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“Kosco Corporation Income StatementþAbsorption Costing For the Month Ended March 31, 19×4 Sales (2,400 units) $48,000 Cost of goods sold: Beginning Inventory $ 1,000 Variable Cost of Goods Manufactured 25,000 Goods Available for Sale $26,000 Ending Inventory 2,000 Cost of Goods Sold 24,000 Gross Margin 24,000 Less Operating Expenses: Fixed Administrative Expense $7,200 Variable Selling Expense 9,600 Total Operating Expenses 16,800 Net Income $ 7,200 ÍÍÍÍÍÍÍ During March, the company’s variable production costs were $8 per unit and its fixed manufacturing overhead totaled $5,000. 87. The contribution margin per unit during March was a. $8 b. $12 c. $10 d. $3”,”1The contribution margin per unit during March:Selling price per unit (48
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Read more“The Madison Company produces three products with the following costs and selling prices: Product A B C Selling price per unit $15 $20 $20 Variable cost per unit 8 10 12 Contribution margin per unit $ 7 $10 $ 8 Direct labor hours per unit 1 1.5 2 Machine hours per unit 3.5 2 2.5 103. If Madison has a limit of 15,000 machine hours but no limit on units produced or direct labor hours, then the three products should be produced in the order: a. A, B, C. b. B, C, A. c. A, C, B. d. C, A, B.”,”2. The three products should be produced in the order:Contribution Margin per Machine Hour: A = 15 / 3.5 = 4.29 B = 20 / 2 = 10 C = 20 / 2.5 = 8The three products should be produced in the order: B,C
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Read more“Kaufmann Company recorded the following data for the month of January, 19X5: Inventories 1/1/X5 1/31/X5 Raw Materials 22,000 21,000 Work in process 16,000 13,000 Finished goods 20,000 25,000 Additional data: Sales revenue $200,000 Direct labor costs 30,000 Manufacturing overhead costs 70,000 Selling expenses 15,000 Administrative expenses 25,00072. If raw materials costing $25,000 were purchased during January, the total manufacturing costs for the month would be: a. $124,000 b. $126,000 c. $125,000 d. $128,000”,”2Total Manufacturing Costs for the month:RM (22000 + 25000 – 21,000) 26,000DL 30,000MOH 70,000 $126
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Read more“Kosco Corporation Income StatementþAbsorption Costing For the Month Ended March 31, 19×4 Sales (2,400 units) $48,000 Cost of goods sold: Beginning Inventory $ 1,000 Variable Cost of Goods Manufactured 25,000 Goods Available for Sale $26,000 Ending Inventory 2,000 Cost of Goods Sold 24,000 Gross Margin 24,000 Less Operating Expenses: Fixed Administrative Expense $7,200 Variable Selling Expense 9,600 Total Operating Expenses 16,800 Net Income $ 7,200 ÍÍÍÍÍÍÍ During March, the company’s variable production costs were $8 per unit and its fixed manufacturing overhead totaled $5,000. 88. The break-even point in units for the month would be a. 600 units. b. 900 units. c. 1,017 units. d. 1,525 units.”,”4The break-even point in units:Total fixed costs = 5,000 + 7,000 = $12,200Break-even point in units = Total fixed costs = 12,200 = 1
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Read more“Evans Company is considering rebuilding and selling used alternators for automobiles. The company estimates that the net cash flows (sales less cash operating expenses) arising from the rebuilding and sale of the used alternators would be as follows (numbers in parentheses indicate an outflow): Years 1-10 $100,000 Year 11 (30,000) Year 12 110,000 Evans Company would purchase production equipment costing $275,000 now to use in the rebuilding of the alternators. The equipment would have a 12-year life and a $25,000 salvage value. The company’s cost of capital is 10%. 104. The present value of the net cash flows (sales less cash operating expenses) arising from the rebuilding and sale ofthe alternators (rounded to the nearest dollar) is: a. $602,820. b. $625,980. c. $639,090. d. $660,090.”,”3Present Value of Net Cash Flows= PV of Annuity $100,000 for 10 years at 10%- PV of 30,000 for 10 years at 10% + PV of 110,000 for 12 years= 100,000 x 6.145 = $614,500- 30,000 x 0.350 = (10,500)+ 110,000 x .319 = 35,000Total $639
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Read more“Kaufmann Company recorded the following data for the month of January, 19X5: Inventories 1/1/X5 1/31/X5 Raw Materials 22,000 21,000 Work in process 16,000 13,000 Finished goods 20,000 25,000 Additional data: Sales revenue $200,000 Direct labor costs 30,000 Manufacturing overhead costs 70,000 Selling expenses 15,000 Administrative expenses 25,00073. Assume that the cost of goods sold for January was $120,000. The net income for January would be: a. $35,000 b. $65,000 c. $55,000 d. $40,000”,”4Net Income for January: Sales $200,000 – Cost of Goods Sold 120,000 = Gross Margin 80,000 – Selling & Adm. Expenses 40,000 Net Income $ 40
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Read more“Coles Company, Inc. makes and sells a single product, Product R. Three yards of Material K are needed to make one unit of Product R. Budgeted production of Product R for the next five months is as follows: August 14,000 units September 14,500 units October 15,500 units November 12,600 units December 11,900 units The company wants to maintain monthly ending inventories of Material K equal to 20% of the following month’s production needs. On July 31, 2,500 yards of Material K were on hand. The cost of Material K is $.85 per yard. The company wants to prepare a Direct Materials Purchase Budget for the fourth quarter. 89. The total needs of Material K for the month of November are: a. 37,800 yards b. 44,940 yards c. 37,380 yards. d. 45,360 yards.”,”2Total needs of material K for the month of November: October November DecemberBudgeted production 15,500 12,600 11,900Per unit needs of K 3 3 3 Production Needs 46,500 37,800 35,700+ Desired Ending Inv. 7,560 7,140 — Beginning Inv. 7,560Total Needs of K for November 37
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Read more“Wilson Company is considering an investment in a machine costing $300,000. The machine has an estimated useful life of seven years at the end of which it will have a salvage value of $15,000. Anticipated yearly revenues associated with the machine amount to $250,000. Yearly costs amount to $150,000. Extra maintenance costs of $60,000 will be incurred at the end of the second and fourth years. 105. The present value of the $15,000 salvage value using a discount rate of 12% is: a. $15,000. b. $7,605. c. $6,780. d. $6,060.”,”3Present Value of Salvage Value: = 15000 x .452 = $6
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Read more“Kaufmann Company recorded the following data for the month of January, 19X5: Inventories 1/1/X5 1/31/X5 Raw Materials 22,000 21,000 Work in process 16,000 13,000 Finished goods 20,000 25,000 Additional data: Sales revenue $200,000 Direct labor costs 30,000 Manufacturing overhead costs 70,000 Selling expenses 15,000 Administrative expenses 25,00074. Assume that the cost of goods sold for Kaufmann Company for January was $130,000. What would be the cost of goods manufactured for the month? a. $125,000 b. $135,000 c. $130,000 d. $129,000”,”2Cost of Goods Manufactured for the month: Cost of Good Sold = Beg. Inventory Finished Goods 20,000+ Cost of Goods Manufactured ????? – Ending Inventory Finished Goods 25,000Costs of Goods Sold $130,00020,000 + ????? – 25,000 = 130,000-5,000 + ????? = 130,000????? = 135,000Cost of Goods Manufactured = 135
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