department?
3. Assume the cost object is the company’s various sales representatives. Furthermore, assume that the company spent $75,250 of its total fixed selling expense on advertising and the remainder of the total fixed selling expense comprised the fixed portion of the company's sales representatives’ compensation.
a. When the company sells 21,500 units, what is the total direct selling expense that can be readily traced to individual sales representatives?
b. When the company sells 21,500 units, what is the total indirect selling expense that cannot be readily traced to individual sales representatives?
In: Accounting
Maintaining a clean working environment is important to Life is Great, an industrial parts manufacturer. Cleaning the plant is the responsibility of the maintenance department. The 80,000 square foot plant is thoroughly cleaned from four to eight times a month depending on the level and stage of production. For the most recent month, March, the plant was cleaned four times. The production schedule for the next quarter (April through June) indicates that the plant will need to be cleaned five, six, and eight times respectively. Two of the resources needed to clean the plant are labor and cleaning supplies. The cost driver for both resources is number of times the plant is cleaned. Plant cleaning laborers are full-time employees who are paid the same wages regardless of the number of times the plant is cleaned. Cleaning supplies is a variable cost. The March cost of labor was $ 27,000 and cleaning supplies used cost $ 9,600.
Requirement 1. Prepare a table that shows how labor cost, cleaning supplies cost, total cost, and total cost per cleaning changes in response to the number of times the plant is cleaned. What is the predicted total cost of plant cleaning for the next quarter?
Begin by preparing a table that shows how labor cost, cleaning supplies cost, total cost, and total cost per cleaning changes in response to the number of times the plant is cleaned. (Do not round until the final answer for the cost per cleaning. Then round to the nearest whole dollar.)
|
Number of Times Plant is Cleaned |
Square Feet Cleaned |
Cleaning Supplies Cost |
Total Cost |
Cost Per Cleaning |
|
| 4 | |||||
| 5 | |||||
| 6 | |||||
| 7 | |||||
| 8 |
In: Accounting
Demand for a certain product is 25,000 units/yr. Unit cost is $10.00. Holding cost rate is 30%/yr. Changeove5r (setup) time between products is 10.0 hr, and downtime cost during changeover is $150/hr. Determine (a) economic order quantity, (b) total inventory costs, and (c) total inventory cost per year as a proportion of total production costs.
In: Operations Management
Fast Co. produces its product through a single processing department. Direct materials are added at the start of production, and conversion costs are added evenly throughout the process. The company uses monthly reporting periods for its weighted-average process costing system. The Work in Process Inventory account has a balance of $98,300 as of October 1, which consists of $21,300 of direct materials and $77,000 of conversion costs.
During the month the company incurred the following
costs:
| Direct materials | $ | 160,150 |
| Conversion | 813,880 | |
During October, the company started 154,000 units and transferred
164,000 units to finished goods. At the end of the month, the work
in process inventory consisted of 27,000 units that were 80%
complete with respect to conversion costs.
Required:
1. Prepare the company’s process cost summary for
October using the weighted-average method.
2. Prepare the journal entry dated October 31 to
transfer the cost of the completed units to finished goods
inventory.
Prepare the company’s process cost summary for October using the weighted-average method. (Round "Cost per EUP" to 2 decimal places.)
|
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Record the transfer of goods to finished goods inventory.
|
In: Accounting
Perpetual Inventory
The beginning inventory at Midnight Supplies and data on purchases and sales for a three-month period ending March 31 are as follows:
| Date | Transaction | Number of Units |
Per Unit | Total | ||||
|---|---|---|---|---|---|---|---|---|
| Jan. 1 | Inventory | 7,500 | $75.00 | $562,500 | ||||
| 10 | Purchase | 22,500 | 85.00 | 1,912,500 | ||||
| 28 | Sale | 11,250 | 150.00 | 1,687,500 | ||||
| 30 | Sale | 3,750 | 150.00 | 562,500 | ||||
| Feb. 5 | Sale | 1,500 | 150.00 | 225,000 | ||||
| 10 | Purchase | 54,000 | 87.50 | 4,725,000 | ||||
| 16 | Sale | 27,000 | 160.00 | 4,320,000 | ||||
| 28 | Sale | 25,500 | 160.00 | 4,080,000 | ||||
| Mar. 5 | Purchase | 45,000 | 89.50 | 4,027,500 | ||||
| 14 | Sale | 30,000 | 160.00 | 4,800,000 | ||||
| 25 | Purchase | 7,500 | 90.00 | 675,000 | ||||
| 30 | Sale | 26,250 | 160.00 | 4,200,000 | ||||
Required:
1. Record the inventory, purchases, and cost of goods sold data in a perpetual inventory record similar to the one illustrated in Exhibit 4, using the last-in, first-out method. Under LIFO, if units are in inventory at two different costs, enter the units with the HIGHER unit cost first in the Cost of Goods Sold Unit Cost column and LOWER unit cost first in the Inventory Unit Cost column. Round unit cost to two decimal places, if necessary.
| Midnight Supplies Schedule of Cost of Goods Sold LIFO Method For the Three Months Ended March 31 |
|||||||||
|---|---|---|---|---|---|---|---|---|---|
| Purchases | Cost of Goods Sold | Inventory | |||||||
| Date | Quantity | Unit Cost | Total Cost | Quantity | Unit Cost | Total Cost | Quantity | Unit Cost | Total Cost |
| Jan. 1 | $ | $ | |||||||
| Jan. 10 | $ | $ | |||||||
| Jan. 28 | $ | $ | |||||||
| Jan. 30 | |||||||||
| Feb. 5 | |||||||||
| Feb. 10 | |||||||||
| Feb. 16 | |||||||||
| Feb. 28 | |||||||||
| Mar. 5 | |||||||||
| Mar. 14 | |||||||||
| Mar. 25 | |||||||||
| Mar. 30 | |||||||||
| Mar. 31 | Balances | $ | $ | ||||||
2. Determine the total sales, the total cost of goods sold, and the gross profit from sales for the period.
| Total sales | $ |
| Total cost of goods sold | $ |
| Gross profit | $ |
3. Determine the ending inventory cost as of
March 31.
$
In: Accounting
A firm is producing and selling some output at an average variable cost of $8 per unit and bringing in a total revenue of $400. If the firm is currently indifferent between shutting down and continuing to operate in the short run and has a total fixed cost of $600, what is the firms average total cost?
In: Economics