Calamari Manufacturing produces small electric engines 2023 Business Finance
2023 Ple a s e c o m p l et e a l l10 p r ob le m
Please completeall10 problemsin order. Turn thesolutionsin on theduedatebyuploading themon Blackboard in ONEfile. If you useExcel, please copyand paste theExcelworkinto theWord file. Yourwork should read in order. Pleasedo notuseExcel to turn inyourwork.
1. CalamariManufacturingproduces small electric engines. Identifythefollowingcostsasdirectmaterials (DM), direct labor (DL), manufacturingoverhead (MOH), or aperiod cost(PC). Also indicatewhetherthe cost isvariable(V) or fixed (F) with respecttobehavior.
A. Commissionspaid to salespeople
B. Straight–linedepreciation onthefactorybuilding
C. Salaryof theplantsupervisor
D. Wagesof the assembly–lineworkers
E. Machinelubricantused in productionactivities
F. Engine casingsused in production activities
G.Advertisingplaced in trade journals
I. Propertytaxespaid on thefactoryfacilities
2. Parrish‘s Manufacturinghad thefollowingdatafor theperiodjust ended:
B. CalculateParrish‘scostof goods sold.
Duringtheyear, the companypurchased $100,000 of rawmaterialand incurred $340,000 of directlabor costs. Other data:manufacturingoverhead incurred, $450,000;sales, $1,560,000;sellingand administrative expenses,
$90,000; income tax rate, 30%.
A. Calculate costof goodsmanufactured.
B. Calculatecostof goods sold.
C. DetermineHamilton‘snet income.
4.Lettman Corporation hasprovided thefollowingpartiallistingof costsincurredduringNovember:
a. What isthe totalamountof production/inventoriablecostslisted above?Showyour work.
b. What isthe totalamountof period costslisted above?Showyour work.
5. Thefollowinginformation summarizesthe company‘scoststructure:
Estimate thefollowingcostsat the40,000unit levelof activity:
a. Totalvariablecost. b. Totalfixed cost.
c. Variable costper unit. d.Fixed costper unit.
Managementbelievesthatmaintenance cost isa mixedcost thatdependson machine–hours.
Estimate thevariablecostper machine–hour and thefixed costpermonth usingthehigh–lowmethod. Show
7. Iron Decor manufacturesdecorative iron railings. In preparingfor nextyear‘soperations, managementhas developed thefollowingestimates:
a. Unit contributionmargin. b. Contributionmargin ratio. c. Break–even in dollar sales.
d. Margin of safetypercentage.
e. If thesalesvolume increasesby20%with no change in totalfixed expenses, whatwillbe the change in net operatingincome?
f. If theper unitvariableproduction costsincreaseby15%, and if fixed sellingand administrative expenses increaseby12%, whatwillbe thenewbreak–even point in dollar sales?
8. ButremovicCorporation‘scontribution format incomestatementforthe mostrecent month follows:
a. Computethedegreeof operatingleverage to two decimalplaces.
b. Usingthedegreeof operating leverage, estimate thepercentage change in netoperatingincomethatshould resultfrom an 8%increase in sales.
9. TorriInc. producesand sellstwo products. Duringthe mostrecent month, ProductC34M‘ssales were
$25,000 and itsvariableexpenses were$5,750. ProductY03Z‘s sales were$40,000 and itsvariableexpenses were$9,850. The company‘sfixed expenses were$48,310.
a. Determine theoverallbreak–even pointfor the company.Showyour work!
b. If thesalesmix shiftstoward ProductC34M with no change in totalsales, whatwillhappen to thebreak–even pointfor thecompany?Explain.
10. Anumber of companiesin different industriesarelisted below:
1. Elevator production and installationcompany
2. Cattlefeedlot thatfattenscattlepriortoslaughter
3. Brick manufacturer
4. Architecturalfirm thatdesignscustomhomes
5. Winerythatproducesanumber of varietalwines
6. Syntheticrubber manufacturer
For each company, indicatewhether the companyismost likelyto use job–order costingor processcosting.
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