Financial And Managerial Accounting
15th Edition
ISBN: 9781337902663
Author: WARREN, Carl S.
Publisher: Cengage Learning,
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Question
Chapter 16, Problem 5PA
(1)
To determine
Prepare annual income statement of Company G.
(2)
To determine
Compute the ending balance, December 31 20Y8, in the work in process and finished goods inventories.
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Ginocera Inc. is a designer, manufacturer, and distributor of low-cost, high-quality stainless steel kitchen knives. A new kitchen knife series called the Kitchen Ninja was released for production in early 20Y8. In January, the company spent $600,000 to develop a late-night advertising infomercial for the new product. During 20Y8, the company spent $1,400,000 advertising the product through these infomercials. In addition, the company incurred $800,000 in legal costs. The knives were ready for manufacture on January 1, 20Y8.
Ginocera uses a job order cost system to accumulate costs associated with the kitchen knife. The unit direct materials cost for the knife is as follows:
Hardened steel blanks
(used for knife shaft and blade)
$4.00
Wood (for handle)
1.50
Packaging
0.50
The production process is straightforward. First, the hardened steel blanks, which are purchased directly from a raw material supplier, are stamped into a single piece…
Mirabella Beauty manufactures and sells a face cream to small specialty stores in the greater Los Angeles area. It presents the monthly operating income statement shown here to George Lupe, a potential investor in the business. Help Mr. Lupe understand Mirabella Beauty's cost structure.
Mirabella Beauty
Operating Income Statement, June 2020
Units sold $10,000
Revenues $200,000
Cost of goods sold
Variable manufacturing costs $70,000 Fixed manufacturing costs $32,900 Total 102,900
Gross margin 97,100
Operating costs
Variable marketing costs $58,000 Fixed marketing and administrative costs 17,500 Total operating costs 75,500
Operating income $21,600
Recast the income statement to emphasize contribution margin.
Calculate the contribution margin percentage and breakeven point in units and revenues for June2020.
What is the margin of safety (in units) for June 2020?
If sales in June were only 8,500 units and Mirabella's tax rate is 30%, calculate its net income.
Lean Accounting
Westgate Inc. uses a lean manufacturing strategy to manufacture DVR (digital video recorder) players. The company manufactures DVR players through a single product cell. The
budgeted conversion cost for the year is $706,200 for 2,140 production hours. Each unit requires 12 minutes of cell process time. During March, 960 DVR players were manufacture
the cell. The materials cost per unit is $66. The following summary transactions took place during March:
1. Materials were purchased for March production.
2. Conversion costs were applied to production.
3.960 DVR players were assembled and placed in finished goods.
4.910 DVR players were sold for $234 per unit.
a. Determine the budgeted cell conversion cost per hour. If required, round to the nearest dollar.
per hour
b. Determine the budgeted cell conversion cost per unit. If required, round to the nearest dollar.
per unit
Chapter 16 Solutions
Financial And Managerial Accounting
Ch. 16 - A. Name two principal types of cost accounting...Ch. 16 - What kind of firm would use a job order cost...Ch. 16 - Prob. 3DQCh. 16 - Prob. 4DQCh. 16 - What is a job cost sheet?Ch. 16 - Prob. 6DQCh. 16 - Discuss how the predetermined factory overhead...Ch. 16 - A. How is a predetermined factory overhead rate...Ch. 16 - A. What is (1) overapplied factory overhead and...Ch. 16 - Describe how a job order cost system can be used...
Ch. 16 - Issuance of materials On May 7, Bergan Company...Ch. 16 - Direct labor costs During May, Bergan Company...Ch. 16 - Factory overhead costs During May, Bergan Company...Ch. 16 - Applying factory overhead Bergan Company estimates...Ch. 16 - Job costs At the end of May, Bergan Company had...Ch. 16 - Cost of goods sold Pine Creek Company completed...Ch. 16 - Transactions in a job order cost system Five...Ch. 16 - The following information is available for the...Ch. 16 - Cost of materials issuances under the FIFO method...Ch. 16 - Prob. 4ECh. 16 - Kingsford Furnishings Company manufactures...Ch. 16 - A summary of the time tickets is as follows:...Ch. 16 - Entry for factory labor costs The weekly time...Ch. 16 - Schumacher Industries Inc. manufactures...Ch. 16 - Eclipse Solar Company operates two factories. The...Ch. 16 - Exotic Engine Shop uses a job order cost system to...Ch. 16 - Predetermined factory overhead rate Obj. 2...Ch. 16 - The following account appears in the ledger prior...Ch. 16 - Collegiate Publishing Inc. began printing...Ch. 16 - The following events took place for Rushmore...Ch. 16 - Job order cost accounting for a service company...Ch. 16 - Job order cost accounting for a service company...Ch. 16 - Barnes Company uses a job order cost system. The...Ch. 16 - Entries and schedules for unfinished jobs and...Ch. 16 - Job cost sheet Remnant Carpet Company sells and...Ch. 16 - Analyzing manufacturing cost accounts Fire Rock...Ch. 16 - Prob. 5PACh. 16 - Entries for costs in a job order cost system Royal...Ch. 16 - Entries and schedules for unfinished jobs and...Ch. 16 - Job cost sheet Stretch and Trim Carpet Company...Ch. 16 - Analyzing manufacturing cost accounts Clapton...Ch. 16 - Prob. 5PBCh. 16 - Antolini Enterprises produces mens sports coats...Ch. 16 - Alvarez Manufacturing Inc. is a job shop. The...Ch. 16 - Raneri Trophies Inc. uses a job order cost system...Ch. 16 - Brady Furniture Company manufactures wooden oak...Ch. 16 - Ethics in Action TAC Industries Inc. sells heavy...Ch. 16 - Team Activity As an assistant cost accountant for...Ch. 16 - Prob. 3TIFCh. 16 - RIRA Company makes attachments such as backhoes...Ch. 16 - Todd Lay just began working as a cost accountant...Ch. 16 - Baldwin Printing Company uses a job order cost...Ch. 16 - John Sheng, a cost accountant at Starlet Company,...Ch. 16 - Lucy Sportswear manufactures a specialty line of...Ch. 16 - Patterson Corporation expects to incur 70,000 of...
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