8. Substitutes, complements, or unrelated? You work for a marketing firm that has just landed a contract with Run-of-the-Mills to help them promote three of their products: penguin patties, flopsicles, and mookies. All of these products have been on the market for some time, but, to entice better sales, Run-of-the-Mills wants to try a new advertisement that will market two of the products that consumers will likely consume together. As a former economics student, you know that complements are typically consumed together while substitutes can take the place of other goods. Run-of-the-Mills provides your marketing firm with the following data: When the price of penguin patties decreases by 5%, the quantity of flopsicles sold increases by 4% and the quantity of mookies sold decreases by 6%. Your job is to use the cross-price elasticity between penguin patties and the other goods to determine which goods your marketing firm should advertise together. Complete the first column of the following table by computing the cross-price elasticity between penguin patties and flopsicles, and then between penguin patties and mookies. In the second column, determine if penguin patties are a complement to or a substitute for each of the goods listed. Finally, complete the final column by indicating which good you should recommend marketing with penguin patties. Relative to Penguin Patties Recommend Marketing with Penguin Patties Cross-Price Elasticity of Demand Complement or Substitute Flopsicles Mookies

Patel and Sons Inc. uses a standard cost system to apply factory overhead costs to units produced. Practical capacity for the plant is defined as 50,000 machine hours per year, which represents 25,000 units of output. Annual budgeted fixed factory overhead costs are $250,000 and the budgeted variable factory overhead cost rate is $4 per unit. Factory overhead costs are applied on the basis of standard machine hours allowed for units produced. Budgeted and actual output for the year was 20,000 units, which took 41,000 machine hours. Actual fixed factory overhead costs for the year amounted to $245,000, while the actual variable overhead cost per unit was $3.90.

Based on the information provided above, provide an appropriate end-of-year closing entry for each of the following two independent situations: (a) the net factory overhead cost variance is closed entirely to Cost of Goods Sold (CSG), and (b) the net factory overhead variance is allocated among WIP Inventory, Finished Goods Inventory, and CGS using the following percentages: 10%, 20%, and 70%, respectively. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Record the net variance closed to cost of goods sold.

Record the net variance allocated to ending inventories and Cost of goods sold.

Patel and Sons Inc. uses a standard cost system to apply factory overhead costs to units produced. Practical capacity for the plant is defined as 50,000 machine hours per year, which represents 25,000 units of output. Annual budgeted fixed factory overhead costs are $250,000 and the budgeted variable factory overhead cost rate is $4 per unit. Factory overhead costs are applied on the basis of standard machine hours allowed for units produced. Budgeted and actual output for the year was 20,000 units, which took 41,000 machine hours. Actual fixed factory overhead costs for the year amounted to $245,000, while the actual variable overhead cost per unit was $3.90.

Based on the information provided above, provide an appropriate end-of-year closing entry for each of the following two independent situations: (a) the net factory overhead cost variance is closed entirely to Cost of Goods Sold (CSG), and (b) the net factory overhead variance is allocated among WIP Inventory, Finished Goods Inventory, and CGS using the following percentages: 10%, 20%, and 70%, respectively. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Record the net variance closed to cost of goods sold.

Record the net variance allocated to ending inventories and Cost of goods sold.

1. Ella Company had 160 units in beginning inventory at a total cost of $320. The company purchased 400 units at a total cost of $1,500. At the end of the year, Ella had 120 units in ending inventory

Beginning 160 units ($2.00) $ 320

Purchases 500 units ($3.00) 1,500

Cost of goods available for sale $1,820

A physical count of ending inventory on June 30 reveals that there are 100 units on hand.

REQUIREMENTS:

Calculate the cost of ending inventory and the cost of goods sold under FIFO, LIFO, and Average Cost. Answer the three questions below.

1. SHOW WORK - Calculate the amount allocated to ending inventory as of June 30 using:
   1. FIFO
   2. LIFO
   3. Average Cost

1. SHOW WORK - Calculate the amount allocated to cost of goods sold for the month of June using:
   1. FIFO
   2. LIFO
   3. Average Cost

1. Which inventory cost method would result in the highest net income?

1. Which inventory cost method would result in inventories approximating current cost on the balance sheet?

1. Which inventory cost method would result in Ella paying the least taxes in the first year?

1. The following information is available for Manning Company:

Beginning inventory $ 120,000Cost of goods sold 550,000Ending inventory 140,000Sales 750,000

InstructionsSHOW WORK - Compute each of the following: (a) Inventory turnover. (b) Days in inventory

(c) EXPLAIN WHAT EACH RATIOS MEAN IN WORDS

5. Substitutes, complements, or unrelated?

You work for a marketing firm that has just landed a contract with Run-of-the-Mills to help them promote three of their products: splishy splashies, frizzles, and mookies. All of these products have been on the market for some time, but, to entice better sales, Run-of-the-Mills wants to try a new advertisement that will market two of the products that consumers will likely consume together. As a former economics student, you know that complements are typically consumed together while substitutes can take the place of other goods.

Run-of-the-Mills provides your marketing firm with the following data: When the price of splishy splashies increases by 5%, the quantity of frizzles sold decreases by 4% and the quantity of mookies sold increases by 5%. Your job is to use the cross-price elasticity between splishy splashies and the other goods to determine which goods your marketing firm should advertise together.

Complete the first column of the following table by computing the cross-price elasticity between splishy splashies and frizzles, and then between splishy splashies and mookies. In the second column, determine if splishy splashies are a complement to or a substitute for each of the goods listed. Finally, complete the final column by indicating which good you should recommend marketing with splishy splashies.

Required information

[The following information applies to the questions displayed below.]

Patel and Sons Inc. uses a standard cost system to apply factory overhead costs to units produced. Practical capacity for the plant is defined as 50,000 machine hours per year, which represents 25,000 units of output. Annual budgeted fixed factory overhead costs are $250,000 and the budgeted variable factory overhead cost rate is $4 per unit. Factory overhead costs are applied on the basis of standard machine hours allowed for units produced. Budgeted and actual output for the year was 20,000 units, which took 41,000 machine hours. Actual fixed factory overhead costs for the year amounted to $245,000, while the actual variable overhead cost per unit was $3.90.

Based on the information provided above, provide an appropriate end-of-year closing entry for each of the following two independent situations: (a) the net factory overhead cost variance is closed entirely to Cost of Goods Sold (CSG), and (b) the net factory overhead variance is allocated among WIP Inventory, Finished Goods Inventory, and CGS using the following percentages: 10%, 20%, and 70%, respectively. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

• 1

  Record the net variance closed to cost of goods sold.

• 2

  Record the net variance allocated to ending inventories and Cost of goods sold.

A simplified income statement for ABC firm (in million dollars):

Key fact: Purchases are 80% of COGS

1) Besides reducing operating expenses, please identify two other means to improve the bottom line (i.e., to increase the operating income)?

Now, let’s perform a what-if analysis. In the first scenario, we analyze how an 8% reduction in the cost of purchased goods would impact operating profit?

2) How much is the current cost of purchased goods?

3) How much is the saving associated with an 8% reduction in cost of purchases?

4) Fill in the following income statement, reflecting 8% reduction in cost of purchases

5) Based on the income statement table you computed above, a dollar saved in COGS translates into ________dollar (s) increase in operating income.

6). Based on the income statement table you computed above, an 8% reduction in cost of purchases can lead to ____________% increase in operating income.

Please show work!!

During Durton Company’s first two years of operations, the company reported absorption costing operating income as shown below. Production and cost data for the two years are given:

*$3 per unit variable; $250,000 fixed each year.

The company’s $34 unit product cost is computed as follows:

Required:

1. Prepare a variable costing income statement for each year in the contribution format.

2. Reconcile the absorption costing and variable costing operating income figures for each year. (Loss amounts should be indicated by a minus sign.)

Absorption and Variable Costing Income Statements for Two Months and Analysis

During the first month of operations ended July 31, Head Gear Inc. manufactured 28,200 hats, of which 26,200 were sold. Operating data for the month are summarized as follows:

During August, Head Gear Inc. manufactured 24,200 hats and sold 26,200 hats. Operating data for August are summarized as follows:

Required:

1a. Prepare income statement for July using the absorption costing concept.

1b. Prepare income statement for August using the absorption costing concept.

Variable Costing, Absorption Costing.

During its first year of operations, Snobegon, Inc. (located in Lake Snobegon, Minnesota), produced 40,800 plastic snow scoops. Snow scoops are oversized shovel-type scoops that are used to push snow away. Unit sales were 38,100 scoops. Fixed overhead was applied at $0.70 per unit produced. Fixed overhead was underapplied by $2,700. This fixed overhead variance was closed to Cost of Goods Sold. There was no variable overhead variance. The results of the year’s operations are as follows (on an absorption-costing basis):

Sales (38,100 units @ $20) $762,000

Less: Cost of goods sold 549,960

Gross margin $212,040

Less: Selling and administrative expenses (all fixed) 184,500

Operating income $ 27,540

Required:

1. Calculate the cost of the firm’s ending inventory under absorption costing. Round unit cost to five decimal places. Round your final answer to the nearest dollar. $

What is the cost of the ending inventory under variable costing? Round unit cost to five decimal places. Round your final answer to the nearest dollar. $

2. Prepare a variable-costing income statement. Round the unit cost to five decimal places, when required. Round your final answers to the nearest dollar. Use the rounded values in subsequent computations.

Snobegon, Inc. Variable-Costing Income Statement For the First Year of Operations

Sales $

Less: Variable cost of goods sold Contribution margin $

Less: Fixed overhead

Fixed selling and administrative expenses

Operating income $

What is the difference between the two income figures? $

Could you please help me out ASAP! Thankyou