Questions
Island Enterprises has presented the following information for the past eight months operations: Month Units Total...

Island Enterprises has presented the following information for the past eight months operations:

Month Units Total Cost
April 4,700 $ 18,400
May 3,900 $ 16,300
June 2,100 $ 12,500
July 3,500 $ 14,600
August 4,200 $ 17,400
September 4,900 $ 20,760
October 4,600 $ 17,900
November 4,100 $ 17,100


a. Using the high-low method, calculate the fixed cost per month and variable cost per unit. (Round variable cost to 2 decimal places.)

Fixed Cost _______ Per Month

Variable Cost _______ Per Unit


b. What would total costs be for a month with 3,700 units produced? (Do not round your intermediate calculations.)

In: Accounting

Enter answers only as numbers, and round decimals to 2 decimal places. Suppose that there is...

Enter answers only as numbers, and round decimals to 2 decimal places.

Suppose that there is natural monopoly that faces a demand curve Q=100-P with total cost function C(Q)=400+15Q.

The profit maximizing quantity for the natural monopolist, in the presence of a marginal cost pricing rule is ________ units.

The profit maximizing price that will set by the monopolist that will be set in the presence of a marginal cost pricing rule is $_________.

The average total cost per unit at the profit maximizing level of output in the presence of a marginal cost pricing rule is $__________.

The profit for the natural monopolist under the marginal cost pricing rule, given they set the profit maximizing price and level of output, is $________.

In: Economics

Ferris Company began January with 9,000 units of its principal product. The cost of each unit...

Ferris Company began January with 9,000 units of its principal product. The cost of each unit is $5. Merchandise transactions for the month of January are as follows:

Purchases
Date of Purchase Units Unit Cost. Total Cost
Jan. 10 6,000 $6 $36,000
Jan. 18 9,000 7 63,000
Totals 15,000 99,000

Includes purchase price and cost of freight

Sales
Date of Sale Units
Jan. 5 5,000
Jan. 12 3,000
Jan. 20 6,000
Total 14,000

10,000 units were on hand at the end of the month.

Calculate January's ending inventory and cost of goods sold for the month using Average cost, perpetual system.

In: Accounting

Delph Company uses a job-order costing system and has two manufacturing departments—Molding and Fabrication. The company...

Delph Company uses a job-order costing system and has two manufacturing departments—Molding and Fabrication. The company provided the following estimates at the beginning of the year:

  

Molding Fabrication Total
Machine-hours 30,000 40,000 70,000
Fixed manufacturing overhead costs $ 770,000 $ 290,000 $ 1,060,000
Variable manufacturing overhead cost per machine-hour $ 5.80 $ 5.80

  

During the year, the company had no beginning or ending inventories and it started, completed, and sold only two jobs—Job D-70 and Job C-200. It provided the following information related to those two jobs:

  

Job D-70: Molding Fabrication Total
Direct materials cost $ 377,000 $ 327,000 $ 704,000
Direct labor cost $ 230,000 $ 140,000 $ 370,000
Machine-hours 23,000 7,000 30,000

  

Job C-200: Molding Fabrication Total
Direct materials cost $ 260,000 $ 260,000 $ 520,000
Direct labor cost $ 110,000 $ 260,000 $ 370,000
Machine-hours 7,000 33,000 40,000

Delph had no underapplied or overapplied manufacturing overhead during the year.

Required:

1. Assume Delph uses a plantwide predetermined overhead rate based on machine-hours.

a. Compute the plantwide predetermined overhead rate.

Assume Delph uses a plantwide predetermined overhead rate based on machine-hours. Compute the plantwide predetermined overhead rate. (Round your answer to 2 decimal places.)
Predetermined overhead rate per MH

b. Compute the total manufacturing cost assigned to Job D-70 and Job C-200.

Assume Delph uses a plantwide predetermined overhead rate based on machine-hours. Compute the total manufacturing cost assigned to Job D-70 and Job C-200. (Round your intermediate calculations to 2 decimal places.)
Total Manufacturing Cost
Job D-70
Job C-200

c. If Delph establishes bid prices that are 140% of total manufacturing cost, what bid prices would it have established for Job D-70 and Job C-200?

Assume Delph uses a plantwide predetermined overhead rate based on machine-hours. If Delph establishes bid prices that are 140% of total manufacturing cost, what bid prices would it have established for Job D-70 and Job C-200? (Round your intermediate calculations to 2 decimal places.)
Bid price
Job D-70
Job C-200

d. What is Delph’s cost of goods sold for the year?

Assume Delph uses a plantwide predetermined overhead rate based on machine-hours. What is Delph’s cost of goods sold for the year? (Round your intermediate calculations to 2 decimal places.)
Cost of goods sold

In: Accounting

Carlton's Kitchens makes two types of pasta makers: Strands and Shapes. The company expects to manufacture...

Carlton's Kitchens makes two types of pasta makers: Strands and Shapes. The company expects to manufacture 80,000 units of Strands, which has a per-unit direct material cost of $10 and a per-unit direct labor cost of $60. It also expects to manufacture 20,000 units of Shapes, which has a per-unit material cost of $15 and a per-unit direct labor cost of $40. It is estimated that Strands will use 160,000 machine hours and Shapes will require 40,000 machine hours. Historically, the company has used the traditional allocation method and applied overhead at a rate of $20.84 per machine hour. It was determined that there were three cost pools, and the overhead for each cost pool is shown:

Machine Setups $67,500
Machine Processing 4,000,000
Material Requisitions 100,000
Total Overhead $4,167,500

The cost driver for each cost pool and its expected activity is shown:

Strands Shapes Total
Machine Setups 90 180 270
Machine Hours 160,000 40,000 200,000
Parts Requisitions 80 120 200

A. What is the per-unit cost for each product under the traditional allocation method? Round your answers to two decimal places.

Strands Shapes
Total per unit cost $ $

B. What is the per-unit cost for each product under ABC costing? Round your answers to two decimal places.

Strands Shapes
Total cost $ $

C. Compared to ABC costing, was each product's overhead under- or overapplied?

D. By how much was overhead under- or overapplied for each product? Round your answers to two decimal places.

Overhead Amounts
Strands Overapplied $
Shapes Underapplied $

In: Accounting

LIFO Perpetual Inventory The beginning inventory at Midnight Supplies and data on purchases and sales for...

LIFO 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

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 $

$

In: Accounting

After graduating from dental school two years ago, Dr. Lauren Farish purchased the dental practice of...

After graduating from dental school two years ago, Dr. Lauren Farish purchased the dental practice of a long-time dentist who was retiring. In January of this year she had to replace the outdated autoclave equipment she inherited from the previous dentist. Now, as she is preparing her budget for next year, she is concerned about understanding how her cost for sterilizing her dental instruments has changed. She has gathered the following information from her records:
Month Number of instruments used Total autoclave cost
January 650 $7,460
February 550 6,546
March 750 7,188
April 950 9,024
May 850 7,768
June 1,050 8,508
July 1,250 10,096
August 1,150 9,910
Using the high-low method, what is the variable cost of sterilizing an instrument using the new equipment? (Round answer to 2 decimal places, e.g. 52.75.)
Variable cost $Enter the Variable cost in dollars per instrument rounded to 2 decimal places per instrument

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What is the fixed cost of the autoclave equipment? (Round answer to 0 decimal places, e.g. 5,275.)
Fixed cost $enter the fixed cost in dollars rounded to 0 decimal places

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What is the cost formula that Dr. Farish should use for estimating autoclave sterilization costs for next year’s budget?
Formula of total cost Select a formula of total cost

($3,758 ÷ # of instruments) - $5.07($5.07 × # of instruments) - $3,758($3,758 × # of instruments) - $5.07($3,758 × # of instruments) + $5.07($5.07 ÷ # of instruments) + $3,758($3,758 ÷ # of instruments) + $5.07($5.07 ÷ # of instruments) - $3,758($5.07 × # of instruments) + $3,758

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If Dr. Farish estimates she will use 1,192 instruments next month, what cost should she include in her budget for instrument sterilization? (Round answer to 0 decimal places, e.g. 5,275.)
Total cost $Enter the total cost in dollars rounded to 0 decimal places

In: Accounting

Budget Performance Report Genie in a Bottle Company (GBC) manufactures plastic two-liter bottles for the beverage...

Budget Performance Report

Genie in a Bottle Company (GBC) manufactures plastic two-liter bottles for the beverage industry. The cost standards per 100 two-liter bottles are as follows:

Cost Category Standard Cost
per 100 Two-Liter
Bottles
Direct labor $1.22
Direct materials 5.14
Factory overhead 0.28
Total $6.64

At the beginning of July, GBC management planned to produce 620,000 bottles. The actual number of bottles produced for July was 669,600 bottles. The actual costs for July of the current year were as follows:

Cost Category Actual Cost for the
Month Ended July 31
Direct labor $8,006
Direct materials 33,591
Factory overhead 1,894
Total $43,491

Enter all amounts as positive numbers.

a. Prepare the July manufacturing standard cost budget (direct labor, direct materials, and factory overhead) for WBC, assuming planned production.

Genie in a Bottle Company
Manufacturing Cost Budget
For the Month Ended July 31
Standard Cost at Planned Volume(620,000 Bottles)
Manufacturing costs:
Direct labor $
Direct materials
Factory overhead
Total $

Feedback

Compare the actual costs with the standard cost at actual volume for direct labor, direct materials, and overhead. Identify the cost variance as favorable (actual less than standard) or unfavorable (actual greater than standard).

Review the concepts of favorable and unfavorable variances.

Learning Objective 2.

b. Prepare a budget performance report for manufacturing costs, showing the total cost variances for direct materials, direct labor, and factory overhead for July. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. If required, round your answers to nearest cent.

Genie in a Bottle Company
Manufacturing Costs-Budget Performance Report
For the Month Ended July 31
Actual
Costs		 Standard Cost at Actual Volume(669,600 Bottles) Cost Variance-
(Favorable)
Unfavorable
Manufacturing costs:
Direct labor $ $ $
Direct materials
Factory overhead
Total manufacturing cost $ $ $

In: Accounting

Budget Performance Report Genie in a Bottle Company (GBC) manufactures plastic two-liter bottles for the beverage...

Budget Performance Report

Genie in a Bottle Company (GBC) manufactures plastic two-liter bottles for the beverage industry. The cost standards per 100 two-liter bottles are as follows:

Cost Category Standard Cost
per 100 Two-Liter
Bottles
Direct labor $1.22
Direct materials 5.16
Factory overhead 0.32
Total $6.7

At the beginning of July, GBC management planned to produce 580,000 bottles. The actual number of bottles produced for July was 626,400 bottles. The actual costs for July of the current year were as follows:

Cost Category Actual Cost for the
Month Ended July 31
Direct labor $7,489
Direct materials 31,547
Factory overhead 2,025
Total $41,061

Enter all amounts as positive numbers.

a. Prepare the July manufacturing standard cost budget (direct labor, direct materials, and factory overhead) for WBC, assuming planned production.

Genie in a Bottle Company
Manufacturing Cost Budget
For the Month Ended July 31
Standard Cost at Planned Volume(580,000 Bottles)
Manufacturing costs:
Direct labor $
Direct materials
Factory overhead
Total $

Feedback

Compare the actual costs with the standard cost at actual volume for direct labor, direct materials, and overhead. Identify the cost variance as favorable (actual less than standard) or unfavorable (actual greater than standard).

Review the concepts of favorable and unfavorable variances.

Learning Objective 2.

b. Prepare a budget performance report for manufacturing costs, showing the total cost variances for direct materials, direct labor, and factory overhead for July. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. If required, round your answers to nearest cent.

Genie in a Bottle Company
Manufacturing Costs-Budget Performance Report
For the Month Ended July 31
Actual
Costs		 Standard Cost at Actual Volume(626,400 Bottles) Cost Variance-
(Favorable)
Unfavorable
Manufacturing costs:
Direct labor $ $ $
Direct materials
Factory overhead
Total manufacturing cost $ $

In: Accounting

Genie in a Bottle Company (GBC) manufactures plastic two-liter bottles for the beverage industry. The cost...

  1. Genie in a Bottle Company (GBC) manufactures plastic two-liter bottles for the beverage industry. The cost Performance goals, often relating to how much a product should cost.standards per 100 two-liter bottles are as follows:

    Cost Category Standard Cost
    per 100 Two-Liter
    Bottles
    Direct labor $1.54
    Direct materials 5.9
    Factory overhead 0.28
    Total $7.72

    At the beginning of July, GBC management planned to produce 490,000 bottles. The actual number of bottles produced for July was 529,200 bottles. The actual costs for July of the current year were as follows:

    Cost Category Actual Cost for the
    Month Ended July 31
    Direct labor $7,987
    Direct materials 30,473
    Factory overhead 1,497
    Total $39,957

    Enter all amounts as positive numbers.

    a. Prepare the July manufacturing A detailed estimate of what a product should cost.standard cost budget (direct labor, direct materials, and factory overhead) for WBC, assuming planned production.

    Genie in a Bottle Company
    Manufacturing Cost Budget
    For the Month Ended March 31
    Standard Cost at
    Planned Volume
    (490,000 Bottles)
    Manufacturing costs:
    Direct labor $
    Direct materials
    Factory overhead
    Total $

    Feedback

    b. Prepare a budget performance report for manufacturing costs, showing the total The difference between actual cost and the flexible budget at actual volumes.cost variances for direct materials, direct labor, and factory overhead for July. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Round your answers to two decimal places.

    Genie in a Bottle Company
    Manufacturing Costs-Budget Performance Report
    For the Month Ended March 31



    Actual
    Costs    		 Standard Cost
    at Actual
    Volume (529,200
    Bottles)    		 Cost
    Variance-
    (Favorable)
    Unfavorable
    Manufacturing costs:
    Direct labor $ $ $
    Direct materials
    Factory overhead
    Total manufacturing cost $ $ $

    Feedback

    c. The Company's actual costs were $897.24

    • more
    • less
    than budgeted.
    • Favorable
    • Unfavorable
    direct labor and direct material cost variances more than offset a small
    • favorable
    • unfavorable
    factory overhead cost variance.

In: Accounting