Exercise 12-12A (Algo) How the allocation of fixed cost affects a pricing decision LO 12-3 Vernon Manufacturing Company expects to make 30,600 chairs during the Year 1 accounting period. The company made 4,200 chairs in January. Materials and labor costs for January were $17,700 and $25,000, respectively. Vernon produced 1,900 chairs in February. Material and labor costs for February were $8,300 and $12,800, respectively. The company paid the $612,000 annual rental fee on its manufacturing facility on January 1, Year 1. The rental fee is allocated based on the total estimated number of units to be produced during the year. Required Assuming that Vernon desires to sell its chairs for cost plus 50 percent of cost, what price should be charged for the chairs produced in January and February? Note: Round intermediate calculations and final answers to 2 decimal places.
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- Appendix Absorption costing income statement On June 30, the end of the first month of operations, Tudor Manufacturing Co. prepared the following income statement, based on the variable existing concept: Sales (420,000 units) 7,450,000 Variable cost of goods sold: Variable cost of goods manufactured (500,000 units x 14 per unit) 7,000,000 Less ending inventory (80,000 units x 14 per unit) 1,120,000 Variable cost of goods sold 5,880,000 Manufacturing margin 1,570,000 Variable selling and administrative expenses 80,000 Contribution margin 1,490,000 Fixed costs: Fixed manufacturing costs 160,000 Fixed selling and administrative expenses 75,000 235,000 Income from operations 1,255,000 a. Prepare an absorption costing income statement. b. Reconcile the variable costing income from operations of 1,255,000 with the absorption costing income from operations determined in (a).QS 23-18 (Algo) Pricing using variable GoSnow sells snowboards. Each snowboard requires direct materials of $134, direct labor of $47, variable overhead of $57, and variable selling, general, and administrative costs of $22. The company has fixed overhead costs of $277,000 and fixed selling, general, and administrative costs of $347,000. The company has a target profit of $416,000. It expects to produce and sell 10,000 snowboards. Compute the selling price per unit using the variable Cost method. (Round your intermediate calculations and final answer to nearest whole dollar amounts.) Selling price $ 342 per unitExercise 4-11A (Algo) How the allocation of fixed cost affects a pricing decision LO 4-3 Benson Manufacturing Company expects to make 30,100 chairs during the Year 1 accounting period. The company made 4,500 chairs in January. Materials and labor costs for January were $17,300 and $24,300, respectively. Benson produced 2,100 chairs in February. Material and labor costs for February were $9,400 and $12,700, respectively. The company paid the $421,400 annual rental fee on its manufacturing facility on January 1, Year 1. The rental fee is allocated based on the total estimated number of units to be produced during the year. Required Assuming that Benson desires to sell its chairs for cost plus 20 percent of cost, what price should be charged for the chairs produced in January and February? Note: Round intermediate calculations and final answers to 2 decimal places. January Price per unit February
- Exercise 12-12A (Algo) How the allocation of fixed cost affects a pricing decision LO 12-3 Jordan Manufacturing Co. expects to make 31,000 chairs during the year 1 accounting period. The company made 4,100 chairs in January. Materials and labor costs for January were $17,600 and $24,700, respectively. Jordan produced 1,100 chairs in February. Material and labor costs for February were $9,500 and $12,300, respectively. The company paid the $775,000 annual rental fee on its manufacturing facility on January 1, year 1. The rental fee is allocated based on the total estimated number of units to be produced during the year. Required Assuming that Jordan desires to sell its chairs for cost plus 25 percent of cost, what price should be charged for the chairs produced in January and February? (Round intermediate calculations and final answers to 2 decimal places.) Price per unit January FebruaryWeek 11 Absorption Costing & Marginal Costing Profit Statement Answer all questions Fantasia Berhad plans to manufacture a new product next month. The expected average monthly sales and production volumes are 3,000 units. Budgeted cost per unit of a product based on the average monthly production volume is as follows: Direct material Direct labour (RM16 per hour) Variable production overhead RM 110 Required: 48 Other information are as follows: Selling Price per unit Variable selling and administration overhead Fixed selling and administration overhead Fixed production overhead Additional information: i. Fixed selling and administration overhead is to be treated as period cost in the monthly Income Statement. b. 24 182 ii. The budgeted production for the first month is 3,720 units but only 2,680 units are expected to be sold. RM400 10% of selling price RM168,000 per month RM126,000 per month Prepare the Statement of Profit or Loss of Fantasia Berhad for the first month using the…Question 3 Part II The Advent Corporation also manufactures chairs and tables at one of their divisions. The following isdata for its chair manufacturing department for the month of February.Actual Sales 4,500 ChairsSelling Price $60.00 per chairVariable Costs $15.00 per chairFixed Costs $72,000 Required:a. Calculate the Contribution Margin per chair. b. Compute the Contribution Margin Ratio. c. Determine the break-even point in revenue dollars. d. Calculate the Margin of Safety in revenue dollars. e. If the company wishes to increase its total dollar contribution margin by 50% in March, by how muchwill it have to increase sales, in units, if all factors remain the same?
- Exercise I-Set B Palawan Company must determine a target selling price for one of its products. Cost data relating to the product are as follows: Per Unit P 30 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable administrative and selling expenses 15 5 Fixed administrative and expenses 40 The costs above are based on an anticipated volume of 70,000 units produced and sold each period. The company uses cost-plus pricing, and it has a policy of obtaining target selling prices by adding a markup of 50% of unit manufacturing cost or by adding a markup of 80% of variable costs. Required: 1. Compute the target selling price per unit using absorption costing. 2. Compute the target selling price per unit using contribution costing.QS 17-18 (Algo) Allocating costs using ABC for a service company LO P4 Qinto Company sells two types of products: basic and deluxe. The company provides technical support for its products at a budgeted overhead cost of $239,200 per year. The company allocates technical support cost based on 10,400 budgeted technical support calls per year. 1. Compute the activity rate for technical support using activity-based costing. 2. During January, Qinto received 630 calls on its deluxe model and 115 calls on its basic model. Allocate technical support costs to each model. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the activity rate for technical support using activity-based costing. Technical support activity rate Numerator Denominator Actual direct labor costs Actual direct materials Actual machine hours Actual manufacturing costs Required 2 >Exercise 23-15 (Algo) Time and materials pricing LO A1 HH Electric reports the following information. Direct labor rate Non-materials-related overhead Materials-related overhead Target profit margin (on both conversion and direct materials) a. Compute the time charge per hour of direct labor. b. Compute the materials markup percentage. c. What price should the company quote for a job requiring four direct labor hours and $596 in materials? a. Time charge per hour of direct labor b. Materials markup c. Time and materials price $ 42 per DLH $ 23 per DLH 5% of direct materials cost 20% %
- Variable costs per unit: Direct materials $32 Direct labor $12 Factory Overhead $8 Selling and administrative expenses $7 Total variable cost per unit $59 Assume that as of September 1, 7,000 units of halogen light have been produced and sold during the current year. Analysis of the domestic market indicates that 3,000 additional units of the halogen light are expected to be sold during the remainder of the year at the normal product price determined under the product cost method. On September 5, Night Glow Inc. received an offer from Tokyo Lighting Inc. for 1,600 units of the halogen light at $57 each. Tokyo Lighting Inc. will market the units in Japan under its own brand name, and no variable selling and administrative expenses associated with the sale will be incurred by Night Glow Inc. The additional business is not expected to affect the domestic sales of the halogen light, and the additional units could be produced using existing productive, selling, and administrative…Queston 3 Part 2 The Advent Corporation also manufactures chairs and tables at one of their divisions. The following isdata for its chair manufacturing department for the month of February.Actual Sales 4,500 ChairsSelling Price $60.00 per chairVariable Costs $15.00 per chairFixed Costs $72,000 d. Calculate the Margin of Safety in revenue dollars. e. If the company wishes to increase its total dollar contribution margin by 50% in March, by how muchwill it have to increase sales, in units, if all factors remain the same?Kirby Fasteners supplies the electronics industry with accessories for cases, disc enclosures, and so on. Below are the costs and volumes for the past six months at its Plant number 6: Kirby Fasteners Plant Number 6 January to June Results Volume (Units) 11,100 10,040 13,370 13,900 11,900 11,680 Required: a. Use the high-low method to estimate the monthly fixed cost of production and the variable cost of production per unit. b. Kirby analysts forecast a production level of 12,100 units in July. Based on the results from requirement (a), what would be the estimated production costs in July? Total Cost $ 196,900 187,795 222,400 235,080 214,555 211, 212 Complete this question by entering your answers in the tabs below. Required A Variable cost Fixed cost Required B Use the high-low method to estimate the monthly fixed cost of production and the variable cost of production per unit. (Round "Variable cost" answer to 2 decimal places.)