Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN: 9781305970663
Author: Don R. Hansen, Maryanne M. Mowen
Publisher: Cengage Learning
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Chapter 2, Problem 16E
Kildeer Company makes easels for artists. During the last calendar year, a total of 30,000 easels were made, and 31,000 were sold for $52 each. The actual unit cost is as follows:
The selling expenses consisted of a commission of $1.30 per unit sold and advertising copayments totaling $95,000. Administrative expenses, all fixed, equaled $183,000. There were no beginning and ending work-in-process inventories. Beginning finished goods inventory was $132,600 for 3,400 easels.
Required:
- 1. Calculate the number and the dollar value of easels in ending finished goods inventory.
- 2. Prepare a cost of goods sold statement.
- 3. Prepare an absorption-costing income statement. Add a column for percentage of sales.
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Kildeer Company makes easels for artists. During the last calendar year, a total of 30,000 easelswere made, and 31,000 were sold for $52 each. The actual unit cost is as follows:
Direct materials $14.70Direct labor 5.80Variable overhead 3.25Fixed overhead 15.25Total unit cost $39.00
The selling expenses consisted of a commission of $1.30 per unit sold and advertising co-payments totaling $95,000. Administrative expenses, all fixed, equaled $183,000. There were no beginning and ending work-in-process inventories. Beginning finished goods inventory was$132,600 for 3,400 easels.Required:1. Calculate the number and the dollar value of easels in ending finished goods inventory.2. Prepare a cost of goods sold statement.3. Prepare an absorption-costing income statement. Add a column for percentage of sales.
Servix, Inc., produces water pumps. Each water pump contains a small valve that costs $ 5. During
May, 600 valves were drawn from the supply room and installed in water pumps in the production
process. Eighty percent of these units were completed and transferred into finished goods
warehouses. Of the units completed, thirty percent were still unsold at the end of the month. There
were no beginning inventories.
52.The cost of valves in cost of goods sold for May would be:
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b. $2,100
c.$900
d. $72
Galaxy, Inc., a manufacturer of telescopes, began operations on June 1 of the current year. During this time, the company produced 60,000 units and sold 40,000 units at a sales price of $600 per unit. Cost information for this year is shown in the following table:
Production costs
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$
90
per unit
Direct labor
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Variable overhead
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in total
Non-production costs
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80,000
in total
Fixed selling and administrative
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520,000
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Given the Galaxy, Inc. data, what is net income using absorption costing?
Chapter 2 Solutions
Cornerstones of Cost Management (Cornerstones Series)
Ch. 2 - What is an accounting information system?Ch. 2 - What is the difference between a financial...Ch. 2 - What are the objectives of a cost management...Ch. 2 - Define and explain the two major subsystems of the...Ch. 2 - What is a cost object? Give some examples.Ch. 2 - Prob. 6DQCh. 2 - What is a direct cost? An indirect cost?Ch. 2 - Prob. 8DQCh. 2 - What is allocation?Ch. 2 - Explain how driver tracing works.
Ch. 2 - What is a tangible product?Ch. 2 - Prob. 12DQCh. 2 - Give three examples of product cost definitions....Ch. 2 - Prob. 14DQCh. 2 - Prob. 15DQCh. 2 - Pietro Frozen Foods, Inc., produces frozen pizzas....Ch. 2 - For next year, Pietro predicts that 50,000 units...Ch. 2 - Pietro expects to produce 50,000 units and sell...Ch. 2 - Refer to Cornerstone Exercises 2.2 and 2.3. Next...Ch. 2 - Jean and Tom Perritz own and manage Happy Home...Ch. 2 - Jean and Tom Perritz own and manage Happy Home...Ch. 2 - Jean and Tom Perritz own and manage Happy Home...Ch. 2 - Jean and Tom Perritz own and manage Happy Home...Ch. 2 - Prob. 9ECh. 2 - The following items are associated with a cost...Ch. 2 - Nizam Company produces speaker cabinets. Recently,...Ch. 2 - Three possible product cost definitions were...Ch. 2 - Wyandotte Company provided the following...Ch. 2 - For each of the following independent situations,...Ch. 2 - LeMans Company produces specialty papers at its...Ch. 2 - Kildeer Company makes easels for artists. During...Ch. 2 - Anglin Company, a manufacturing firm, has supplied...Ch. 2 - Lakeesha Barnett owns and operates a package...Ch. 2 - Millennium Pharmaceuticals, Inc. (MPI), designs...Ch. 2 - Jazon Manufacturing produces two different models...Ch. 2 - Ellerson Company provided the following...Ch. 2 - Ellerson Company provided the following...Ch. 2 - Orinder Company provided the following information...Ch. 2 - Last year, Orsen Company produced 25,000 juicers...Ch. 2 - Last year, Orsen Company produced 25,000 juicers...Ch. 2 - The ability to assign a cost directly to a cost...Ch. 2 - Selected information concerning the operations of...Ch. 2 - Brody Company makes industrial cleaning solvents....Ch. 2 - Wright Plastic Products is a small company that...Ch. 2 - The following items are associated with a...Ch. 2 - The actions listed next are associated with either...Ch. 2 - Spencer Company produced 200,000 cases of sports...Ch. 2 - Prob. 33PCh. 2 - Mason, Durant, and Westbrook (MDW) is a tax...Ch. 2 - Orman Company produces neon-colored covers for...Ch. 2 - High drug costs are often in the news. Consumer...
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