Exercise 14-15 Schedule of cost of goods manufactured and cost of goods sold LO P1, P2

Beck Manufacturing reports the information below for 2017.

Required:
1. Prepare the schedule of cost of goods manufactured for the year.
2. Compute cost of goods sold for the year.

Part 1

Part 2

Willis Products Inc. uses the product cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 2,000 units of medical tablets are as follows:

Willis Products desires a profit equal to a 25% rate of return on invested assets of $116,560.

a. Determine the total manufacturing costs for the production and sale of 2,000 units.

Determine the cost amount per unit for the production and sale of 2,000 units.
$ per unit

b. Determine the product cost markup percentage per unit. Round your percentage answer to one decimal place.
%

c. Determine the selling price per unit. Use the rounded product cost markup percentage in your calculations, and round the amount of the markup to the nearest whole dollar.
$ per unit

Edney Company employs a standard cost system for product costing. The per-unit standard cost of its product is:

The manufacturing overhead rate is based on a normal capacity level of 600,000 direct labor hours. (Normal capacity is defined as the level of capacity needed to satisfy average customer demand over a period of two to four years. Operationally, this level of capacity would take into consideration sales trends and both seasonal and cyclical factors affecting demand.) The firm has the following annual manufacturing overhead budget:

Edney incurred $435,950 in direct labor cost for 54,800 direct labor hours to manufacture 26,000 units in November. Other costs incurred in November include $338,000 for fixed manufacturing overhead and $373,500 for variable manufacturing overhead.

Required:

1. Determine each of the following for November. [Note: Indicate whether each variance is favorable (F) or unfavorable (U).]

a. The variable overhead spending variance.

b. The variable overhead efficiency variance.

c. The fixed overhead spending (budget) variance.

d. The fixed overhead production volume variance.

e. The total amount of under- or overapplied manufacturing overhead (i.e., the total manufacturing overhead cost variance for the period).

In the book Advanced Managerial Accounting, Robert P. Magee discusses monitoring cost variances. A cost variance is the difference between a budgeted cost and an actual cost. Magee describes the following situation:

Michael Bitner has responsibility for control of two manufacturing processes. Every week he receives a cost variance report for each of the two processes, broken down by labor costs, materials costs, and so on. One of the two processes, which we'll call process A , involves a stable, easily controlled production process with a little fluctuation in variances. Process B involves more random events: the equipment is more sensitive and prone to breakdown, the raw material prices fluctuate more, and so on.

     "It seems like I'm spending more of my time with process B than with process A," says Michael Bitner. "Yet I know that the probability of an inefficiency developing and the expected costs of inefficiencies are the same for the two processes. It's just the magnitude of random fluctuations that differs between the two, as you can see in the information below."

     "At present, I investigate variances if they exceed $2,931, regardless of whether it was process A or B. I suspect that such a policy is not the most efficient. I should probably set a higher limit for process B."

The means and standard deviations of the cost variances of processes A and B, when these processes are in control, are as follows: (Round final answers to 4 decimal places.):

Furthermore, the means and standard deviations of the cost variances of processes A and B, when these processes are out of control, are as follows:

(a) Recall that the current policy is to investigate a cost variance if it exceeds $2,931 for either process. Assume that cost variances are normally distributed and that both Process A and Process B cost variances are in control. Find the probability that a cost variance for Process A will be investigated. Find the probability that a cost variance for Process B will be investigated. Which in-control process will be investigated more often.

   (Click to select)  Process A  Process B  is investigated more often

(b) Assume that cost variances are normally distributed and that both Process A and Process B cost variances are out of control. Find the probability that a cost variance for Process A will be investigated. Find the probability that a cost variance for Process B will be investigated. Which out-of-control process will be investigated more often.

(Click to select)  Process A  Process B  is investigated more often.

(c) If both Processes A and B are almost always in control, which process will be investigated more often.

(Click to select)  Process A  Process B  will be investigated more often.

(d) Suppose that we wish to reduce the probability that Process B will be investigated (when it is in control) to .2877. What cost variance investigation policy should be used? That is, how large a cost variance should trigger an investigation? Using this new policy, what is the probability that an out-of-control cost variance for Process B will be investigated?

actual sales : 8500 unit
variable cost actual $ 188.800
fixed cost actual $ 71.200
sales price $ 31,00
sales budget : 9000 unit.
Variable cost standar perunit $ 21,8
Fixed cost budget $ 70.000

Questions

1. Static budget variances.
2. Sales activity variances.
3. Using a flexible budget at the actual activity level, calculate the contribution margin budget, the profit budget, and the flexible budget variant.

Discuss how cost allocation or transfer pricing and activity-base cost applies to banking industry and financial institution. Once you have identified the subject of interest, your post should focus on an assessment of the situation. What do you believe are the key issues? If there are problems, what solutions do you see? If this is a post that illustrates a successful resolution of a challenge, how was this success achieved?

1) How do you calculate and incorporate fixed manufacturing overhead cost into cost of goods sold under absorption costing? Do you have to factor in goods produced as well as goods sold for this aspect of cost of goods sold?

2) When comparing variable costing net income and absorption costing net income, how do you know whether you are adding or deducting fixed manufacturing overhead deferred or released from inventory under absorption costing?

1 .Wu Company incurred $40,000 of fixed cost and $50,000 of variable cost when 4,000 units of product were made and sold.

If the company's volume doubles, the company's total cost will:

stay the same.

double as well.

increase but will not double.

decrease.

2 .Hard Nails and Bright Nails are competing nail salons. Both companies have the same number of customers. Both charge the same price for a manicure. The only difference is that Hard Nails pays its manicurists on a salary basis (i.e., a fixed cost structure) while Bright Nails pays its manicurists on the basis of the number of customers they serve (i.e., a variable cost structure). Both companies currently make the same amount of net income. If sales of both salons increase by an equal amount, Hard Nails:

will earn a higher profit than Bright Nails.

will earn a lower profit than Bright Nails.

will earn the same amount of profit as Bright Nails.

The answer cannot be determined from the information provided.

3 The excess of a product's selling price over its variable costs is referred to as:

gross profit

gross margin

contribution margin

manufacturing margin

manufacturing margin

7. Product Cost Method of Product Costing

Voice Com, Inc. uses the product cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 4,620 cell phones are as follows:

Voice Com desires a profit equal to a 15% rate of return on invested assets of $598,200.

a. Determine the amount of desired profit from the production and sale of 4,620 cell phones.
$

b. Determine the product cost per unit for the production of 4,620 of cell phones. Round your answer to the nearest whole dollar.
$ per unit

c. Determine the product cost markup percentage for cell phones. Round your answer to two decimal places.
%

d. Determine the selling price of cell phones. Round your answers to the nearest whole dollar.

Business plan for Guest house , describing about Fixed,variable and mixed cost with break even cost, an example describing about Guest house cost structure?