ACCT 505 - Quiz 2 - Keller - bulrich777

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Sales	$910
Purchases of raw materials	$225
Direct labor	$245
Manufacturing overhead	$265
Administrative expenses	$150
Selling expenses	$140
Raw materials inventory, beginning	$15
Raw materials inventory, ending	$45
Work-in-process inventory, beginning	$20
Work-in-process inventory, ending	$55
Finished goods inventory, beginning	$100
Finished goods inventory, ending	$135

Prepare a Schedule of Cost of Goods Manufactured statement in the text box below.

Question 2.

		Percentage Completed
	Units	Materials	Conversion
Work in process, June 1	70,000	65%	45%
Work in process, Jun 30	60,000	75%	65%

The department started 290,000 units into production during the month and transferred 300,000 completed units to the next department.

Required: Compute the equivalent units of production for the first department for June, assuming that the company uses the weighted-average method of accounting for units and costs.

Question 3.

Tons of cement produced and sold	220,000
Sales revenue	$924,000
Variable manufacturing expense	$297,000
Fixed manufacturing expense	$280,000
Variable selling and admin expense	$165,000
Fixed selling and admin expense	$82,000
Net operating income	$100,000

Required:

Calculate the company's unit contribution margin.
Calculate the company's contribution margin ratio.
If the company increases its unit sales volume by 5% without increasing its fixed expenses, what would the company's net operating income be?

Question 4.

Selling price	$450

Units in beginning inventory	0
Units produced	25,000
Units sold	22,000

Variable costs per unit:
Direct materials	$200
Direct labor	$50
Variable manufacturing overhead	$30
Variable selling and admin	$15

Fixed costs:
Fixed manufacturing overhead	$275,000
Fixed selling and admin	$230,000

Assume that direct labor is a variable cost.

Required:

Compute the cost of a single unit of product under both the absorption costing and variable costing approaches.
Prepare an income statement for the year using absorption costing.
Prepare an income statement for the year using variable costing.