The Johnson Company manufactures designer blankets for international distribution. The standard costs for the manufacturer of these high-quality blankets are:
Standard Costs Actual Costs
Direct Materials 4,000 pounds at $42 4,300 pounds at $40
Direct Labor 5,200 hours at $15 5,500 hours at $14
Instructions:
In: Accounting
1–5 What effect does an increase in the activity level have on—
a. Average fixed costs per unit?
b. Variable costs per unit?
c. Total fixed costs?
d. Total variable costs?
1–6 Define the following terms: (a) cost behavior and (b) relevant range.
1–7 What is meant by an activity base when dealing with variable costs? Give several
examples of activity bases.
1–8 Managers often assume a strictly linear relationship between cost and the level of activity.
Under what conditions would this be a valid or invalid assumption?
In: Accounting
FIFO and LIFO Costs Under Perpetual Inventory System
The following units of an item were available for sale during the year:
| Beginning inventory | 31 units at $42 |
| Sale | 24 units at $63 |
| First purchase | 39 units at $44 |
| Sale | 37 units at $64 |
| Second purchase | 28 units at $46 |
| Sale | 7 units at $65 |
The firm uses the perpetual inventory system, and there are 30 units of the item on hand at the end of the year.
a. What is the total cost of the ending
inventory according to FIFO?
$
b. What is the total cost of the ending
inventory according to LIFO?
$
In: Accounting
FIFO and LIFO Costs Under Perpetual Inventory System
The following units of an item were available for sale during the year:
| Beginning inventory | 8,100 units at $180 |
| Sale | 5,300 units at $300 |
| First purchase | 15,000 units at $185 |
| Sale | 13,000 units at $300 |
| Second purchase | 16,000 units at $192 |
| Sale | 14,000 units at $300 |
The firm uses the perpetual inventory system, and there are 6,800 units of the item on hand at the end of the year.
a. What is the total cost of the ending
inventory according to FIFO?
$
b. What is the total cost of the ending inventory according to LIFO?
In: Accounting
Ceasar pants standard cost included 0.70 metres of direct material per pants at $3.80 per metre. Ceasar actually used 32,500 metres of direct material at a cost of $3.75 per metre to produce 50,000 pants.
a) Calculate the direct materials price variance: $ Answer
b) Is the direct materials price variance favourable or unfavourable?
c) Calculate the direct materials quantity variance: $ Answer
d) Is the direct materials quantity variance favourable or unfavourable?
e) Calculate the total direct materials variance: $ Answer
f) Is the total direct materials variance favourable or unfavourable?
In: Accounting
FIFO and LIFO Costs Under Perpetual Inventory System
The following units of an item were available for sale during the year:
| Beginning inventory | 24 units at $46 |
| Sale | 12 units at $74 |
| First purchase | 26 units at $48 |
| Sale | 25 units at $74 |
| Second purchase | 14 units at $51 |
| Sale | 13 units at $74 |
The firm uses the perpetual inventory system, and there are 14 units of the item on hand at the end of the year.
a. What is the total cost of the ending
inventory according to FIFO?
$
b. What is the total cost of the ending
inventory according to LIFO?
$
In: Accounting
FIFO and LIFO Costs Under Perpetual Inventory System
The following units of an item were available for sale during the year:
| Beginning inventory | 47 units at $44 |
| Sale | 16 units at $62 |
| First purchase | 24 units at $47 |
| Sale | 30 units at $62 |
| Second purchase | 19 units at $50 |
| Sale | 10 units at $62 |
The firm uses the perpetual inventory system, and there are 34 units of the item on hand at the end of the year.
a. What is the total cost of the ending
inventory according to FIFO?
$
b. What is the total cost of the ending
inventory according to LIFO?
$
In: Accounting
Tatum Company has four products in its inventory. Information
about December 31, 2018, inventory is as follows:
| Tatum Company Product | Total Cost | Total Net Realizable Value |
| 101 | 120,000.00 | 100,00.00 |
| 102 | 90,000.00 | 110,000.00 |
| 103 | 60,000.00 | 50,000.00 |
| 104 | 30,000.00 | 50,000.00 |
Assignment:
In: Accounting
FIFO and LIFO Costs Under Perpetual Inventory System
The following units of a particular item were available for sale during the year:
| Beginning inventory | 43 units @ $48 |
| Sale | 37 units @ $70 |
| First purchase | 31 units @ $50 |
| Sale | 28 units @ $71 |
| Second purchase | 20 units @ $51 |
| Sale | 15 units @ $71 |
The firm uses the perpetual inventory system, and there are 14 units of the item on hand at the end of the year.
a. What is the total cost of the ending
inventory according to FIFO?
$
b. What is the total cost of the ending
inventory according to LIFO?
$
In: Accounting
WayFast Company has just opened a new plant to produce a folding camp cot. Below are the data obtained during the first month of the plant’s operation in April:
Units produced 1,000
Units sold 800
Unit selling price $200
Unit variable selling expense $4
Total fixed selling expense $24,000
Unit direct materials cost $35
Unit direct labour cost $27
Unit variable MOH $6
Total fixed MOH $20,000
How much is the net income under variable costing in April compared with that under absorption costing?
In: Accounting