High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant’s operation:
| Beginning inventory | 0 | |
| Units produced | 36,000 | |
| Units sold | 31,000 | |
| Selling price per unit | $ | 79 |
| Selling and administrative expenses: | ||
| Variable per unit | $ | 3 |
| Fixed (per month) | $ | 564,000 |
| Manufacturing costs: | ||
| Direct materials cost per unit | $ | 14 |
| Direct labor cost per unit | $ | 9 |
| Variable manufacturing overhead cost per unit | $ | 3 |
| Fixed manufacturing overhead cost (per month) | $ | 684,000 |
Management is anxious to assess the profitability of the new camp cot during the month of May.
Required:
1. Assume that the company uses absorption costing.
a. Determine the unit product cost.
b. Prepare an income statement for May.
2. Assume that the company uses variable costing.
a. Determine the unit product cost.
b. Prepare a contribution format income statement for May.
In: Accounting
|
High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant’s operation: |
| Beginning inventory | 0 | |
| Units produced | 43,000 | |
| Units sold | 38,000 | |
| Selling price per unit | $79 | |
| Selling and administrative expenses: | ||
| Variable per unit | $3 | |
| Fixed per month | $ | 565,000 |
| Manufacturing costs: | ||
| Direct materials cost per unit | $17 | |
| Direct labor cost per unit | $9 | |
| Variable manufacturing overhead cost per unit | $3 | |
| Fixed manufacturing overhead cost per month | $ | 731,000 |
|
Management is anxious to see how profitable the new camp cot will be and has asked that an income statement be prepared for May. |
| Required: |
| 1. | Assume that the company uses absorption costing. |
| a. | Determine the unit product cost. |
| b. |
Prepare an income statement for May. |
| 2. | Assume that the company uses variable costing. |
| a. | Determine the unit product cost. |
| b. |
Prepare a contribution format income statement for May. |
In: Accounting
High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant’s operation:
| Beginning inventory | 0 | |
| Units produced | 35,000 | |
| Units sold | 30,000 | |
| Selling price per unit | $ | 77 |
| Selling and administrative expenses: | ||
| Variable per unit | $ | 3 |
| Fixed (per month) | $ | 569,000 |
| Manufacturing costs: | ||
| Direct materials cost per unit | $ | 16 |
| Direct labor cost per unit | $ | 8 |
| Variable manufacturing overhead cost per unit | $ | 3 |
| Fixed manufacturing overhead cost (per month) | $ | 700,000 |
Management is anxious to assess the profitability of the new camp cot during the month of May.
Required:
1. Assume that the company uses absorption costing.
a. Determine the unit product cost.
b. Prepare an income statement for May.
2. Assume that the company uses variable costing.
a. Determine the unit product cost.
b. Prepare a contribution format income statement for May.
In: Accounting
High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant’s operation:
| Beginning inventory | 0 | |
| Units produced | 39,000 | |
| Units sold | 34,000 | |
| Selling price per unit | $ | 82 |
| Selling and administrative expenses: | ||
| Variable per unit | $ | 3 |
| Fixed (per month) | $ | 557,000 |
| Manufacturing costs: | ||
| Direct materials cost per unit | $ | 15 |
| Direct labor cost per unit | $ | 6 |
| Variable manufacturing overhead cost per unit | $ | 3 |
| Fixed manufacturing overhead cost (per month) | $ | 741,000 |
Management is anxious to assess the profitability of the new camp cot during the month of May.
Required:
1. Assume that the company uses absorption costing.
a. Determine the unit product cost.
b. Prepare an income statement for May.
2. Assume that the company uses variable costing.
a. Determine the unit product cost.
b. Prepare a contribution format income statement for May.
In: Accounting
High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant’s operation:
| Beginning inventory | 0 | |
| Units produced | 41,000 | |
| Units sold | 36,000 | |
| Selling price per unit | $ | 80 |
| Selling and administrative expenses: | ||
| Variable per unit | $ | 3 |
| Fixed (per month) | $ | 568,000 |
| Manufacturing costs: | ||
| Direct materials cost per unit | $ | 14 |
| Direct labor cost per unit | $ | 7 |
| Variable manufacturing overhead cost per unit | $ | 3 |
| Fixed manufacturing overhead cost (per month) | $ | 738,000 |
Management is anxious to assess the profitability of the new camp cot during the month of May.
Required:
1. Assume that the company uses absorption costing.
a. Determine the unit product cost.
b. Prepare an income statement for May.
2. Assume that the company uses variable costing.
a. Determine the unit product cost.
b. Prepare a contribution format income statement for May.
In: Accounting
High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant’s operation:
| Beginning inventory | 0 | |
| Units produced | 38,000 | |
| Units sold | 33,000 | |
| Selling price per unit | $ | 83 |
| Selling and administrative expenses: | ||
| Variable per unit | $ | 3 |
| Fixed (per month) | $ | 556,000 |
| Manufacturing costs: | ||
| Direct materials cost per unit | $ | 18 |
| Direct labor cost per unit | $ | 6 |
| Variable manufacturing overhead cost per unit | $ | 3 |
| Fixed manufacturing overhead cost (per month) | $ | 722,000 |
Management is anxious to assess the profitability of the new camp cot during the month of May.
Required:
1. Assume that the company uses absorption costing.
a. Determine the unit product cost.
b. Prepare an income statement for May.
2. Assume that the company uses variable costing.
a. Determine the unit product cost.
b. Prepare a contribution format income statement for May.
In: Accounting
High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant’s operation:
| Beginning inventory | 0 | |
| Units produced | 41,000 | |
| Units sold | 36,000 | |
| Selling price per unit | $ | 77 |
| Selling and administrative expenses: | ||
| Variable per unit | $ | 3 |
| Fixed (per month) | $ | 562,000 |
| Manufacturing costs: | ||
| Direct materials cost per unit | $ | 17 |
| Direct labor cost per unit | $ | 8 |
| Variable manufacturing overhead cost per unit | $ | 3 |
| Fixed manufacturing overhead cost (per month) | $ | 779,000 |
Management is anxious to assess the profitability of the new camp cot during the month of May.
Required:
1. Assume that the company uses absorption costing.
a. Determine the unit product cost.
b. Prepare an income statement for May.
2. Assume that the company uses variable costing.
a. Determine the unit product cost.
b. Prepare a contribution format income statement for May.
In: Accounting
High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant’s operation:
| Beginning inventory | 0 | |
| Units produced | 41,000 | |
| Units sold | 36,000 | |
| Selling price per unit | $ | 77 |
| Selling and administrative expenses: | ||
| Variable per unit | $ | 3 |
| Fixed (per month) | $ | 567,000 |
| Manufacturing costs: | ||
| Direct materials cost per unit | $ | 15 |
| Direct labor cost per unit | $ | 6 |
| Variable manufacturing overhead cost per unit | $ | 3 |
| Fixed manufacturing overhead cost (per month) | $ | 656,000 |
Management is anxious to assess the profitability of the new camp cot during the month of May.
Required:
1. Assume that the company uses absorption costing.
a. Determine the unit product cost.
b. Prepare an income statement for May.
2. Assume that the company uses variable costing.
a. Determine the unit product cost.
b. Prepare a contribution format income statement for May.
In: Accounting
High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant’s operation:
| Beginning inventory | 0 | |
| Units produced | 42,000 | |
| Units sold | 37,000 | |
| Selling price per unit | $ | 80 |
| Selling and administrative expenses: | ||
| Variable per unit | $ | 3 |
| Fixed (per month) | $ | 561,000 |
| Manufacturing costs: | ||
| Direct materials cost per unit | $ | 16 |
| Direct labor cost per unit | $ | 9 |
| Variable manufacturing overhead cost per unit | $ | 3 |
| Fixed manufacturing overhead cost (per month) | $ | 798,000 |
Management is anxious to assess the profitability of the new camp cot during the month of May.
Required:
1. Assume that the company uses absorption costing.
a. Determine the unit product cost.
b. Prepare an income statement for May.
2. Assume that the company uses variable costing.
a. Determine the unit product cost.
b. Prepare a contribution format income statement for May.
In: Accounting
The income statement and additional data of Bayleaf Pty Ltd are as follows:
Income statement for the year ended 31 December 2016
Revenue:
Service Revenue R225 000
Dividend Revenue R6 300 (231 300)
Expenses:
Cost of goods sold R100 000
Salary Expense R52 000
Depreciation Expense R23 000
Advertising Expense R2 300
Interest Expense R2 400
Income tax expense R5 000 (R184 700)
Net income R46 600
Additional Data:
a) Acquisition of PPE was R170 000. Of this amount , R140 000 was paid in cash and R30 000 by signing a note payable
b) Proceeds from the sale of land totalled R48 000
c) Proceeds from issuance of shares totalled R31 000
d) Payment of long-term note payable was R16 000
e) Payment of dividends was R10 000
From the Balance Sheet:
Balance sheet as at 31 December
Currents Assets 2016 2015
Cash R32 000 R13 300
Accounts Receivable R41 000 R57 000
Inventory R48 000 R87 000
Prepaid expenses R9 100 R8 200
Current Liabilities
Accounts Payable R32 000 R17 000
Accrued liabilities R14 000 R43 000
Required:
1. Prepare Bayleaf 's statement of cash flow for year ended 31 December 2016, using indirect Method.
2. Evaluate Bayleaf's cash flow for the year ended 31 December 2016, including its free cash flow and cash realization ratio. In your evaluation, review all three categories of cash flows and give the reason for your evaluation.
3. When analyzing the cash flow patterns of the Company, what other three (3) important indicators of the health of the company 's cash flows do you look at?
In: Accounting