Tyler Accounting Calculation of Predetermined FOH

Trevino Company makes and sells products with variable costs of $24 each. Trevino incurs annual fixed costs of $315,000. The current sales price is $87. Note: The requirements of this question are interdependent. For example, the $252,000 desired profit introduced in Requirement c also applies to subsequent requirements. Likewise, the $80 sales price introduced in Requirement d applies to the subsequent requirements. rev: 07_24_2020_QC_CS-220166 b. Determine the break-even point in units and in dollars. Prepare an income statement using the contribution margin format. Required information 2)Trevino Company makes and sells products with variable costs of $24 each. Trevino incurs annual fixed costs of $315,000. The current sales price is $87. Note: The requirements of this question are interdependent. For example, the $252,000 desired profit introduced in Requirement c also applies to subsequent requirements. Likewise, the $80 sales price introduced in Requirement d applies to the subsequent requirements. rev: 07_24_2020_QC_CS-220166 c. Suppose that Trevino desires to earn a $252,000 profit. Determine the sales volume in units and dollars required to earn the desired profit. Prepare an income statement using the contribution margin format. Required information 3}Trevino Company makes and sells products with variable costs of $24 each. Trevino incurs annual fixed costs of $315,000. The current sales price is $87. Note: The requirements of this question are interdependent. For example, the $252,000 desired profit introduced in Requirement c also applies to subsequent requirements. Likewise, the $80 sales price introduced in Requirement d applies to the subsequent requirements. rev: 07_24_2020_QC_CS-220166 PLEASE ANSWER THE FOLLOWING d. If the sales price drops to $80 per unit, what level of sales is required to earn the desired profit? Express your answer in units and dollars. Prepare an income statement using the contribution margin format. 4) Required information Trevino Company makes and sells products with variable costs of $24 each. Trevino incurs annual fixed costs of $315,000. The current sales price is $87. Note: The requirements of this question are interdependent. For example, the $252,000 desired profit introduced in Requirement c also applies to subsequent requirements. Likewise, the $80 sales price introduced in Requirement d applies to the subsequent requirements. rev: 07_24_2020_QC_CS-220166 e. If fixed costs drop to $280,000, what level of sales is required to earn the desired profit? Express your answer in units and dollars. Prepare an income statement using the contribution margin format. Required information 5)Trevino Company makes and sells products with variable costs of $24 each. Trevino incurs annual fixed costs of $315,000. The current sales price is $87. Note: The requirements of this question are interdependent. For example, the $252,000 desired profit introduced in Requirement c also applies to subsequent requirements. Likewise, the $80 sales price introduced in Requirement d applies to the subsequent requirements. rev: 07_24_2020_QC_CS-220166 f. If variable cost rises to $30 per unit, what level of sales is required to earn the desired profit? Express your answer in units and dollars. Prepare an income statement using the contribution margin format. 6) Required information Trevino Company makes and sells products with variable costs of $24 each. Trevino incurs annual fixed costs of $315,000. The current sales price is $87. Note: The requirements of this question are interdependent. For example, the $252,000 desired profit introduced in Requirement c also applies to subsequent requirements. Likewise, the $80 sales price introduced in Requirement d applies to the subsequent requirements. PLEASE ANSWER THE FOLLOWING rev: 07_24_2020_QC_CS-220166 g. Assume that Trevino concludes that it can sell 10,000 units of product for $80 each. Recall that variable costs are $30 each and fixed costs are $280,000. Compute the margin of safety in units and dollars and as a percentage. CHAPTER 2 Munoz Boot Co. sells men’s, women’s, and children’s boots. For each type of boot sold, it operates a separate department that has its own manager. The manager of the men’s department has a sales staff of nine employees, the manager of the women’s department has six employees, and the manager of the children’s department has three employees. All departments are housed in a single store. In recent years, the children’s department has operated at a net loss and is expected to continue to do so. Last year’s income statements follow. Men’s Department Sales $ 680,000 Cost of goods sold (270,500) Gross margin 409,500 Department (62,000) manager’s salary Sales commissions (116,200) Rent on store (31,000) lease Store utilities (14,000) Net income (loss) $ 186,300 Women’s Department $ 500,000 (180,400) 319,600 Children’s Department $ 200,000 (101,875) 98,125 (51,000) (31,000) (85,600) (32,900) (31,000) (31,000) (14,000) 138,000 (14,000) (10,775) $ $ Required 1. a. Calculate the contribution to profit. Determine whether to eliminate the children’s department. 2. b-1. Calculate the net income for the company as a whole with the children’s department. 3. b-2. Confirm the conclusion you reached in Requirement a by preparing income statements for the company as a whole with and without the children’s department. PLEASE ANSWER THE FOLLOWING 4. c. Eliminating the children’s department would increase space available to display men’s and women’s boots. Suppose management estimates that a wider selection of adult boots would increase the store’s net earnings by $42,000. Would this information affect the decision that you made in Requirement a? 2) ordan Corporation makes and sells state-of-the-art electronics products. One of its segments produces The Math Machine, an inexpensive calculator. The company’s chief accountant recently prepared the following income statement showing annual revenues and expenses associated with the segment’s operating activities. The relevant range for the production and sale of the calculators is between 37,000 and 71,000 units per year. Revenue (38,000 units × $11.00) Unit-level variable costs Materials cost (38,000 × $3.00) Labor cost (38,000 × $2.00) Manufacturing overhead (38,000 × $0.10) Shipping and handling (38,000 × $0.25) Sales commissions (38,000 × $2.00) Contribution margin Fixed expenses Advertising costs Salary of production supervisor Allocated company-wide facility-level expenses Net loss $ 418,000 (114,000) (76,000) (3,800) (9,500) (76,000) 138,700 (27,000) (67,000) (82,000) $ (37,300) Required 1. a. A large discount store has approached the owner of Jordan about buying 7,000 calculators. It would replace The Math Machine’s label with its own logo to avoid affecting Jordan’s existing customers. Because the offer was made directly to the owner, no sales commissions on the transaction would be involved, but the discount store is willing to pay only $5.60 per calculator. Calculate the contribution margin from the special order. Based on quantitative factors alone, should Jordan accept the special order? 2. b-1. Jordan has an opportunity to buy the 38,000 calculators it currently makes from a reliable competing manufacturer for $6.30 each. The PLEASE ANSWER THE FOLLOWING product meets Jordan’s quality standards. Jordan could continue to use its own logo, advertising program, and sales force to distribute the products. Calculate the total cost for Jordan to make and buy the 38,000 calculators. 3. b-2. Should Jordan buy the calculators or continue to make them? 4. b-3. Should Jordan buy the calculators or continue to make them, if the volume of sales were increased to 71,000 units? 5. c. Because the calculator division is currently operating at a loss, should it be eliminated from the company’s operations? Support your answer with appropriate computations. Specifically, by what amount would the segment’s elimination increase or decrease profitability? CHAPTER 5 Munoz Sporting Goods Corporation makes two types of racquets, tennis and badminton. The company uses the same facility to make both products even though the processes are quite different. The company has recently converted its cost accounting system to activity-based costing. The following are the cost data that Jane Price, the cost accountant, prepared for the third quarter of 2018 (during which Munoz made 71,500 tennis racquets and 30,600 badminton racquets). Direct Cost Tennis Racquet (TR) Badminton Racquet (BR) Direct materials $ 17.10 per unit $ 14.20 per unit Direct labor 35.00 per unit 25.70 per unit Category Unit level Batch level Product level Facility level Total Estimated Cost $ 780,000 352,800 147,500 726,000 Cost Driver Number of inspection hours Number of setups Amount of Cost Driver TR: 14,600 hours; BR: 11,400 hours TR: 83 setups; BR: 43 setups Number of TV TR: 3; BR: 2 commercials Number of machine TR: 31,000 hours; hours BR: 35,000 hours $ 2,006,300 Inspectors are paid according to the number of actual hours worked, which is determined by the number of racquets inspected. Engineers who set up equipment for both products are paid monthly salaries. TV commercial fees are paid at the beginning of the quarter. Facility-level cost includes depreciation of all production equipment. PLEASE ANSWER THE FOLLOWING Required a. Compute the cost per unit for each product. b. If management wants to price badminton racquets 30 percent above cost, what price should the company set? 2) Gibson Cameras, Inc. manufactures two models of cameras. Model ZM has a zoom lens; Model DS has a fixed lens. Gibson uses an activity-based costing system. The following are the relevant cost data for the previous month: Direct Cost per UnitModel ZMModel DS Direct materials $ 20.60 $ 7.00 Direct labor 29.20 9.00 Category Estimated Cost Unit level $ Batch level Product level Facility level Total Cost Driver Use of Cost Driver ZM: 2,500 units; DS: 9,300 units ZM: 26 setups; DS: 26 setups 25,960 Number of units 49,400 Number of setups 90,000 Number of TV commercialsZM: 14; DS: 11 180,000 Number of machine hours ZM: 300 hours; DS: 600 hours $ 345,360 Gibson’s facility has the capacity to operate 2,700 machine hours per month. Required a. Compute the cost per unit for each product. b. The current market price for products comparable to Model ZM is $118 and for DS is $69. If Gibson sold all of its products at the market prices, what was its profit or loss for the previous month? c. A market expert believes that Gibson can sell as many cameras as it can produce by pricing Model ZM at $113 and Model DS at $34. Gibson would like to use those estimates as its target prices and have a profit margin of 30 percent of target prices. What is the target cost for each product? 3) PLEASE ANSWER THE FOLLOWING Campbell Chairs, Inc. makes two types of chairs. Model Diamond is a highend product designed for professional offices. Model Gold is an economical product designed for family use. Jane Silva, the president, is worried about cut-throat price competition in the chairs market. Her company suffered a loss last quarter, an unprecedented event in its history. The company’s accountant prepared the following cost data for Ms. Silva: Direct Cost per Unit Direct material s Direct labor Model Diamond (D) $ $ Batch level Product level Facility level Total 20.6 per unit 0 $ 10.2 per unit 0 hours hour 19.1/hou 19.1/hou × 2.00 productio $ × 1.00 productio 0r 0r n time n time Estimated Cost Category Unit level Model Gold (G) $ Cost Driver 247,500 Number of units 714,000 Number of setups 864,000 275,000 Use of Cost Driver D: 14,000 units; G: 31,000 units D: 106 setups; G: 234 setups Number of TV D: 8; G: 16 commercials Number of machine D: 2,000 hours; G: hours 3,500 hours $ 2,100,500 The market price for office chairs comparable to Model Diamond is $122 and to Model Gold is $79. Required a. Compute the cost per unit for both products. b. Dan Barker, the chief engineer, told Ms. Silva that the company is currently making 132 units of Model Diamond per batch and 132 units of Model Gold per batch. He suggests doubling the batch sizes to cut the number of setups in half, thereby reducing the setup cost by 50 percent. Compute the cost per unit for each product if Ms. Silva adopts his suggestion. (For all requirements, round intermediate calculations and final answers to 2 decimal places.) PLEASE ANSWER THE FOLLOWING …