Accounting

Question 1

Meriden Company has a unit selling price of $790, variable costs per unit of $395, and fixed costs of $310,470. Compute the break-even point in units using the mathematical equation.

Break-even point

units

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	Question 2 For Turgo Company, variable costs are 57% of sales, and fixed costs are $188,300. Management’s net income goal is $109,389. Compute the required sales in dollars needed to achieve management’s target net income of $109,389. Required sales $
Question 3

For Kozy Company, actual sales are $1,266,000 and break-even sales are $772,260. Compute the margin of safety in dollars and the margin of safety ratio.

Margin of safety		$
Margin of safety ratio			%

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Question 4

Montana Company produces basketballs. It incurred the following costs during the year.

Direct materials		$14,090
Direct labor		$25,534
Fixed manufacturing overhead		$9,635
Variable manufacturing overhead		$31,877
Selling costs		$20,775

What are the total product costs for the company under variable costing?

Total product costs

$

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Question 5 Polk Company builds custom fishing lures for sporting goods stores. In its first year of operations, 2012, the company incurred the following costs. Variable Cost per Unit Direct materials $8.10 Direct labor $2.65 Variable manufacturing overhead $6.21 Variable selling and administrative expenses $4.21   Fixed Costs per Year Fixed manufacturing overhead $252,582 Fixed selling and administrative expenses $259,308 Polk Company sells the fishing lures for $27.00. During 2012, the company sold 80,200 lures and produced 94,600 lures. Warning Don't show me this message again for the assignment Ok    Cancel

	(a) Assuming the company uses variable costing, calculate Polk’s manufacturing cost per unit for 2012. (Round answer to 2 decimal places, e.g.10.50.) Manufacturing cost per unit $ Warning Don't show me this message again for the assignment Ok    Cancel    Link to Text
Question 6

For the quarter ended March 31, 2012, Maris Company accumulates the following sales data for its product, Garden-Tools: $315,500 budget; $322,200 actual. Prepare a static budget report for the quarter.

MARIS COMPANY Sales Budget Report For the Quarter Ended March 31, 2012
Product Line		Budget		Actual		Difference
Garden-Tools		$		$		$

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Gundy Company expects to produce 1,263,480 units of Product XX in 2012. Monthly production is expected to range from 78,230 to 114,710 units. Budgeted variable manufacturing costs per unit are: direct materials $4, direct labor $7, and overhead $10. Budgeted fixed manufacturing costs per unit for depreciation are $5 and for supervision are $2. Prepare a flexible manufacturing budget for the relevant range value using 18,240 unit increments. (List variable costs before fixed costs.)

GUNDY COMPANY Monthly Flexible Manufacturing Budget For the Year 2012
	$	$	$
	$	$	$
	$	$	$

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Martinez Company has decided to introduce a new product. The new product can bemanufactured by either a capital-intensive method or a labor-intensive method. The manufacturingmethod will not affect the quality of the product. The estimated manufacturing costs by the two methods are as follows.

 

                                                      Capital-                            Labor-

                                                     Intensive                          Intensive

Direct materials                           $5 per unit                      $5.50 per unit

Direct labor                                  $6 per unit                     $8.00 per unit

Variable overhead                        $3 per unit                    $4.50 per unit

Fixed manufacturing costs           $2,508,000                  $1,538,000

Martinez's market research department has recommended an introductory unit sales price of$30. The incremental selling expenses are estimated to be $502,000 annually plus $2 for each unitsold, regardless of manufacturing method.

Instructions

With the class divided into groups, answer the following.

a) Calculate the estimated break-even point in annual unit sales of the new product if Martinez Company uses the:

               (1) Capital-intensive manufacturing method. 

               (2) Labor-intensive manufacturing method.