ACC 406 : Study Guide

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magentazebra767

17 May 2011

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Manufacturing cost = dl + dm + oh (variable, fixed) Less: cogs: revenues, = gm, = income. Less: variable costs: revenues, = contribution margin, = income. Actual vs estimated cost (budgeted [9] standard [10,11] predetermined [5]) Prime (dm + dl) vs conversion costs (dl + oh) Cost formula: y = fixed + (variable)(x: high-low method. Target sales in unit = (fixed cost + profit) / contribution margin per unit. Target sales in dollars = (fixed cost + profit) / contribution margin ratio. Safety margin = current sales performance breakeven sales. Degree of operating leverage = contribution margin / profit www. notesolution. com. Income = (price)(volume) total fixed cost (variable cost per unit)(volume) Chapter 5 job-order costing system: costing system, product costing system. Applied overhead = predetermined oh rate * actual volume. Abc (oh costs > activities > products) vs traditional costing approach (oh costs > Chapter 9 budgeting: operational (sales > production > dm, dl, oh budgets, financial (cash, projected income, balance)

Related Questions

Crafts Inc., is a manufacturer of furniture.

The company has 2 responsibility centers: Production and Selling and Distribution.

Production and administration are cost centers while Selling and Distribution is a profit center.

Presented below are the budgeted and actual contribution income statement for October along with applicable unit information.

Budgeted unit information:

Direct material per unit

$50

Direct labor per unit

$20

Variable manufacturing overhead per unit

$15

Variable selling and distribution per unit

Actual Units:

1,000

Craft Inc.

Budgeted Contribution Income Statement

Variable cost of goods sold:

Manufacturing overhead

13,500

$ 76,500

Selling and distribution

Manufacturing overhead

40,000

Selling and Distribution

Actual Contribution Income Statement

Variable cost of goods sold:

Manufacturing overhead

20,000

$ 95,000

Selling and distribution

Manufacturing overhead

38,000

Selling and Distribution

1. Prepare a flexible budget performance report for Production that compares actual and allowed costs.

2. Prepare a flexible budget performance report for selling and distribution that compares actual and allowed costs.

3. Determine the revenue variance.

4. Determine the sales price variance.

5. Determine the sales volume variance.

6. Explain to management the areas that should be investigated. You should also include why the actual income is less than budgeted Explain why you picked these areas to look at.

ochrelizard167

The Alpine House, Inc., is a large retailer of snow skis. The company assembled the information shown below for the quarter ended March 31:

		Amount
Total sales revenue	$	1,271,000
Selling price per pair of skis	$	410
Variable selling expense per pair of skis	$	50
Variable administrative expense per pair of skis	$	16
Total fixed selling expense	$	130,000
Total fixed administrative expense	$	130,000
Beginning merchandise inventory	$	75,000
Ending merchandise inventory	$	105,000
Merchandise purchases	$	290,000

Required:
1.	Prepare a traditional income statement for the quarter ended March 31.

The Alpine House, Inc.
Traditional Income Statement
Fixed manufacturing overhead		$(245,000)
Variable manufacturing overhead		(195,300)
Gross margin
Selling and administrative expenses:



		0

Prepare a contribution format income statement for the quarter ended March 31.

The Alpine House, Inc.
Contribution Format Income Statement

Variable expenses:




		0

Fixed expenses:



		0

3.	What was the contribution toward fixed expenses and profits for each pair of skis sold during the quarter? (Round your final answer to nearest whole dollar amount.)

beigeguinea-pig498

The information below representsthe beginning and ending inventory amounts along with theproduction and sales for the month in umbrella units

Beginning Inventory: 0 Umbrellas

Production: 80,000 Umbrellas

Sales: 60,000 Umbrellas

Ending Inventory: 20,000 Umbrellas

The Hampshire Company manufactures umbrellas that sell for$12.50 each. In 2014, the company made and sold 60,000 umbrellas.The company had fixed manufacturing costs of $216,000. It also hadfixed costs for administration of $79,525. The per-unit costs ofeach umbrella are as follows:

Using the information

Prepare a variable costing income statement.

Prepare an absorption costing income statement.

Direct Materials: $3.00

Direct Labor: $1.50

Variable Manufacturing Overhead:$0.40

Variable Selling Expenses: $1.10

Requirement 1
Hampshire Company
Variable Costing IncomeStatement

	Units	$

Sales	X	$		$
Variable Cost of Goods Sold:
Beginning Inventory			$
Direct Materials	X	$	$
Direct Labor	X	$	$
Manufacturing Overhead	X	$	$
Total Variable Costs			$

Cost of Good Available for Sale			$
Deduct Ending Inventory	X	$	$
Variable Costs of GoodsSold				$
Variable Selling Costs	X	$	$	$
Contribution Margin				$
Fixed Costs:
Fixed Manufacturing Costs				$
Fixed Administrative Costs				$
Operating Income				$


Requirement 2
Hampshire Company
Absorption Costing IncomeStatement

	Units	$
Sales	X	$		$
Variable Cost of Goods Sold:
Beginning Inventory			$
Direct Materials	X	$	$
Direct Labor	X	$	$
Manufacturing Overhead	X	$	$
Total Variable Costs			$
Allocated Fixed Manufacturing Costs	X	$	$
Cost of Good Available for Sale			$
Deduct Ending Inventory	X	$	$
Costs of GoodsSold				$

Gross Margin				$
Fixed Costs:
Variable Selling Costs	X	$		$
Fixed Administrative Costs				$
Operating Income				$

chocolatetiger709

ACC 406 : Study Guide

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