Exercise 14-8 Cost of goods manufactured and cost of goods sold computation LO P1, P2

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Section BreakExercise 14-8 Cost of goods manufactured and cost of goods sold computation LO P1, P2

4.

value:
3.12 points

Required information

Exercise 14-8 Part 1

From the following information on costs of production, calculate Total Fixed Cost, Total Variable Cost, Average Variable Cost, and Marginal Cost.

I also need to graph the total cost curves as well as the average and marginal cost curves.

TC = TFC + TVC so for Q=1 TC=30, assume TFC=20 so TVC=10 (20+10=30); continue with logic about
FC, it is independent of output, so it would be an incremental 20 with each additional level of output, TVC for each Q is calculated with simple math TVC=TC-20

Please help me complete the spreadsheet

Problem 2-18B Cost behavior and averaging

Chris Quill asks you to analyze the operating cost of his lawn services business. He has bought the needed equipment with a cash payment of $90,000. Upon your recommendation, he agrees to adopt straight-line depreciation. The equipment has an expected life of four years and no salvage value. Mr. Quill pays his workers $20 per lawn service. Material costs, including fertilizer, pesticide, and supplies, are expected to be $10 per lawn service.

Required

Determine the total cost of equipment depreciation and the average cost of equipment depreciation per lawn service, assuming that Mr. Quill provides 40, 50, or 60 lawn services during one month. Is the cost of equipment a fixed or a variable cost?

Determine the total expected cost of labor and the average expected cost of labor per lawn service, assuming that Mr. Quill provides 40, 50, or 60 lawn services during one month. Is the cost of labor a fixed or a variable cost?

Determine the total expected cost of materials and the average expected cost of materials per lawn service, assuming that Mr. Quill provides 40, 50, or 60 lawn services during one month. Is the cost of fertilizer, pesticide, and supplies a fixed or a variable cost?

Determine the total expected cost per lawn service, assuming that Mr. Quill provides 40, 50, or 60 lawn services during one month.

Determine the average expected cost per lawn service, assuming that Mr. Quill provides 40, 50, or 60 lawn services during one month. Why does the cost per unit decrease as the number of lawn services increases?

If Mr. Quill tells you that he prices his services at 30 percent above cost, would you assume that he means average or actual cost? Why?

Cost of Production Report: Average Cost Method

Sunrise Coffee Company roasts and packs coffee beans. The process begins in the Roasting Department. From the Roasting Department, the coffee beans are transferred to the Packing Department. The following is a partial work in process account of the Roasting Department at December 31:

Required:

Prepare a cost of production report, using the average cost method, and identify the missing amounts for Work in Process—Roasting Department. If required, round your cost per equivalent unit answer to the nearest cent.

dney 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 $436,750 in direct labor cost for 55,200 direct labor hours to manufacture 26,000 units in November. Other costs incurred in November include $362,000 for fixed manufacturing overhead and $391,500 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).

2. Prepare the following four journal entries: (a) to record actual variable overhead costs, (b) to record actual fixed overhead costs, (c) to record standard overhead costs applied to production, and (d) to record all four overhead cost variances. The company uses a single account, Factory Overhead, to record all overhead costs. Assume that the actual variable manufacturing overhead consists of utilities payable of $173,500, indirect materials of $134,000 (all materials, direct and indirect, are recorded in a single account, Materials Inventory), and $84,000 depreciation on factory equipment (determined under the units-of-production method). Assume that the fixed manufacturing overhead consists of accrued (i.e, unpaid) salaries of $77,000 and factory depreciation of $285,000. All unpaid salaries should be recorded in a single account, Accrued Payroll.

3. Prepare the appropriate journal entry to close all manufacturing overhead variances to the cost of goods sold (CGS) account. (Assume the cost variances you calculated above are for the year, not the month.)

Identify basic cost behavior patterns and explain how changes in activity level affect total cost and unit cost?

Cost of Production Report: Average Cost Method

Sunrise Coffee Company roasts and packs coffee beans. The process begins in the Roasting Department. From the Roasting Department, the coffee beans are transferred to the Packing Department. The following is a partial work in process account of the Roasting Department at December 31:

Required:

Prepare a cost of production report, using the average cost method, and identify the missing amounts for Work in Process—Roasting Department. If required, round your cost per equivalent unit answer to two decimal places.

Cost of Production Report: Average Cost Method

Sunrise Coffee Company roasts and packs coffee beans. The process begins in the Roasting Department. From the Roasting Department, the coffee beans are transferred to the Packing Department. The following is a partial work in process account of the Roasting Department at December 31:

Required:

Prepare a cost of production report, using the average cost method, and identify the missing amounts for Work in Process—Roasting Department. If required, round your cost per equivalent unit answer to two decimal places.