The following information is available for Barnes Company for the fiscal year ended December 31: Beginning finished goods inventory in units Units produced Units sold Sales 8,600 5,900 $ 767,000 $ 172,000 Materials cost $ 86,000 Variable conversion cost used Fixed manufacturing cost $ 946,000 Indirect operating costs (fixed) $ 118,000 The difference between the variable costing ending inventory and the absorption costing ending inventory is: Multiple Choice 2,700 units times $115 per unit variable conversion cost plus $110 per unit fixed manufacturing cost 2.700 units times $115 per unit variable conversion cost plus $110 per unit fixed manufacturing cost plus $111.67 per unit indirect operating 2.700 units times $105 per unit materials cost

The following information is available for Barnes Company for the fiscal year ended December 31: Beginning finished goods inventory in units Units produced Units sold Sales 8,600 5,900 $ 767,000 $ 172,000 Materials cost $ 86,000 Variable conversion cost used Fixed manufacturing cost $ 946,000 Indirect operating costs (fixed) $ 118,000 The difference between the variable costing ending inventory and the absorption costing ending inventory is: Multiple Choice 2,700 units times $115 per unit variable conversion cost plus $110 per unit fixed manufacturing cost 2.700 units times $115 per unit variable conversion cost plus $110 per unit fixed manufacturing cost plus $111.67 per unit indirect operating 2.700 units times $105 per unit materials cost

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter10: Cost Analysis For Management Decision Making

Section: Chapter Questions

Problem 4E: The following production data came from the records of Olympic Enterprises for the year ended...

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Weighted Average Method, Unit Costs, Valuing Inventories Byford Inc. produces a product that passes through two processes. During November, equivalent units were calculated using the weighted average method: The costs that Byford had to account for during the month of November were as follows: Required: 1. Using the weighted average method, determine unit cost. 2. Under the weighted average method, what is the total cost of units transferred out? What is the cost assigned to units in ending inventory? 3. CONCEPTUAL CONNECTION Bill Johnson, the manager of Byford, is considering switching from weighted average to FIFO. Explain the key differences between the two approaches and make a recommendation to Bill about which method should be used.
The following production data came from the records of Olympic Enterprises for the year ended December 31, 2016: During the year, 40,000 units were manufactured but only 35,000 units were sold. Determine the effect on inventory valuation by computing the following: 1. Total inventoriable costs and the cost of the 35,000 units sold and of the 5,000 units in the ending inventory, using variable costing. 2. Total inventoriable costs and the cost of the 35,000 units sold and of the 5,000 units in the ending inventory, using absorption costing.
The following information pertains to Vladamir, Inc., for last year: There are no work-in-process inventories. Normal activity is 100,000 units. Expected and actual overhead costs are the same. Costs have not changed from one year to the next. Required: 1. How many units are in ending inventory? 2. Without preparing an income statement, indicate what the difference will be between variable-costing income and absorption-costing income. 3. Assume the selling price per unit is 29. Prepare an income statement using (a) variable costing and (b) absorption costing.
What are the total costs to account for if a companys beginning inventory had $231,432 in materials, $186,450 in conversion costs, and added direct material costs ($4,231,392), direct labor ($2,313,392), and manufacturing overhead ($1,156,696)?
At the end of the first year of operations, 21,500 units remained in the finished goods inventory. The unit manufacturing costs during the year were as follows: Determine the cost of the finished goods inventory reported on the balance sheet under (a) the absorption costing concept and (b) the variable costing concept.
Webster Company uses backflush costing to account for its manufacturing costs. The trigger points for recording inventory transactions are the purchase of materials, the completion of products, and the sale of completed products. Required: 1. Prepare journal entries, if needed, to account for the followingtransactions. a. Purchased raw materials on account, 135,000. b. Requisitioned raw materials to production, 135,000. c. Distributed direct labor costs, 20,000. d. Incurred manufacturing overhead costs, 80,000. (Use Various Credits for the credit part of the entry.) e. Cost of products completed, 235,000. f. Completed products sold for 355,000, on account. 2. Prepare any journal entries that would be different from theabove, if the only trigger points were the purchase of materialsand the sale of finished goods.
Banwood Company has the following information for 20x1: There were no beginning inventories. What is the ending inventory for Banwood using the absorption costing method? a. 300,000 b. 180,000 c. 120,000 d. 80,000
The following data were adapted from a recent income statement of The Procter Gamble Company (PG): Assume that the variable amount of each category of operating costs is as follows: a. Based on the data given, prepare a variable costing income statement for Procter Gamble, assuming that the company maintained constant inventory levels during the period. b. If Procter Gamble reduced its inventories during the period, what impact would that have on the operating income determined under absorption costing?
The following data were adapted from a recent income statement of Caterpillar Inc. (CAT) for the year ended December 31: Assume that 8,500 million of cost of goods sold and 4,000 million of selling, administrative, and other expenses were fixed costs. Inventories at the beginning and end of the year were as follows: Also, assume that 30% of the beginning and ending inventories were fixed costs. a. Prepare an income statement according to the variable costing concept for Caterpillar Inc. Round numbers to nearest million. b. Explain the difference between the amount of operating income reported under the absorption costing and variable costing concepts. Round numbers to nearest million.
Hayes Incorporated provided the following information for the current year: Beginning inventory Units produced Units sold Selling price Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling/administrative costs Fixed selling/administrative costs What is the product cost per unit for the year using variable costing? Multiple Choice $162 $114 $138 260 units 910 units 960 units $ 310/unit $ 51/unit $ 32/unit $ 31/unit $ 43,680/year $ 24/unit $ 31,500/year
Inventory Valuation under Absorption Costing and Variable Costing At the end of the first year of operations, the number of units and the unit manufacturing costs were as follows: DATA Units in the finished goods inventory Direct materials Direct labor Fixed factory overhead Variable factory overhead REQUIRED: 5,000 $26.70 13.20 5.30 4.70 Determine the cost of the finished goods inventory reported on the balance sheet under (a) the absorption costing concept and (b) the variable costing concept. Using formulas and cell references from the problem data, perform the required analysis. Formulas entered in the green cells show in the orange cells. Transfer amounts to CNOWv2 for grading Absorption costing Variable costing Cost of Finished Goods Formulas
XYZ Company uses normal costing. Following are various cost and inventory data for the just completed year: Sales revenue OMR410,000; Adjusted gross profit OMR175,000; Selling and admin expenses OMR145,000 ; Overapplied overhead OMR15,000 ; Prime costs OMR155,000; Work in process inventory has increased by OMR10,000 ; Finished goods inventory has decreased by OMR20,000. How much is the manufacturing overhead costs applied to work in process during the year? Select one: a. None of the answers given O b. OMR70,000 Oc. OMR85,000 O d. OMR95,000 O e. OMR75,000