Combs, Inc. reports the following information for September sales:
Variable costs 3,000
Fixed costs 4,000
Operating income $ 8,000
If sales double in October, what is the projected operating income?
2. Chapter 4
The following information was gathered for Rogers Company for the year ended December 31, 20×4.
Direct labor-hours 75,000 dlh 77,500 dlh
Factory overhead $525,000 $558,000
Assume that direct labor-hours are the cost-allocation base.
a. Compute the budgeted factory overhead rate.
b. Compute the factory overhead applied.
c. Compute the amount of over/underapplied overhead.
3. Chapter 6
Spirit Company sells three products with the following seasonal sales pattern:
Quarter A B C
1 40% 30% 10%
2 30% 20% 40%
3 20% 20% 40%
4 10% 30% 10%
The annual sales budget shows forecasts for the different products and their expected selling price per unit as follows:
Product Units Selling Price
A 50,000 $ 4
B 125,000 10
C 62,500 6
Prepare a sales budget, in units and dollars, by quarters for the company for the coming year.
4. Chapter 8
Jael Equipment uses a flexible budget for its indirect manufacturing costs. For 20×4, the company anticipated that it would produce 18,000 units with 3,500 machine-hours and 7,200 employee days. The costs and cost drivers were to be as follows:
Fixed Variable Cost driver
Product handling $30,000 $0.40 per unit
Inspection 8,000 8.00 per 100 unit batch
Utilities 400 4.00 per 100 unit batch
Maintenance 1,000 0.20 per machine-hour
Supplies 5.00 per employee day
During the year, the company processed 20,000 units, worked 7,500 employee days, and had 4,000 machine-hours. The actual costs for 20×4 were:
Product handling $36,000
a. Prepare the static budget using the overhead items above and then compute the static-budget variances.
b. Prepare the flexible budget using the overhead items above and then compute the flexible-budget variances.
5. Chapter 14 Speedy Printing manufactures soft cover books. For January, the following information is available: Budgeted market size (units) 125,000 Budgeted market share 18% Budgeted average contribution margin per unit $1.20 Actual market size (units) 100,000 Actual market share 19% Actual average contribution margin per unit $1.22 Required: Compute the market-share variance, the market-size variance, and the sales-quantity variance in terms of the contribution margin.
6. Chapter 17 The Zygon Corporation was recently formed to produce a semiconductor chip that forms an essential part of the personal computer manufactured by a major corporation. The direct materials are added at the start of the production process while conversion costs are added uniformly throughout the production process. June is Zygon’s first month of operations, and therefore, there was no beginning inventory. Direct materials cost for the month totaled $895,000, while conversion costs equaled $4,225,000. Accounting records indicate that 475,000 chips were started in June, and that 425,000 chips were completed. Ending inventory was 50% complete as to conversion costs. Required: a. What is the total manufacturing cost per chip for June? b. Allocate the total costs between the completed chips and the chips in ending inventory.
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