The accompanying table presents the expected cost and revenue data for the Tucker Tomato Farm. The Tuckers produce tomatoes in a greenhouse and sell them wholesale in a perfectly competitive market.

1. Fill in the firm’s marginal cost, average variable cost, average total cost, and profit schedules.(Round to two digits after the decimal point)

2. If the Tuckers are profit maximizers, how many tomatoes should they produce when the market price is $500 per ton? Indicate their profits.

3. Indicate the firm’s output level and maximum profit if the market price of tomatoes increases to $550 per ton.

4. How many units would the Tucker Tomato Farm produce if the price of tomatoes fell to $450 per ton? What would be the firm’s profits? Should the firm stay in business in the short-run? Explain.

Cost and Revenue Schedules for Tucker Tomato Farm, Inc.

Helix Corporation produces prefabricated flooring in a series of steps carried out in production departments. All of the material that is used in the first production department is added at the beginning of processing in that department. Data for May for the first production department follow:

Percent Complete

Units Materials Conversion

Work in process inventory, May 1 76,000 75 % 40 %

Work in process inventory, May 31 56,000 50 % 25 %

Materials cost in work in process inventory, May 1 $ 60,000

Conversion cost in work in process inventory, May 1 $ 17,800

Units started into production 258,000

Units transferred to the next production department 278,000

Materials cost added during May $ 408,180

Conversion cost added during May $ 256,680

Required: 1. Assume that the company uses the weighted-average method of accounting for units and costs. Determine the equivalent units for May for the first process.

Problem 1-39 (Static) Cost Data for Managerial Purposes (LO 1-3)

Imperial Devices (ID) has offered to supply the state government with one model of its security screening device at “cost plus 20 percent.” ID operates a manufacturing plant that can produce 66,000 devices per year, but it normally produces 60,000. The costs to produce 60,000 devices follow:

Based on these data, company management expects to receive $522 (= $435 × 120 percent) per monitor for those sold on this contract. After completing 500 monitors, the company sent a bill (invoice) to the government for $261,000 (= 500 monitors × $522 per monitor).

The president of the company received a call from a state auditor, who stated that the per monitor cost should be:

Therefore, the price per monitor should be $324 (= $270 × 120 percent). The state government ignored marketing costs because the contract bypassed the usual selling channels.

Required:

For each of the four situations, calculate the cost basis per device based on the information shown above. (Round intermediate calculations and final answers to 2 decimal places.)

Options:

1. Only the differential production costs could be considered as the cost basis.
2. The total cost per device for normal production of 60,000 devices could be used as the cost basis.
3. The total cost per device for production of 66,000 devices, excluding marketing costs, could be used as the cost basis.
4. The total cost per device for production of 66,000 devices, including marketing costs, could be used as the cost basis.

Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials):

Inventory balances at the beginning and end of the year were as follows:

The total manufacturing costs for the year were $675,000; the cost of goods available for sale totaled $725,000; the unadjusted cost of goods sold totaled $662,000; and the net operating income was $32,000. The company’s underapplied or overapplied overhead is closed to Cost of Goods Sold.

Required:

Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. (Hint: Prepare the income statement and schedule of cost of goods sold first followed by the schedule of cost of goods manufactured.)

Prepare an income statement for the year.

Prepare a schedule of cost of goods sold.

Prepare a schedule of cost of goods manufactured.

QUESTION 2

The board of directors of Amer Bhd is considering whether it should instruct the accounting department to change its inventory cost flow assumptions from First-in-First-out (FIFO) basis to an average costs. The following information has been extracted from the records of Amer Bhd about its products; Viral15. Amer Bhd uses perpetual inventory system and its reporting period ends on 30 June. The following information related to an inventory; Viral15:

REQUIRED:

(Round all figures to TWO (2) decimal points)

1. Calculate the cost of inventory on hand as at 30 June 2020 and the cost of sales for the year ended 30 June 2020, using:

1. the FIFO cost flow assumptions.                            
2. the moving average cost flow assumptions.                                 

Show your workings clearly by following the given format:

2. It is expected that the purchase cost of inventory will keep increasing. If Amer Bhd wants to minimize the income in order to pay least tax, suggest cost flow assumptions (FIFO or average cost) that is more relevant. Justify your answer.

Advertising department expenses of $26,700 and purchasing department expenses of $46,700 of Cozy Bookstore are allocated to operating departments on the basis of dollar sales and purchase orders, respectively. Information about the allocation bases for the three operating departments follows.

Complete the following table by allocating the expenses of the two service departments (advertising and purchasing) to the three operating departments.

Complete the spreadsheet by allocating the expenses of the two service departments (advertising and purchasing) to the three operating departments. (Amounts to be deducted should be indicated with minus sign.)

• Allocation of Exp

Scott Logan Equipment produces exercise equipment. The following schedule reveals anticipated monthly production of bicycles for the first three months of the year:

January 8,000

February 11,500

March 15,000

Scott budgets for 1.75 direct labor hours per bicycle, at an average cost of $20.00 per hour. Variable factory overhead is applied at the rate of $8.00 per direct labor hour. Fixed overhead is expected to run $80,000 per month, which includes $8,500 per month of noncash expenses related to depreciation.

Determine the total expected monthly cash outflow for labor and overhead.

Worksheet 5

Estimated monthly cash outflows for direct labor and factory overhead:

Production Report, No Beginning Inventory

Softkin Company manufactures sun protection lotion. The Mixing Department, the first process department, mixes the chemicals required for the repellant. The following data are for the current year:

Direct materials are added at the beginning of the process. Ending inventory is 90 percent complete with respect to direct labor and overhead.

Required:

Prepare a production report for the Mixing Department for the current year. If an amount is zero, enter "0".

Im not sure if the accounts are correct.

Tempo Company's fixed budget (based on sales of 10,000 units) for the first quarter reveals the following. Fixed Budget Sales (10,000 units × $203 per unit) $ 2,030,000 Cost of goods sold Direct materials $ 230,000 Direct labor 430,000 Production supplies 260,000 Plant manager salary 30,000 950,000 Gross profit 1,080,000 Selling expenses Sales commissions 80,000 Packaging 150,000 Advertising 100,000 330,000 Administrative expenses Administrative salaries 80,000 Depreciation—office equip. 50,000 Insurance 20,000 Office rent 30,000 180,000 Income from operations $ 570,000 (1) Compute the total variable cost per unit. (2) Compute the total fixed costs. (3) Compute the income from operations for sales volume of 8,000 units. (4) Compute the income from operations for sales volume of 12,000 units.

Compute the total variable cost per unit.

• Compute the total fixed costs.

  	Total fixed costs

Compute the income from operations for sales volume of 8,000 units.

Compute the income from operations for sales volume of 12,000 units.