How Do You Find Unadjusted Cost Of Goods Sold

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Current cost and revenue data tort the spindles of yarn and for the afghans are as follows: Each month 4,000 spindles of yarn are produced that can either be sold outright or processed into afghans. If Austin chooses to produce 4,000 afghans each month, the change in the monthly net operating income as compared to selling 4,000 spindles of yarn is: A.

524,000 decrease B. $24,000 increase C. 516,000 decrease D. $16,000 increase 3. The actual manufacturing overhead incurred at Hogan’s Corporation during April was $59,000, While the manufacturing overhead applied to Work in Process was SIS,OHO.

The company’s Cost of Goods Sold was $289,000 prior to closing out its Manufacturing Overhead account. The company closes out its Manufacturing Overhead account to Cost of Goods Sold. Which of the following statements is true? A.

Manufacturing overhead was oversupplied by $15,000: Cost of Goods Sold after closing out the Manufacturing Overhead account is SASS,OHO 8. Manufacturing overhead was underplayed by $15,000; Cost of Goods Sold C. Manufacturing overhead was oversupplied by $15,000: Cost of Goods Sold after closing out the Manufacturing Overhead account is $304,000 D.

Maturating overhead was underplayed by $15,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is $304,000 Adjusted cost of goods sold Unadjusted cost of goods sold Underplayed manufacturing overhead Oversupplied manufacturing overhead = $283,000 + $0 – 515,000 = 5274. 000 4. (Ignore income taxes in this problem.

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) Ridden Company has just purchased a new piece of equipment with the following characteristics: The simple rate of return would be approximately: A. 22. 2% B. 12. 2% c. 11. 1% Simple rate of return = Annual incremental net operating income D Initial investment – $3,300 $27,000 12. % 5. Weston Hotel bases its budgets on guest-days. The hotel’s static budget tort April appears below: The total variable cost at the activity level of 3,200 guest-days per month should be: A. $40,960 B. $49,280 c. $29,440 D. 535,420 6. Fillip Corporation makes 4,000 units Of part 013 each year. This part is used in one of the company’s products. The company’s Accounting Department reports the following costs Of producing the part at this level Of activity: An outside supplier has Offered to make and sell the part to the company for $21. 60 each.

Unadjusted Cost Of Goods Sold

If this offer is accepted, the supervisor’s salary and all of the variable costs, including direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company. If the outside supplier’s offer were accepted, only $3,000 of these allocated general overhead costs would be avoided. In addition, the space used to produce part 013 would be used to make more of one of the company’s other products, generating an additional segment margin to $13,000 per year tort that product.

What would be the impact on the company’s overall net operating income of buying part U 13 from the outside supplier? A. Net operating income would increase by $13,000 per year. B. Net operating income would decline by $42,600 per year, C. Net operating income would decline by $68,600 per year. D. Net operating income would increase by $9,200 per year. Net operating income would increase by $9,200 per year if the part were bought from the outside supplier. 7. The management of Freshwater Corporation is considering dropping product CHI B.

Data from the company’s accounting system appear below: All fixed expenses Of the company are fully allocated to products in the company’s accounting system. Further investigation has revealed that SIS 1 ,OHO Of the fixed manufacturing expenses and $122,000 Of the fixed selling and administrative expenses are avoidable if product CLC 18 is discontinued. According to the company’s accounting system, what is the net operating income earned by product Club? A. $74,000 8. 5(521 ,000) D. $521 8. Madman Corporation manufactures and sells a single product.

The company uses units as the measure of activity in its flexible budgets. During July, the company budgeted tort 7,900 units, but its actual level to activity was 7,920 units. The company has provided the following data concerning the formulas to be seed in its budgeting: The direct labor in the planning budget for July would be closest to: A. $41 ,868 B. 541 ,080 C. $41,184 D. $41,974 Cost = Fixed cost per unit -e Variable cost per unit q = so * 55. 20 7,900 = g. (Ignore income taxes in this problem. The Crawford Company is pondering an investment in a machine that costs $350,000, that will have a useful life of eight years, and that will have a salvage value of $25,000. If this machine is purchased, a similar. Old machine will be sold at a salvage value of $40,000. The anticipated yearly revenues and expenses associated with the new machine are: All of the revenues and expenses except depreciation are for cash. The company’s required rate of return is 12%. The annual cash flows occur uniformly throughout the year. The payback period, to the nearest tenth of a year, of this investment is: A, 6. Years B. 3. 2 years C. 3. 6 years D. 41) years Payback period = Investment required II Annual net cash inflow – – ($350,000 $40,000) $97,000 per year = 3. 2 years ICC Damsel Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 600 units. The costs and percentage completion of Hess units in beginning inventory were: A total of 7,800 units were started and 7,000 units were transferred to the second processing department during the month.

The following costs were incurred in the first processing department during the month: The ending inventory was 55% complete with respect to materials and 50% complete with respect to conversion costs. Note: Your answers may differ from those offered below due to rounding error. In all cases, select the answer that is the closest to the answer you computed. To reduce rounding error, carry out all computations to at least three decimal places. How many units are in ending work in process inventory in the first processing department at the end of the month? A. 1,400 B. 7,200 C. 900 D. 00 Units in ending work in process units in beginning work in process units started into production – Units transferred to the next department = 600 + 7,800 – 7,000 1,400 II. (Ignore income taxes in this problem. ) Kibble Corporation is considering the purchase of a machine that would cost $330,000 and would last for 5 years. At the end Of 5 years, the machine would have a salvage value Of 550,000. By reducing labor and other operating costs, the machine would provide annual cost savings Of $76,000. The company requires a minimum pretax return Of 12% on all investment projects.

The net present value of the proposed project is closest to: A. -56,020 B. $6,020 c. $48,764 D. -$27,670 12. Mock Clinic uses client-visits as its measure of activity. During August, the clinic budgeted for 3, I CO collectivists, but its actual level of activity 3,150 client-visits. The clinic has provided the tolling data concerning the formulas used in its budgeting and its actual results for August: Data used in budgeting: Actual results for August: The administrative expenses in the planning budget for August ovule be closest o:A $5,740 B. $5,934 c 56,030 D. 5, 760 Cost = Fixed cost per unit * Variable cost per unit C] q = $4,500 + $0. 40 D 3,100 = $5,740 13. Skiers Company, which has only one product, has provided the following data concerning its most recent month Of operations: The company produces the same number of units every month, although the sales in units vary from month to month. The company’s variable costs per unit and total fixed costs have been constant from month to month. What is the net operating income for the month under variable costing? A. $10,600 8. $16,200 c. SO,200 D. $7,500 unit product cost under variable costing: 4.

Sampler Corporation processes sugar cane in batches. The company purchases a batch of sugar cane for 534 from farmers and then crushes the cane in the company’s plant at the cost of $15. Two intermediate products, cane fiber and cane juice, emerge from the crushing process. The cane fiber can be sold as is for $26 or processed further for $1 7 to make the end product industrial fiber that is sold for $41. The cane juice can be sold as is for $32 or processed further for $22 to make the end product molasses that is sold for $51. Which of the intermediate products should be processed further?