Homework Answers
7.
- Variable costs vary directly with the number of units sold. Fixed costs do not vary with the number of units sold.
- Lets take an example of a video game player.
- In this example, Variable costs are those required for purchasing the components of the player, labor costs and sales and marketing expenses. These costs will vary according to the number of units produced.
- Fixed costs are those associated with assembly space and administration expenses.
8. Fixed costs are operating expenses that do not vary with the number of units sold while variable costs directly vary with the number of units sold.
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7. Cash flows from operations: What are variable costs and fixed costs? Variable costs are costs...
Estimated Income Statements, using Absorption and Variable Costing Prior to the first month of operations ending...
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$12,000 Sales Variable costs: Cost of goods sold Variable selling Variable administrative Fixed costs: Fixed selling...
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5 Sales revenue Variable manufacturing costs Fixed manufacturing costs Variable selling and administrative costs Fixed selling...
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Bracey Company manufactures and sells one product. The following information pertains to the company’s first year of operations: Variable cost per unit: Direct materials $ 28 Fixed costs per year: Direct labor $ 367,500 Fixed manufacturing overhead $ 389,550 Fixed selling and administrative expenses $ 66,000 The company does not incur any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, Bracey produced 24,500 units and sold 22,700 units. The selling price of...
owing information pertains to each of the company's first two years of operations: Variable costs per...
owing information pertains to each of the company's first two years of operations: Variable costs per unit: Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Pixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses $320,000 $ 90.000 During its first year of operations, Walsh produced 50,000 units and sold 40,000 units. During its second year of operations, it produced 40,000 units and sold 50,000 units. The selling price of the company's product is...
Required: 1. Determine the total variable costs and the total fixed costs for the current year....
Required: 1. Determine the total variable costs and the total fixed costs for the current year. Total variable costs Total fixed costs 2. Determine (a) the unit variable cost and (b) the unit contribution margin for the current year. Unit variable cost Unit contribution margin 3. Compute the break-even sales (units) for the current year. units 4. Compute the break-even sales (units) under the proposed program for the following year. units 5. Determine the amount of sales (units) that would...
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Absorption and Variable Costing Income Statements During the first month of operations ended July 31, YoSan Inc. manufactured 11,900 flat panel televisions, of which 10,900 were sold. Operating data for the month are summarized as follows: Sales $1,798,500 Manufacturing costs: Direct materials $928,200 Direct labor 273,700 Variable manufacturing cost 238,000 Fixed manufacturing cost 119,000 1,558,900 Selling and administrative expenses: Variable $141,700 Fixed 65,200 206,900 Required: 1. Prepare an income statement based on the absorption...
Influenced and fixed and variable costs on Price and profit. In 19A the velasquez products company...
Influenced and fixed and variable costs on Price and profit. In 19A the velasquez products company produced a machine that sold for $600$of which 450 represented cost of goods sold and $50 represented marketing and administrative expanses. The cost of goods sold was compromised of 40% material cost, 40% of labor cost and 20% of factory overhead. During 19A, 2000 machines were sold. During 19B, increases 20% in cost of materials and 25% in cost of labor are anticipated ....
Assume a merchandising company uses the high-low method to separate any mixed costs into their variable...
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Exercise 5-9 Variable and Absorption Costing Unit Product Costs and Income Statements [LO5-1, LO5-2, LO5-3] Walsh Company manufactures and sells one product. The following information pertains to each of the company's first two years of operations: Variable costs per unit: Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses $ $ 240,000 60,000 During its first year of operations, Walsh produced 50,000 units and sold...
$12,000 Sales Variable costs: Cost of goods sold Variable selling Variable administrative Fixed costs: Fixed selling Fixed administrative $6,000 $600 $400 $2,500 $1,500 Enter a formula into each of the cells marked with a ? below Exhibit 2-9 Traditional Format Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling Administrative Net operating income Contribution Format Income Statement Sales Variable expenses: Cost of goods sold Variable selling Variable administration Contribution margin Fixed expenses: Fixed selling Fixed...
5 Sales revenue Variable manufacturing costs Fixed manufacturing costs Variable selling and administrative costs Fixed selling and administrative costs $274,000 93,000 67,000 38,000 33,000 What is this company's contribution margin? Multiple Choice o $43.000 $76.000 5114000 $143.000 6 Sales revenue (1,700 units * $19.20 per unit) Cost of goods sold (variable; 1,700 units x $9.20 per unit) Cost of goods sold (fixed) Gross margin Administrative salaries Depreciation Supplies (1,700 units * $1.20 per unit) Net income $ 32,640 (15,640) (3,200)...
owing information pertains to each of the company's first two years of operations: Variable costs per unit: Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Pixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses $320,000 $ 90.000 During its first year of operations, Walsh produced 50,000 units and sold 40,000 units. During its second year of operations, it produced 40,000 units and sold 50,000 units. The selling price of the company's product is...
Required: 1. Determine the total variable costs and the total fixed costs for the current year. Total variable costs Total fixed costs 2. Determine (a) the unit variable cost and (b) the unit contribution margin for the current year. Unit variable cost Unit contribution margin 3. Compute the break-even sales (units) for the current year. units 4. Compute the break-even sales (units) under the proposed program for the following year. units 5. Determine the amount of sales (units) that would...
Exercise 5-9 Variable and Absorption Costing Unit Product Costs and Income Statements [LO5-1, LO5-2, LO5-3] Walsh Company manufactures and sells one product. The following information pertains to each of the company's first two years of operations: Variable costs per unit: Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses $ $ 240,000 60,000 During its first year of operations, Walsh produced 50,000 units and sold...
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