Tami Tyler opened Tami’s Creations, Inc., a small manufacturing company, at the beginning of the year. Getting the company through its first quarter of operations placed a considerable strain on Ms. Tyler’s personal finances. The following income statement for the first quarter was prepared by a friend who has just completed a course in managerial accounting at State University.
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Tami’s Creations, Inc. |
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| Sales (24,000 units) | $ | 871,200 | ||
| Variable expenses: | ||||
| Variable cost of goods sold | $ | 297,600 | ||
| Variable selling and administrative | 188,400 | 486,000 | ||
| Contribution margin | 385,200 | |||
| Fixed expenses: | ||||
| Fixed manufacturing overhead | 216,000 | |||
| Fixed selling and administrative | 218,000 | 434,000 | ||
| Net operating loss | $ | ( 48,800) | ||
|
Ms. Tyler is discouraged over the loss shown for the quarter, particularly because she had planned to use the statement as support for a bank loan. Another friend, a CPA, insists that the company should be using absorption costing rather than variable costing and argues that if absorption costing had been used the company would probably have reported at least some profit for the quarter. |
|
At this point, Ms. Tyler is manufacturing only one product, a swimsuit. Production and cost data relating to the swimsuit for the first quarter follow: |
| Units produced | 27,000 | |
| Units sold | 24,000 | |
| Variable costs per unit: | ||
| Direct materials | $ | 7.40 |
| Direct labor | $ | 3.00 |
| Variable manufacturing overhead | $ | 2.00 |
| Variable selling and administrative | $ | 7.85 |
| Required: |
| 1. | Complete the following: |
| a. |
Compute the unit product cost under absorption costing. (Round your intermediate and final answers to 2 decimal places.) |
| b. |
Redo the company’s income statement for the quarter using absorption costing. (Round your intermediate calculations to 2 decimal places.) |
| c. |
Reconcile the variable and absorption costing net operating income (loss) figures. (Round your intermediate calculations to 2 decimal places.) |
| 3. |
During the second quarter of operations, the company again produced 27,000 units but sold 30,000 units. (Assume no change in total fixed costs.) |
| a. |
Prepare a contribution format income statement for the quarter using variable costing. (Round your intermediate calculations to 2 decimal places.) |
| b. |
Prepare an income statement for the quarter using absorption costing. (Round your intermediate calculations to 2 decimal places.) |
| c. |
Reconcile the variable costing and absorption costing net operating incomes. (Round your intermediate calculations to 2 decimal places.) |
In: Accounting
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Tami Tyler opened Tami’s Creations, Inc., a small manufacturing company, at the beginning of the year. Getting the company through its first quarter of operations placed a considerable strain on Ms. Tyler’s personal finances. The following income statement for the first quarter was prepared by a friend who has just completed a course in managerial accounting at State University. |
|
Tami’s Creations, Inc. Income Statement For the Quarter Ended March 31 |
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| Sales (22,000 units) | $ | 798,600 | ||
| Variable expenses: | ||||
| Variable cost of goods sold | $ | 266,200 | ||
| Variable selling and administrative | 173,800 | 440,000 | ||
| Contribution margin | 358,600 | |||
| Fixed expenses: | ||||
| Fixed manufacturing overhead | 207,500 | |||
| Fixed selling and administrative | 221,000 | 428,500 | ||
| Net operating loss | $ | ( 69,900) | ||
|
Ms. Tyler is discouraged over the loss shown for the quarter, particularly because she had planned to use the statement as support for a bank loan. Another friend, a CPA, insists that the company should be using absorption costing rather than variable costing and argues that if absorption costing had been used the company would probably have reported at least some profit for the quarter. |
|
At this point, Ms. Tyler is manufacturing only one product, a swimsuit. Production and cost data relating to the swimsuit for the first quarter follow: |
| Units produced | 25,000 | |
| Units sold | 22,000 | |
| Variable costs per unit: | ||
| Direct materials | $ | 7.40 |
| Direct labor | $ | 2.70 |
| Variable manufacturing overhead | $ | 2.00 |
| Variable selling and administrative | $ | 7.90 |
| Required: |
| 1. | Complete the following: |
| a. |
Compute the unit product cost under absorption costing. (Round your intermediate and final answers to 2 decimal places.) |
| b. |
Redo the company’s income statement for the quarter using absorption costing. (Round your intermediate calculations to 2 decimal places.) |
| c. |
Reconcile the variable and absorption costing net operating income (loss) figures. (Round your intermediate calculations to 2 decimal places.) |
| 3. |
During the second quarter of operations, the company again produced 25,000 units but sold 28,000 units. (Assume no change in total fixed costs.) |
| a. |
Prepare a contribution format income statement for the quarter using variable costing. (Round your intermediate calculations to 2 decimal places.) |
| b. |
Prepare an income statement for the quarter using absorption costing. (Round your intermediate calculations to 2 decimal places.) |
| c. |
Reconcile the variable costing and absorption costing net operating incomes. (Round your intermediate calculations to 2 decimal places.) |
In: Accounting
Tami Tyler opened Tami’s Creations, Inc., a small manufacturing company, at the beginning of the year. Getting the company through its first quarter of operations placed a considerable strain on Ms. Tyler’s personal finances. The following income statement for the first quarter was prepared by a friend who has just completed a course in managerial accounting at State University.
|
Tami’s Creations, Inc. Income Statement For the Quarter Ended March 31 |
|||||||
| Sales (22,000 units) | $ | 798,600 | |||||
| Variable expenses: | |||||||
| Variable cost of goods sold | $ | 257,400 | |||||
| Variable selling and administrative expenses | 170,500 | 427,900 | |||||
| Contribution margin | 370,700 | ||||||
| Fixed expenses: | |||||||
| Fixed manufacturing overhead | 205,000 | ||||||
| Fixed selling and administrative expenses | 221,000 | 426,000 | |||||
| Net operating loss | $ | ( 55,300 | ) | ||||
Ms. Tyler is discouraged over the loss shown for the quarter, particularly because she had planned to use the statement as support for a bank loan. Another friend, a CPA, insists that the company should be using absorption costing rather than variable costing and argues that if absorption costing had been used the company probably would have reported at least some profit for the quarter.
At this point, Ms. Tyler is manufacturing only one product, a swimsuit. Production and cost data relating to the swimsuit for the first quarter follow:
| Units produced | 25,000 | ||
| Units sold | 22,000 | ||
| Variable costs per unit: | |||
| Direct materials | $ | 7.30 | |
| Direct labor | $ | 2.70 | |
| Variable manufacturing overhead | $ | 1.70 | |
| Variable selling and administrative |
$ |
7.75 | |
Required:
1. Complete the following:
a. Compute the unit product cost under absorption costing. (Round your intermediate and final answers to 2 decimal places.)
b. Redo the company’s income statement for the quarter using absorption costing. (Round your intermediate calculations to 2 decimal places.)
c. Reconcile the variable and absorption costing net operating income (loss) figures. (Round your intermediate calculations to 2 decimal places.)
3. During the second quarter of operations, the company again produced 25,000 units but sold 28,000 units. (Assume no change in total fixed costs.)
a. Prepare a contribution format income statement for the quarter using variable costing. (Round your intermediate calculations to 2 decimal places.)
b. Prepare an income statement for the quarter using absorption costing. (Round your intermediate calculations to 2 decimal places.)
c. Reconcile the variable costing and absorption costing net operating incomes. (Round your intermediate calculations to 2 decimal places.)
In: Accounting
|
Tami Tyler opened Tami’s Creations, Inc., a small manufacturing company, at the beginning of the year. Getting the company through its first quarter of operations placed a considerable strain on Ms. Tyler’s personal finances. The following income statement for the first quarter was prepared by a friend who has just completed a course in managerial accounting at State University. |
|
Tami’s Creations, Inc. Income Statement For the Quarter Ended March 31 |
||||
| Sales (24,000 units) | $ | 871,200 | ||
| Variable expenses: | ||||
| Variable cost of goods sold | $ | 280,800 | ||
| Variable selling and administrative | 190,800 | 471,600 | ||
| Contribution margin | 399,600 | |||
| Fixed expenses: | ||||
| Fixed manufacturing overhead | 218,700 | |||
| Fixed selling and administrative | 217,000 | 435,700 | ||
| Net operating loss | $ | ( 36,100) | ||
|
Ms. Tyler is discouraged over the loss shown for the quarter, particularly because she had planned to use the statement as support for a bank loan. Another friend, a CPA, insists that the company should be using absorption costing rather than variable costing and argues that if absorption costing had been used the company would probably have reported at least some profit for the quarter. |
|
At this point, Ms. Tyler is manufacturing only one product, a swimsuit. Production and cost data relating to the swimsuit for the first quarter follow: |
| Units produced | 27,000 | ||||||||||||||||||||||||||||||
| Units sold | 24,000 | ||||||||||||||||||||||||||||||
| Variable costs per unit: | |||||||||||||||||||||||||||||||
| Direct materials | $ | 7.20 | |||||||||||||||||||||||||||||
| Direct labor | $ | 2.70 | |||||||||||||||||||||||||||||
| Variable manufacturing overhead | $ | 1.80 | |||||||||||||||||||||||||||||
| Variable selling and administrative | $ | 7.95 | |||||||||||||||||||||||||||||
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In: Accounting
Problem 6-23A Absorption and Variable Costing; Production Constant, Sales Fluctuate [LO6-1, LO6-2, LO6-3]
|
Tami Tyler opened Tami’s Creations, Inc., a small manufacturing company, at the beginning of the year. Getting the company through its first quarter of operations placed a considerable strain on Ms. Tyler’s personal finances. The following income statement for the first quarter was prepared by a friend who has just completed a course in managerial accounting at State University. |
|
Tami’s Creations, Inc. Income Statement For the Quarter Ended March 31 |
||||
| Sales (23,000 units) | $ | 834,900 | ||
| Variable expenses: | ||||
| Variable cost of goods sold | $ | 269,100 | ||
| Variable selling and administrative | 179,400 | 448,500 | ||
| Contribution margin | 386,400 | |||
| Fixed expenses: | ||||
| Fixed manufacturing overhead | 221,000 | |||
| Fixed selling and administrative | 219,000 | 440,000 | ||
| Net operating loss | $ | ( 53,600) | ||
|
Ms. Tyler is discouraged over the loss shown for the quarter, particularly because she had planned to use the statement as support for a bank loan. Another friend, a CPA, insists that the company should be using absorption costing rather than variable costing and argues that if absorption costing had been used the company would probably have reported at least some profit for the quarter. |
|
At this point, Ms. Tyler is manufacturing only one product, a swimsuit. Production and cost data relating to the swimsuit for the first quarter follow: |
| Units produced | 26,000 | |
| Units sold | 23,000 | |
| Variable costs per unit: | ||
| Direct materials | $ | 7.20 |
| Direct labor | $ | 2.80 |
| Variable manufacturing overhead | $ | 1.70 |
| Variable selling and administrative | $ | 7.80 |
| Required: |
| 1. | Complete the following: |
| a. |
Compute the unit product cost under absorption costing. (Round your intermediate and final answers to 2 decimal places.) |
| b. |
Redo the company’s income statement for the quarter using absorption costing. (Round your intermediate calculations to 2 decimal places.) |
| c. |
Reconcile the variable and absorption costing net operating income (loss) figures. (Round your intermediate calculations to 2 decimal places.) |
| 3. |
During the second quarter of operations, the company again produced 26,000 units but sold 29,000 units. (Assume no change in total fixed costs.) |
| a. |
Prepare a contribution format income statement for the quarter using variable costing. (Round your intermediate calculations to 2 decimal places.) |
| b. |
Prepare an income statement for the quarter using absorption costing. (Round your intermediate calculations to 2 decimal places.) |
| c. |
Reconcile the variable costing and absorption costing net operating incomes. (Round your intermediate calculations to 2 decimal places.) |
In: Accounting
Tami Tyler opened Tami’s Creations, Inc., a small manufacturing company, at the beginning of the year. Getting the company through its first quarter of operations placed a considerable strain on Ms. Tyler’s personal finances. The following income statement for the first quarter was prepared by a friend who has just completed a course in managerial accounting at State University.
|
Tami’s Creations, Inc. Income Statement For the Quarter Ended March 31 |
|||||||
| Sales (24,000 units) | $ | 871,200 | |||||
| Variable expenses: | |||||||
| Variable cost of goods sold | $ | 285,600 | |||||
| Variable selling and administrative expenses | 184,800 | 470,400 | |||||
| Contribution margin | 400,800 | ||||||
| Fixed expenses: | |||||||
| Fixed manufacturing overhead | 224,100 | ||||||
| Fixed selling and administrative expenses | 221,000 | 445,100 | |||||
| Net operating loss | $ | ( 44,300 | ) | ||||
Ms. Tyler is discouraged over the loss shown for the quarter, particularly because she had planned to use the statement as support for a bank loan. Another friend, a CPA, insists that the company should be using absorption costing rather than variable costing and argues that if absorption costing had been used the company probably would have reported at least some profit for the quarter.
At this point, Ms. Tyler is manufacturing only one product, a swimsuit. Production and cost data relating to the swimsuit for the first quarter follow:
| Units produced | 27,000 | ||
| Units sold | 24,000 | ||
| Variable costs per unit: | |||
| Direct materials | $ | 7.20 | |
| Direct labor | $ | 2.80 | |
| Variable manufacturing overhead | $ | 1.90 | |
| Variable selling and administrative |
$ |
7.70 | |
Required:
1. Complete the following:
a. Compute the unit product cost under absorption costing. (Round your intermediate and final answers to 2 decimal places.)
b. Redo the company’s income statement for the quarter using absorption costing. (Round your intermediate calculations to 2 decimal places.)
c. Reconcile the variable and absorption costing net operating income (loss) figures. (Round your intermediate calculations to 2 decimal places.)
3. During the second quarter of operations, the company again produced 27,000 units but sold 30,000 units. (Assume no change in total fixed costs.)
a. Prepare a contribution format income statement for the quarter using variable costing.(Round your intermediate calculations to 2 decimal places.)
b. Prepare an income statement for the quarter using absorption costing. (Round your intermediate calculations to 2 decimal places.)
c. Reconcile the variable costing and absorption costing net operating incomes. (Round your intermediate calculations to 2 decimal places.)
In: Accounting
|
Tami Tyler opened Tami’s Creations, Inc., a small manufacturing company, at the beginning of the year. Getting the company through its first quarter of operations placed a considerable strain on Ms. Tyler’s personal finances. The following income statement for the first quarter was prepared by a friend who has just completed a course in managerial accounting at State University. |
|
Tami’s Creations, Inc. |
||||
| Sales (22,000 units) | $ | 798,600 | ||
| Variable expenses: | ||||
| Variable cost of goods sold | $ | 277,200 | ||
| Variable selling and administrative | 173,800 | 451,000 | ||
| Contribution margin | 347,600 | |||
| Fixed expenses: | ||||
| Fixed manufacturing overhead | 210,000 | |||
| Fixed selling and administrative | 215,000 | 425,000 | ||
| Net operating loss | $ | ( 77,400) | ||
|
Ms. Tyler is discouraged over the loss shown for the quarter, particularly because she had planned to use the statement as support for a bank loan. Another friend, a CPA, insists that the company should be using absorption costing rather than variable costing and argues that if absorption costing had been used the company would probably have reported at least some profit for the quarter. |
|
At this point, Ms. Tyler is manufacturing only one product, a swimsuit. Production and cost data relating to the swimsuit for the first quarter follow: |
| Units produced | 25,000 | |
| Units sold | 22,000 | |
| Variable costs per unit: | ||
| Direct materials | $ | 7.50 |
| Direct labor | $ | 3.10 |
| Variable manufacturing overhead | $ | 2.00 |
| Variable selling and administrative | $ | 7.90 |
| Required: |
| 1. | Complete the following: |
| a. |
Compute the unit product cost under absorption costing. (Round your intermediate and final answers to 2 decimal places.) |
| b. |
Redo the company’s income statement for the quarter using absorption costing. (Round your intermediate calculations to 2 decimal places.) |
| c. |
Reconcile the variable and absorption costing net operating income (loss) figures. (Round your intermediate calculations to 2 decimal places.) |
| 3. |
During the second quarter of operations, the company again produced 25,000 units but sold 28,000 units. (Assume no change in total fixed costs.) |
| a. |
Prepare a contribution format income statement for the quarter using variable costing. (Round your intermediate calculations to 2 decimal places.) |
| b. |
Prepare an income statement for the quarter using absorption costing. (Round your intermediate calculations to 2 decimal places.) |
| c. |
Reconcile the variable costing and absorption costing net operating incomes. (Round your intermediate calculations to 2 decimal places.) |
In: Accounting
Mokunt (Pty) Ltd have the following information in their books, which they want to use for planning purposes for 2019. Quarter 1 Quarter 2 Quarter 3 Quarter 4 Budgeted Sales in units 50000 70000 90000 120000 Desired ending inventory of finished goods 10000 14000 18000 24000 Opening inventory of finished goods 7000 10000 14000 18000 Direct labour hour used per unit 0.5 0.5 0.5 0.5 Selling Price (BWP) 10 10 10 10 Direct labour cost per hour (BWP) 3 3 3 3 a. Prepare the following budgets: i. Sales budget ii. Production budget. iii. Direct labour budget iv. Give five kinds of costs that you learnt in this course.
In: Accounting
Sales Forecasts for the first quarter of 2018: January 11 000 units February 13 000 units March 14 000 units. Unit selling price $100 Prepare the Sales Budget for Jan, Feb, and March. In addition to the info in problem #1, the company requires jan 20% of next month's budgeted sales as ending finished goods feb inventory each month. Ending inventory for 12/31/17 was mar 2,200 units. The Sales forecast for April is 20,000 units.
In: Accounting
Milden Company is a merchandiser that plans to sell 25,000 units during the next quarter at a selling price of $52 per unit. The company also gathered the following cost estimates for the next quarter:
| Cost | Cost Formula | ||
| Cost of good sold | $22 per unit sold | ||
| Advertising expense | $172,000 per quarter | ||
| Sales commissions | 5% of sales | ||
| Shipping expense | $54,000 per quarter + $6.00 per unit sold | ||
| Administrative salaries | $82,000 per quarter | ||
| Insurance expense | $9,200 per quarter | ||
| Depreciation expense | $52,000 per quarter | ||
Required:
1. Prepare a contribution format income statement for the next quarter.
2. Prepare a traditional format income statement for the next quarter.
Prepare a contribution format income statement for the next quarter.
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In: Accounting