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290) A number of costs and measures of activity are listed below.
Cost Description
Possible Measure of
Activity
1.
Salary of production manager at a surfboard manufacturer
Surfboards produced
2.
Cost of solder used in making computers
Computers produced
3.
Cost of dough used at a pizza shop
Pizzas cooked
4.
Janitorial wages at a surfboard manufacturer
Surfboards produced
5.
Salary of the controller at a hospital
Number of patients
6.
Cost of sales at an electronics store
Dollar sales
7.
Cost of testing materials used in a medical lab
Tests run
8.
Cost of heating an electronics store
Dollar sales
9.
Cost of electricity for production equipment at a surfboard
manufacturer
Surfboards produced
10.
Depreciation on shelving at a book store
Dollar sales
Required:
For each item above, indicate whether the cost is MAINLY fixed or variable with respect to the
possible measure of activity listed next to it.
291) At an activity level of 6,800 units, Henkes Corporation’s total variable cost is $125,188 and
its total fixed cost is $164,152.
Required:
For the activity level of 7,100 units, compute: (a) the total variable cost; (b) the total fixed cost; (c)
the total cost; (d) the average variable cost per unit; (e) the average fixed cost per unit; and (f) the
average total cost per unit. Assume that this activity level is within the relevant range.
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292) Hinrichs Corporation reports that at an activity level of 2,400 units, its total variable cost is
$174,504 and its total fixed cost is $55,080.
Required:
For the activity level of 2,700 units, compute: (a) the total variable cost; (b) the total fixed cost; (c)
the total cost; (d) the average variable cost per unit; (e) the average fixed cost per unit; and (f) the
average total cost per unit. Assume that this activity level is within the relevant range.
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293) A number of costs and measures of activity are listed below.
Cost Description
Possible Measure of
Activity
1.
Cost of vaccine used at a clinic
Vaccines administered
2.
Building rent at a taco shop
Dollar sales
3.
Salary of production manager at a snowboard
manufacturer
Snowboards produced
4.
Cost of electricity for production equipment at a
snowboard manufacturer
Snowboards produced
5.
Ferry captain’s salary on a regularly scheduled passenger
ferry
Number of passengers
6.
Cost of glue used in furniture production
Units produced
7.
Janitorial wages at a snowboard manufacturer
Snowboards produced
8.
Depreciation on factory building at a snowboard
manufacturer
Snowboards produced
9.
Cost of advertising at a snowboard company
Snowboards sold
10.
Cost of shipping bags of fertilizer to a customer at a
chemical plant
Bags shipped
Required:
For each item above, indicate whether the cost is MAINLY fixed or variable with respect to the
possible measure of activity listed next to it.
294) Morrisroe Corporation has provided the following information:
Cost per Unit
Cost per Period
Direct materials
$6.65
Direct labor
$3.30
Variable manufacturing overhead
$1.70
Fixed manufacturing overhead
$10,000
Sales commissions
$1.00
Variable administrative expense
$0.50
Fixed selling and administrative expense
$5,000
Required:
a. If the selling price is $25.90 per unit, what is the contribution margin per unit sold?
b. What incremental manufacturing cost will the company incur if it increases production from
5,000 to 5,001 units?
Selling price per unit
Direct materials
Direct labor
Variable manufacturing overhead
Sales commissions
Variable administrative expense
Variable cost per unit sold
Contribution margin per unit
Direct materials
Direct labor
Variable manufacturing overhead
Incremental manufacturing cost
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295) In April, Holderness Inc, a merchandising company, had sales of $221,000, selling expenses
of $14,000, and administrative expenses of $25,000. The cost of merchandise purchased during the
month was $155,000. The beginning balance in the merchandise inventory account was $34,000
and the ending balance was $48,000.
Required:
Prepare a traditional format income statement for April.
243
296) Fanelli Corporation, a merchandising company, reported the following results for July:
Number of units sold
5,300
Selling price per unit
$590
Unit cost of goods sold
$403
Variable selling expense per unit
$58
Total fixed selling expense
$124,400
Variable administrative expense per unit
$22
Total fixed administrative expense
$206,300
Cost of goods sold is a variable cost in this company.
Required:
a. Prepare a traditional format income statement for July.
b. Prepare a contribution format income statement for July.
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297) Weingartner Corporation, a merchandising company, reported sales of 4,800 units for July at
a selling price of $269 per unit. The cost of goods sold (all variable) was $114 per unit and the
variable selling expense was $6 per unit. The total fixed selling expense was $38,100. The variable
administrative expense was $14 per unit and the total fixed administrative expense was $59,900.
Required:
a. Prepare a contribution format income statement for July.
b. Prepare a traditional format income statement for July.
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298) Wippert Corporation, a merchandising company, reported the following results for
December:
Sales
$2,296,200
Cost of goods sold (all variable)
$997,600
Total variable selling expense
$86,000
Total fixed selling expense
$57,100
Total variable administrative expense
$43,000
Total fixed administrative expense
$148,100
Required:
a. Prepare a traditional format income statement for December.
b. Prepare a contribution format income statement for December.
Sales
Cost of goods sold
Gross margin
Selling and administrative expenses:
Selling expense
Administrative expense
Net operating income
Sales
Variable expenses:
Cost of goods sold
Variable selling expense
Variable administrative expense
Contribution margin
Fixed expenses:
Fixed selling expense
Fixed administrative expense
Net operating income
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299) Bauman Sales Corporation, a merchandising company, reported total sales of $4,069,800 for
November. The cost of goods sold (all variable) was $2,351,100, the total variable selling expense
was $204,000, the total fixed selling expense was $117,700, the total variable administrative
expense was $102,000, and the total fixed administrative expense was $267,000.
Required:
a. Prepare a contribution format income statement for November.
b. Prepare a traditional format income statement for November.